The $30,000 small-supplier threshold for GST/HST is calculated on worldwide taxable revenues, not just Canadian sales, and it includes the revenues of any associated persons. Freelancers cross the threshold either by exceeding $30,000 in a single calendar quarter or by exceeding $30,000 cumulatively over four consecutive calendar quarters. Once you cross, you must register and start charging GST/HST. Below the threshold, registration is voluntary; many freelancers choose to register voluntarily to claim input tax credits on business expenses.
The $30,000 number in plain terms
| Question | Answer |
|---|---|
| Is the $30,000 gross or net? | Gross. Calculate based on revenues, not profit. |
| Does it include GST/HST collected? | No. GST/HST collected does not count toward the threshold. |
| Does it include zero-rated supplies? | Yes. Zero-rated sales (e.g., exports, basic groceries) count. |
| Does it include exempt supplies? | No. Long-term residential rent, most healthcare, and most financial services are excluded. |
| Does it include foreign clients? | Yes for the threshold calculation. The supply may be zero-rated, but the dollars count toward the $30,000. |
| Does it apply per business or per person? | Per person, including all sole proprietorships and associated entities under common control. |
Two examples of crossing
Example A — single quarter: A freelance developer signs a $35,000 contract that pays in March 2026. The single calendar quarter (Q1 2026) exceeds $30,000. The developer is no longer a small supplier on the day of that supply and must register before invoicing. The $35,000 invoice is taxable; the developer must charge GST/HST on it.
Example B — four consecutive quarters: A copywriter earns $7,000, $8,500, $9,200, and $7,800 across four consecutive quarters, totaling $32,500. The four-quarter rule is satisfied at the end of the fourth quarter. Small-supplier status ends at the end of the second month after that quarter. The copywriter has until that date to register and must start charging GST/HST on supplies made after the effective date.
Why register voluntarily before $30,000
Three reasons, in order of typical impact:
- Input tax credits (ITCs). You recover the GST/HST paid on business expenses such as software, equipment, professional services, accounting fees, and home-office shares of utilities. For a freelancer with $5,000 in HST-eligible expenses, that is roughly $575 to $750 of recovery.
- Client credibility. B2B clients often expect a GST/HST number on invoices, particularly for contracts with corporations and government.
- Avoid mid-year switching. Registering once at the start of self-employment is simpler than tracking the threshold quarterly and reissuing invoices when you cross.
The trade-off of voluntary registration
Once registered, you must charge GST/HST on all taxable sales, file returns on schedule, and stay registered for at least one year. Customers who are not GST/HST registrants do not get a credit, so the additional 5 to 15 percent on the invoice can hurt price competitiveness with consumers and individual clients.
Filing once registered
| Annual taxable revenue | Default filing frequency | Election option |
|---|---|---|
| $1.5 million or less | Annual | Can elect quarterly or monthly |
| $1.5 million to $6 million | Quarterly | Can elect monthly |
| Over $6 million | Monthly | None |
Most freelancers default to annual filing. Annual filers with prior-year net tax over $3,000 must make quarterly instalments.
Quick Method of Accounting
A freelancer with annual taxable revenues under $400,000 can elect the Quick Method (Form GST74). Instead of tracking each input tax credit separately, the freelancer charges full GST/HST on sales but remits a reduced rate. The remittance rate depends on activity type and province, with a 1 percent credit on the first $30,000 of revenue. For many service-based freelancers, the Quick Method results in less GST/HST remitted than the regular method, and saves bookkeeping time.
Common errors
- Forgetting to count US or other foreign client revenue in the $30,000 threshold.
- Treating GST/HST collected as part of revenue when computing whether you crossed.
- Failing to register the same week the threshold is crossed.
- Charging GST/HST before registration is effective.
- Missing the requirement to file even when revenues are zero (nil returns are still required).
Frequently asked questions
- Does the $30,000 GST/HST threshold include foreign client revenue?
- Yes. The threshold is calculated on worldwide taxable revenues. Sales to non-Canadian clients count, even though those supplies may be zero-rated.
- Is the $30,000 threshold gross or net?
- Gross. Calculate based on revenues, not profit. GST/HST collected itself does not count toward the threshold.
- When does a freelancer have to register?
- Either before the supply that takes a single calendar quarter over $30,000, or by the end of the second month after the quarter in which the cumulative four-quarter total crosses $30,000.
- Should freelancers register voluntarily?
- Often yes. Voluntary registration lets a freelancer claim input tax credits on business expenses, which can recover roughly 5 to 15 percent of those costs depending on the province.
- What is the GST/HST Quick Method?
- An optional simplified accounting method available to businesses with annual taxable revenues under $400,000. The freelancer charges full GST/HST on sales but remits a reduced rate plus a 1 percent credit on the first $30,000.
- Are exempt services (e.g., counselling) part of the $30,000?
- No. Exempt supplies, such as most healthcare and most financial services, are excluded from the threshold calculation.
- What happens to invoices issued before registration?
- Invoices issued before the effective date of registration are not subject to GST/HST. Invoices issued on or after the effective date are taxable, even if the work was completed earlier.