Overview
Most Canadian small businesses registered for GST/HST use the regular method: collect GST/HST from customers, track all GST/HST paid on business purchases (input tax credits / ITCs), and remit the difference to the CRA. This works well when you have significant taxable purchases.
The Quick Method is an alternative accounting approach where instead of tracking every ITC, you simply remit a flat percentage of your gross revenues (including the GST/HST you collected) directly to the CRA. The flat rates are set below the actual GST/HST rates — meaning for many service businesses with few taxable expenses, the amount remitted is less than what you collected from customers. You keep the difference.
The Quick Method Rates (2024)
The remittance rate depends on your province and business type:
For service businesses:
| Province | Rate on sales + HST/GST |
|---|---|
| Ontario (13% HST) | 8.8% |
| BC (5% GST) | 3.6% |
| Alberta (5% GST) | 3.6% |
| Nova Scotia (15% HST) | 10.0% |
| Quebec (5% GST + 9.975% QST — GST portion) | 3.6% |
For goods/product businesses: Slightly higher rates (approximately 1–1.5% higher than service rates).
1% credit: You get an additional 1% credit on the first $30,000 of your eligible revenues — reducing your first $30,000 of remittances by 1%.
The Savings Calculation
Example — Ontario service business:
- Annual revenue: $100,000 + 13% HST = $113,000 collected
- HST collected from clients: $13,000
- Under regular method: You remit $13,000 minus your ITCs (say $2,000 in business expenses with HST) = $11,000 remitted
- Under Quick Method: 8.8% × $113,000 = $9,944 remitted
If your ITCs are below $3,056 in this example, the Quick Method saves you money. Service businesses with minimal taxable purchases (consultants, coaches, freelancers, professional services) almost always benefit.
1% credit on first $30,000: 8.8% × $100,000 = $8,800, minus 1% × $30,000 = $300 credit = $8,500 net (roughly $1,500 saved versus the regular method in this simplified example).
Who Can Use the Quick Method
Eligible: Most small businesses with annual taxable revenues under $400,000 (excluding GST/HST)
Not eligible:
- Accountants, bookkeepers, financial consultants, and tax preparers (ironically)
- Lawyers and notaries
- Businesses that sell new residential housing or land
- Municipalities, charities, public institutions
- Non-residents of Canada
Best candidates: Consultants, coaches, marketing professionals, IT contractors, designers, copywriters, tradespeople — anyone whose primary “inventory” is their time and expertise and who has minimal taxable business purchases.
How to Elect the Quick Method
- File Form GST74 (“Election and Revocation of an Election to Use the Quick Method of Accounting”) with the CRA — this can be done online through My Business Account
- The election takes effect at the beginning of a GST/HST reporting period — not mid-period
- Once elected, you must use it for at least one full fiscal year before you can revoke it
- You can revoke by filing the same Form GST74
Timing tip: Elect at the beginning of your fiscal year to get the maximum benefit immediately.
What Happens to Major Purchase ITCs
Under the Quick Method, you cannot claim ITCs for regular business purchases (software, office supplies, professional services you buy). However, you can still claim ITCs for:
- Capital assets over $10,000 (equipment, machinery, computers, vehicles)
- Real property purchases
This means if you’re buying significant equipment, factor the ITC you’d lose under Quick Method against the remittance savings.
What Most People Don’t Know
- The difference is taxable income. The GST/HST you collect from clients but don’t remit under Quick Method is business income — you’ll pay corporate or personal income tax on it. Still, a dollar kept is better than a dollar sent to the CRA.
- Revocation is time-limited. Once you revoke the Quick Method, you cannot re-elect it for one year.
- Quebec has a separate Quick Method for QST. If you’re in Quebec and registered for both GST and QST, you can elect the Quick Method for each separately.
- The $400,000 threshold is based on all associated companies. If you have related corporations, their revenues are combined to test the threshold.
- Your accountant may not automatically suggest this. Some bookkeepers and accountants don’t recommend Quick Method proactively — ask specifically whether it would benefit you.
Frequently Asked Questions
If I use the Quick Method, do I still charge my clients the full GST/HST rate?
Yes. You continue to charge your clients the full 5% GST or applicable HST rate on all taxable supplies, exactly as before. The Quick Method only changes how much of what you collect you remit to the CRA — you keep the difference between what you collected and the lower Quick Method remittance rate as additional business income (which is taxable).
When I switch to the Quick Method, can I still claim ITCs for equipment purchases over $10,000?
Yes. Capital asset purchases over $10,000 (such as computers, vehicles, and equipment) retain their ITC eligibility even under the Quick Method. You lose ITCs for day-to-day business expenses (software, supplies, professional services you buy), but major capital acquisitions are exempt from this restriction.
Can accountants and bookkeepers use the GST/HST Quick Method?
No. The Quick Method explicitly excludes businesses that provide accounting, bookkeeping, financial consulting, tax consulting, or tax return preparation services, as well as lawyers and notaries. This is one of the more counterintuitive rules — the tax professionals most likely to know about the Quick Method are also ineligible to use it for their own practices.
How do I elect into the Quick Method, and when does it take effect?
File Form GST74 (Election and Revocation of an Election to Use the Quick Method of Accounting) with CRA — this can be done online through My Business Account. The election takes effect at the start of a GST/HST reporting period, not mid-period. Once elected, you must use it for at least one full fiscal year before you can revoke it.
Does the $400,000 revenue threshold apply to my business alone or to all related businesses?
The threshold is assessed on a combined basis for all “associated” businesses — related corporations under common control are aggregated. If you own two companies with combined revenues over $400,000, neither can use the Quick Method even if each is individually under the threshold.