GST/HST Registration for Toronto Freelancers: The $30,000 Threshold Explained

Short answer

Most Toronto freelancers must register for GST/HST once their revenue from taxable sales passes $30,000 in a single calendar quarter or over four consecutive calendar quarters. You then have 29 days from your effective registration date to register. (Source: CRA – When to register for and start charging the GST/HST) Below that amount you are a small supplier: you may register voluntarily, but you do not have to. (Source: CRA – Register voluntarily for a GST/HST account)

What a small supplier is

The Canada Revenue Agency (CRA) uses the term “small supplier” for a business whose taxable revenue stays at or below $30,000. For most businesses, the CRA measures this over four consecutive calendar quarters, and a small supplier does not have to register for GST/HST. (Source: CRA – When to register for and start charging the GST/HST)

A calendar quarter is a fixed three-month block: January to March, April to June, July to September and October to December. The test does not follow your personal tax year or the date you started freelancing. It looks back over the most recent four calendar quarters, and checks each quarter on its own as well.

The test applies to sole proprietors and corporations alike, so it matters from your first invoice, whether you freelance under your own name or through a company.

What counts toward the $30,000

The threshold is based on the amounts you charge for taxable supplies. It is not based on profit, so business expenses do not reduce it. CRA’s small supplier memorandum describes the calculation this way. (Source: CRA – GST/HST Memorandum 2-2, Small Suppliers)

Included

• Worldwide taxable supplies. CRA counts taxable supplies made anywhere, not only sales to Ontario clients. (Source: CRA – GST/HST Memorandum 2-2, Small Suppliers)
• Associates’ taxable supplies. If you are associated with other persons or businesses, their revenue may also count. CRA’s memorandum explains when persons are associated. (Source: CRA – GST/HST Memorandum 2-2, Small Suppliers)

Excluded

• Exempt supplies
• Supplies of financial services
• Sales of capital property
• Goodwill from the sale of a business
• The GST/HST itself

These exclusions are listed in CRA’s small supplier memorandum. (Source: CRA – GST/HST Memorandum 2-2, Small Suppliers)

If you are unsure whether a particular income stream is a taxable, zero-rated or exempt supply, check it before relying on your total. That classification decides whether it counts.

Two ways to cross the threshold

CRA sets different timing rules depending on how you pass $30,000.

Why the single-quarter rule matters for freelancers

A freelancer who lands one large contract can pass $30,000 inside a single quarter. In that case, the sale that takes you over the limit is itself taxable. (Source: CRA – When to register for and start charging the GST/HST) Before you invoice a large project, check your running total for the quarter.

Why the four-quarter rule is easy to miss

Steady monthly income can pass $30,000 across four quarters without any single quarter reaching it. Because the window rolls forward every quarter, keep a running quarterly total rather than waiting until tax season.

Registering voluntarily before you reach $30,000

A small supplier that makes taxable supplies in Canada may choose to register. CRA describes these points to weigh:

• Potential benefit: once registered, you may be eligible to claim input tax credits to recover GST/HST paid on business purchases and expenses. (Source: CRA – Register voluntarily for a GST/HST account)
• Obligations: you must charge, collect and remit GST/HST on taxable supplies and file GST/HST returns regularly. (Source: CRA – Register voluntarily for a GST/HST account) CRA says a voluntary registrant takes on all the obligations of a registrant. (Source: CRA – GST/HST Memorandum 2-2, Small Suppliers)
• Minimum period: you must stay registered for at least one year before you can cancel, unless you stop your commercial activities. (Source: CRA – Register voluntarily for a GST/HST account)
• Effective date: generally the date you ask to register. CRA may accept a date up to 30 days earlier. (Source: CRA – Register voluntarily for a GST/HST account)

Whether voluntary registration suits you depends on who your clients are and what you buy for the business. That decision is worth discussing with a tax professional who knows your situation.

An exception: taxi and ride-sharing drivers

The small supplier rule does not help self-employed taxi and ride-sharing drivers. CRA says they must register for GST/HST even if they are small suppliers, effective from the day they begin providing passenger transportation services. (Source: CRA – When to register for and start charging the GST/HST) Delivery-only drivers, for example for food or parcel delivery, are not covered by this exception. The ordinary small-supplier rules described above apply to them. (Source: CRA – Tax obligations for commercial ridesharing and delivery services) If you freelance and also drive for a ride-sharing platform, check this rule separately, and if you do both passenger ride-sharing and delivery, confirm your position with the CRA or with us. Our Uber and DoorDash deductions guide covers how ride-sharing differs from delivery.

How to register

CRA describes Business Registration Online as the fastest way to get a business number (BN) and a GST/HST account. If you do not have a BN yet, you receive one when you register. (Source: CRA – Register for a GST/HST account) CRA asks for:

• the effective date of registration
• your fiscal year information
• an estimate of annual revenue, including associates’ revenue
• personal details, such as your name, social insurance number, date of birth and home postal code
• business details, such as name, type, addresses and main activity

CRA notes that when you register online, you should save or print your BN, because it will not be mailed to you. (Source: CRA – Register for a GST/HST account)

After you register

Charge GST/HST at the rate that applies to each supply. CRA lists Ontario’s HST rate as 13% (Source: CRA – GST/HST rates), but the rate for a given sale depends on CRA’s place-of-supply rules, so sales to clients in other provinces may use a different rate. (Source: CRA – GST/HST and place-of-supply rules) For reporting periods, return preparation and payments, see our GST/HST filing guide and our guide to paying GST/HST to the CRA.

If you would like help registering: Do not email banking credentials or passwords. For SINs, employee tax information, and full tax slips, contact us first for instructions on the safest way to send documents.

Freelancer threshold checklist

• List every income stream and note whether each is a taxable, zero-rated or exempt supply.
• Record each invoice by the calendar quarter in which it was paid or became due.
• Keep a running total for the current quarter and for the last four quarters.
• Check whether any associated person or business has revenue that may count.
• Before you invoice a large project, check whether it would take the quarter over $30,000.
• If you pass $30,000, work out your effective registration date and register within 29 days of it.
• If you drive passengers for a taxi or ride-sharing service, confirm your registration date separately. Delivery-only driving follows the small-supplier test.
• If you are considering voluntary registration, review the one-year minimum and the filing obligations first.
• Save or print your business number when you register online.

Free downloadable template

The GST/HST Records and Input Tax Credit Tracker is an Excel worksheet for one reporting period. It has space to record each sale before tax, the GST/HST collected, each business purchase, GST/HST paid, and the receipt or invoice reference. Before registration, you can use the sales columns to keep a running total by quarter. After registration, the purchase columns help you organize possible input tax credits to review with your tax preparer.

Download the GST/HST Records and Input Tax Credit Tracker (XLSX). No email address required.

This template helps organize records. It does not determine eligibility, deductions, tax owing, or filing requirements.

Frequently asked questions

Is the $30,000 threshold based on profit or on revenue?

Revenue. CRA’s test uses the amounts charged for taxable supplies, so business expenses do not reduce it. (Source: CRA – GST/HST Memorandum 2-2, Small Suppliers)

Does income from clients outside Canada count?

CRA counts worldwide taxable supplies. (Source: CRA – GST/HST Memorandum 2-2, Small Suppliers) Revenue from foreign clients can count toward the threshold even when it is not taxed at 13%.

Do I include the HST I would have charged in my total?

No. CRA excludes the GST/HST itself from the calculation. (Source: CRA – GST/HST Memorandum 2-2, Small Suppliers)

What if I passed $30,000 in one quarter and did not notice?

When you pass $30,000 in one quarter, CRA sets your registration effective date no later than the day of the sale that took you over. (Source: CRA – When to register for and start charging the GST/HST) Talk to a tax professional promptly about registering and about GST/HST on sales made since that date.

Can I register before I earn $30,000?

Yes, if you make taxable supplies in Canada. You then have to charge GST/HST and file returns, and you generally must stay registered for at least one year. (Source: CRA – Register voluntarily for a GST/HST account)

I drive passengers for a ride-sharing app part-time. Does the $30,000 threshold apply?

No. For commercial passenger ride-sharing, CRA requires registration even if you are a small supplier. (Source: CRA – When to register for and start charging the GST/HST) Delivery-only drivers are different: the ordinary small-supplier rules apply to them. (Source: CRA – Tax obligations for commercial ridesharing and delivery services)

Official sources

• CRA: When to register for and start charging the GST/HST
• CRA: GST/HST Memorandum 2-2, Small suppliers
• CRA: RC4022, General Information for GST/HST Registrants
• CRA: Register voluntarily for a GST/HST account
• CRA: Register for a GST/HST account
• CRA: GST/HST calculator (and rates)
• CRA: GST/HST and place-of-supply rules
• CRA: Tax obligations for commercial ridesharing and delivery services (page modified 11 June 2024)