As a small business owner, navigating the maze of GST/HST payments can be overwhelming. With constantly changing regulations and tight deadlines, it’s easy to feel like you’re always playing catch-up. But don’t worry—this guide will help you understand everything you need to know about GST/HST payments, ensuring you stay compliant and avoid costly penalties.
Understanding GST/HST Registration
When your business earns more than $30,000 in four consecutive quarters in Canada, it’s time to register for a GST/HST number with the Canada Revenue Agency (CRA). Once registered, you’ll need to start collecting GST/HST from your customers and remitting it to the CRA on a specified schedule.
Filing Periods and Payment Deadlines
The CRA offers four different filing periods, each with its own payment deadlines:
- Monthly: Payment due one month after the end of the reporting period.
- Quarterly: Payment due one month after the end of the reporting period.
- Annually (December 31st year-end): Filing deadline of June 15th and payment deadline of June 30th.
- Annually (Custom year-end): Payment due three months after your fiscal year-end.
It’s crucial to choose the right filing period that aligns with your business operations to avoid penalties.
Offsetting GST/HST Payments with Input Tax Credits
To lighten your tax burden, you can claim Input Tax Credits (ITCs) for the GST/HST you’ve paid on business purchases. When filing your GST/HST return, the amount payable is the difference between the GST/HST you’ve collected and the ITCs you can claim.
Methods to Pay GST/HST
Paying your GST/HST on time is essential to avoid penalties. Fortunately, there are several methods available:
1. Online Payment
The CRA’s My Payment service allows you to pay directly from your bank account via Interac Online. It’s a quick and secure way to ensure your payment is received on time.
2. Telephone Banking
You can also pay via your bank’s telephone banking service. You’ll need your remittance voucher handy for this.
3. Pre-Authorized Debit
Set up a pre-authorized debit through your CRA My Business Account to have the payment automatically deducted from your bank on the due date.
4. In-Person Payment
You can pay at your financial institution using the HST payment form RC158.
5. By Mail
Mail your payment with a cheque or money order, including the remittance voucher, to the CRA.
Paying GST/HST Online: The Simplest Option
We recommend paying GST/HST online for its convenience and immediate confirmation. After logging into your CRA My Payment account, you can quickly complete the transaction and receive a receipt for your records. Alternatively, you can pay through your online banking by selecting “Federal – GST/HST Payment – GST-P” as the payee.
What is GST/HST Netfile?
GST/HST Netfile is a user-friendly web service that allows businesses to file their GST/HST returns online. With your Netfile access code provided by the CRA, you can easily submit your return and arrange for payment through any of the methods mentioned above.
Stay on Top of GST/HST Payments with Professional Help
Navigating GST/HST payments can be challenging, but you don’t have to do it alone. At Ghumans, we specialize in helping small businesses and corporations manage their GST/HST obligations. Our experts ensure your payments are made accurately and on time, so you can focus on growing your business.
FAQs
What date is the extra GST payment coming?
The quarterly, non-taxable payment on July 5 is meant to offset GST or HST costs for people with low and modest incomes and most Canadians are assessed for the credit when they file their taxes. The Canada Revenue Agency (CRA) typically sends out the payments on the fifth day of October, January, April and July.
Are we getting extra money for GST 2024 Canada?
You will get your annual GST/HST credit, which was calculated using information from your 2023 tax return, in four payments. The CRA will make these payments on July 5 and October 4, 2024, and on January 3 and April 4, 2025.
How much is GST and HST in Canada?
The standard rate of GST is 5%.
Certain provinces levy an additional Provincial Sales Tax, which is combined with the GST rate and is referred to as HST. There are two HST rates, in general, 15%, except for Ontario, where it is 13%. HST applies to the same base of goods and services as GST.
Is GST HST paid monthly?
Most businesses choose to file and make HST payments on an annual or quarterly basis. If your corporation has a significant monthly revenue, it is often easier to pay monthly. If you are a sole proprietor, your GST / HST payment deadline will be in line with your personal income tax.
What happens if I don’t remit GST/HST on time?
Failing to remit GST/HST can result in significant penalties and interest on the amount owed.