The Quick Method for GST/HST: who qualifies and when it pays off
The Quick Method is an optional way for small businesses to work out how much GST/HST to send to the Canada Revenue Agency (CRA). You still charge your customers the full GST or HST. But instead of adding up the tax you paid on each purchase, you multiply your tax-included sales by a lower “remittance rate” and send that amount. The CRA’s Guide RC4058, Quick Method of Accounting for GST/HST (Rev. 25, updated July 2025) says the method “reduces paperwork” because you do not report the actual GST/HST paid on most purchases.
Whether it saves you money depends on your sales, your expenses and your province. This guide explains who can use it, how the rates work, and how to elect. It covers returns filed with the CRA. RC4058 notes that if your business is physically located in Québec, you generally file your returns with Revenu Québec using its forms.
Who can use the Quick Method?
Guide RC4058 says you can use it if you meet all of these conditions:
- You have been in business continuously for the 365 days before your current reporting period (new registrants have their own rule, below).
- You did not revoke a Quick Method election, or an election for the simplified method for claiming input tax credits (ITCs), during that 365-day period.
- Your business is not one of the excluded types.
- Your annual worldwide taxable sales, including zero-rated sales, GST/HST and your associates’ sales, are not more than $400,000. This is tested on either the first four or the last four of your last five fiscal quarters.
- You have a permanent establishment in Canada.
When you add up sales for the $400,000 test, leave out financial services and sales of real property, capital assets and goodwill.
New registrants can elect if they reasonably expect sales of $400,000 or less in their first full year of business, according to RC4058.
Excluded businesses include anyone who provides bookkeeping, financial consulting, tax consulting or tax return preparation services, and anyone who provides legal, accounting or actuarial services in a professional practice. Listed financial institutions, charities, public institutions and some other public bodies are also excluded. Some of them can use a separate “special quick method” instead.
How do the remittance rates work?
You charge GST at 5% or HST at your province’s rate as usual. To find what you owe, you multiply your sales for the period, including the GST/HST, by the remittance rate that applies to you. RC4058 says the rate depends on:
- whether you mostly buy goods for resale, or mostly provide services
- the province where your permanent establishment is
- the province where you make your sales
The guide explains that the tax you keep “accounts for the approximate value of the ITCs you would otherwise have claimed.” Guide RC4022 adds that the part you do not remit is reported as income on your income tax return.
Here are a few rates from the charts in Guide RC4058, for a business whose sales are all made in its own province:
| Permanent establishment and sales | Services rate | Goods for resale rate |
|---|---|---|
| A GST-only province (for example Alberta), sales at 5% GST | 3.6% | 1.8% |
| Ontario, sales at 13% HST | 8.8% | 4.4% |
| Nova Scotia (since April 1, 2025), sales at 14% HST | 9.4% | 4.7% |
| New Brunswick, Newfoundland and Labrador or PEI, sales at 15% HST | 10.0% | 5.0% |
The goods-for-resale rates are only for businesses whose cost of goods bought for resale, or for use in goods they make for sale (including GST/HST), in the previous fiscal year was at least 40% of their taxable sales (including GST/HST). RC4058 gives grocery and convenience stores, gas stations and boutiques as examples. The services rates are for other small businesses, such as auto repair shops, caterers, house-cleaning services, painting contractors and photographers. If you sell in several provinces, you may need more than one rate, so check the full charts.
What is the 1% credit on the first $30,000?
On top of the lower rate, RC4058 gives a 1% credit on the first $30,000 of eligible tax-included sales in each fiscal year. That is worth up to $300 a year. You enter it on line 107 of the return.
Two rules matter:
- Your Quick Method election must be in effect at the start of the fiscal year (or, for a new registrant, on the day you registered). If you start mid-year, you do not get the credit that year.
- Any unused part does not carry forward to the next year.
Monthly and quarterly filers apply the credit period by period until they reach $30,000 or the year ends.
When can the Quick Method help, and when can it hurt?
RC4058 says plainly that whether it is better “depends on your specific situation.” The trade-off is simple to state: under the Quick Method you give up ITCs on operating expenses and inventory. So the question is whether the tax you keep is more or less than the ITCs you would have claimed.
Illustrative example, not a real business and not advice: an Ontario service business has $113,000 of HST-included sales in a year ($100,000 plus $13,000 HST). It elected before the year began.
- Quick Method: $113,000 × 8.8% = $9,944, minus the $300 credit = $9,644 to remit.
- Regular method: $13,000 collected, minus its ITCs.
In this example, the Quick Method sends less tax only if the business would have claimed less than $3,356 in ITCs on its operating costs. If it had more taxable expenses than that, the regular method would send less.
Following that logic, the Quick Method can help when your real ITCs on operating costs would be smaller than the tax the remittance rate lets you keep. It may suit you less if:
- you pay a lot of GST/HST on supplies, rent or other operating costs
- you have bad debts. RC4058 says you cannot adjust for bad debts under the Quick Method, except on supplies not eligible for it
- you want flexibility. You must stay in it for at least one year
Some ITCs are still allowed. RC4058 says you can still claim ITCs on real property and on capital assets such as computers and vehicles. You also still have to keep all your purchase and sales records for six years.
How and when do you elect?
You elect online through My Business Account, or through Represent a Client if you are an authorized representative or employee. You can also file Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting. RC4058 sets these deadlines:
- Annual filers: elect by the first day of your second fiscal quarter. A new registrant filing a first return for a period shorter than a full fiscal year elects by the due date of that return.
- Monthly or quarterly filers: elect by the due date of the return for the period in which you start using the Quick Method.
Your start date must be the first day of a reporting period. The election stays in effect while you stay eligible and under $400,000. You can revoke it only after it has been in effect for at least one year. After revoking, you must wait at least a year before electing again.
Check each year-end that you still qualify. RC4058 explains when you must switch back to the regular method if you go over $400,000.
Where Vigitaxe fits
Vigitaxe is being built to compare the Quick Method with the regular method using your own numbers, so you and your tax professional can decide with real figures before the election deadline. Join the waitlist.
This article is general information about Canadian sales tax, not tax, legal or accounting advice. Rates and rules change, so confirm the details in Guide RC4058 on canada.ca and check your situation with a qualified tax professional before electing.