The $30,000 GST/HST threshold, and what happens when you cross it

The two routes past the line

In one quarter. A single large contract can do it. The moment that sale takes your running total past $30,000, you are no longer a small supplier, and your effective registration date is no later than that day. You must register within 29 days of it — and you were required to charge GST/HST on the supply that took you over.

Over four consecutive quarters. Here the rule is gentler. You stop being a small supplier at the end of the month following the quarter in which the running total passed $30,000, and your effective date is no later than the day of your first sale after that.

Why the difference matters in cash terms

Under the first route, the HST on the sale that took you over was payable whether or not you invoiced for it. If you did not, you either go back to the client for it or pay it out of the invoice you already issued — on a large contract that is a meaningful sum.

The threshold is measured on worldwide taxable revenue over the four most recent consecutive calendar quarters, not on a fiscal year and not on profit. It is $50,000 for charities and public service bodies.

Registering before you have to

Voluntary registration is allowed, and it is sometimes the better call. A registrant claims input tax credits — the HST paid on business purchases — against the HST collected. A business with heavy start-up costs and few sales can be net-positive from day one.

The trade-off is filing obligations that do not go away, and prices that rise 13% for any customer who cannot claim the credit back. Which way it falls depends on who your customers are.