How Do Canadian Small Businesses Pay GST/HST?

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Canada Revenue Agency (CRA) Tax Audit
Canada Revenue Agency (CRA) Tax Audit
June 12, 2021

If your small business is collecting  Goods and Services Tax (GST)/ Harmonized Sales Tax (HST) from its customers for the goods and services you have provided them as a business, it is important to understand how to remit those taxes back to the government.

Filing GST/HST return also refers to claiming the Input Tax Credits (ITCs). It is the GST/HST you pay on services or supplies that you acquired to run your business. Check the CRA website to see if you qualify for an ITC deduction. 

Filing a GST/HST return may seem more complicated than filing your personal income tax return. The information required, and the process of filing the return are both quite different. This article will guide you about ways to pay GST/HST if you have a balance owing.

Different Methods of paying GST/HST  

Businesses must choose a method of paying GST/HST. The selection depends upon various factors such as availability of time to file GST/HST returns before the due date, convenience, etc.

  • Remit Electronically

Electronic payment mode of GST/HST further leads to three different channels you can choose from for your payment.  

  1. My Payment: You can remit electronically using the CRA’s My Payment option. This service uses Interac Online to allow taxpayers (individuals or businesses) to make direct online payments to the CRA from an account at a participating financial institution, using the CRA website. For more information, read My Payment.
  2. My Business Account: Another online option is to authorize the Canada Revenue Agency (CRA) to debit a GST/HST payment amount from your bank account on a specified date. Pre-authorized debit payments can be set up using the CRA My Business Account
  3. Regular Banking Service: You can remit electronically using your financial institution’s online or telephone banking services. You do not need a remittance voucher to pay online.
  • Cash Payments

Pay in person at a financial institute which is a registrant at CRA using Form RC158, GST/HST Netfile/ Telefile Remittance Voucher.

  • Snail Mail

Fill the personalized GST return the CRA has mailed to you. Then mail this GST return remittance voucher with a cheque or money order made payable to the Receivers General at the address on the back of the voucher. Ensure to write your business number on the back of the cheque or money order.

In case you don’t receive your personalized GST return, you can request form GST62 by calling the CRA’s Forms and Publications call center.

 NOTE: GST/HST payments of $50,000 or more must be made electronically at a financial institution, credit union, or corporation authorized under the federal or provincial laws of Canada.

CRA Ruling: When it is Mandatory to File GST/HST Electronically?

You can file a GST/HST return electronically, by TELEFILE, or on paper. Before you choose a method, you must determine if you are required to file online and which online method you can choose.

As of July 1, 2010, CRA ensures certain businesses must file their GST/HST returns electronically. For instance, GST/HST registrants with greater than $1.5 million in annual taxable supplies (except for charities); all registrants that are required to report recapture input tax credits (RITCs) for certain inputs in their province; or builders claiming provincial transitional new housing rebates. For more details refer CRA website.

Electronic GST/HST Filing Is Encouraged

The CRA offers a variety of mediums to eligible GST/HST registrants (except for registrants in Quebec), that can be availed to make electronic GST/HST payment. This range of different mediums is permitted to encourage electronic filing.

  • GST Netfile: GST Netfile allows you to complete your GST/HST return online and send it to CRA directly via the internet. It requires an access code received in the mail from CRA. To pay any GST/HST owing when you use Netfile, you will need to pay using one of the four methods outlined above.
  • GST/HST Telefile: You may use touch-tone, call 1-800-959-2038 and proceed as instructed to file GST/HST return. If you opt for this method you will need to pay the GST/HST owing (if there is any) by mail, through your financial institution, or electronically using the CRA’s My Payment electronic payment service.
  • Electronic Data Exchange(EDI): After registering with a provider (such as a financial institute), you are required to supply GST/HST return and payment information via computer or phone which is then converted to an appropriate GST/HST return format and transmitted to the CRA.
  • GST/HST File Transfer: This service allows eligible registrants to file their GST/HST returns directly to the CRA using third-party accounting software. You will be required to pay GST/HST owing by mail, through your financial institution, or electronically using the CRA’s My Payment electronic payment service
  • My Business Account: My Business Account is an online CRA service that allows businesses to manage a variety of tax-related business activities.

Are you encountering any challenges in filing your GST/HST Return, feel free to reach out to Filing Taxes at 416-479-8532? Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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