Your First Self-Employed Tax Year: When to Register for GST/HST

You have to register for GST/HST once your self-employed income passes $30,000 in a single calendar quarter, or over any four calendar quarters in a row. Below that, you're a "small supplier" and don't need to charge sales tax. Once you cross the line, you have 29 days to register, and you start charging GST or HST on your next sale.

The test runs on your sales over calendar quarters, not on your tax year or your profit, and that's what trips up most new freelancers.

What counts toward the $30,000

The Canada Revenue Agency (CRA) counts your revenue before expenses from taxable sales anywhere in the world. A freelance designer who earns $32,000 and spends $10,000 on software and equipment is still over the threshold. If you control or are associated with another business, its sales count too.

A few things are left out: financial services, sales of capital property (like the car or computer you used for work) and goodwill if you sell the business.

Taxi and rideshare drivers, including Uber and Lyft drivers, don't get the threshold at all. They have to register from their first fare, whatever they earn.

How the four-quarter test works

The CRA uses calendar quarters: January to March, April to June, July to September and October to December. It looks at any four in a row, not just your calendar year.

Say you start freelancing as a graphic designer in Ontario and bill:

You crossed $30,000 in the October-to-December quarter, so you stop being a small supplier at the end of the following month, January 31. From your first invoice after that date, you charge HST, and you have 29 days from then to register.

The single-quarter test is stricter. If you land a $35,000 contract in one quarter, you're no longer a small supplier on the sale that takes you over $30,000, so that invoice already needs tax on it.

What you charge once you're registered

For most sales, you charge the rate for the province where your customer is, not where you live. The rates in 2026:

Quebec businesses register for both GST and QST with Revenu Québec, which uses the same $30,000 small-supplier test.

The tax you collect isn't your income. It belongs to the government until you file, so move it to a separate savings account when a client pays and it'll be there when the return is due.

Registering before you have to

You can register voluntarily even if you're under $30,000, and for some people it's worth doing early.

Once registered, you can claim back the GST/HST you pay on business expenses, through what the CRA calls input tax credits. On a $2,000 laptop bought in Ontario, that's $260 of HST you get back. If your clients are registered businesses, your HST costs them nothing, because they claim it back the same way.

It's a worse deal if you sell mainly to individuals, since adding 13% makes you more expensive than a competitor who doesn't charge HST. And once you register voluntarily, you have to stay registered for at least one year.

The Quick Method can let you keep part of the tax

Small businesses with up to $400,000 in yearly taxable sales can choose the Quick Method. You still charge the full GST or HST, but you send the CRA only a fixed percentage of what you bill, including tax, and keep the rest. You give up most input tax credits in exchange.

For a service business based in Ontario, that percentage is 8.8%, with a 1% credit on the first $30,000. On $40,000 of fees, you'd collect $45,200 with HST and remit about $3,678 instead of $5,200. If your expenses are low, as they often are for consultants, designers and writers, you keep roughly $1,500 that would otherwise go to the CRA. Accountants, lawyers, bookkeepers and tax consultants can't use it.

The rest of your first self-employed tax year

Registration is a one-time step. The bigger first-year surprises are income tax and CPP.

You pay both halves of CPP. An employer normally pays half. When you're self-employed, you pay the full 11.9% on net self-employment earnings between $3,500 and $74,600 in 2026, up to $8,460.90. On $50,000 of profit, that's about $5,500 in CPP before income tax.

Nothing is taken off as you go. No one withholds tax from your invoices, so the whole year's income tax and CPP comes due at once. The income tax calculator gives you the number to set aside. Self-employed people get until June 15 to file their return, but any balance owing is still due April 30.

You usually won't have to pay instalments in your first year, because they only apply if you owe more than $3,000 (or $1,800 in Quebec) in the current year and in one of the two previous years. If you owe more than that for your first year, expect the CRA to ask for quarterly instalments in your second, due March 15, June 15, September 15 and December 15.

The GST/HST return follows your income tax dates. Most small registrants file once a year. If you're a sole proprietor with a December 31 year-end, your GST/HST return follows the same dates: file by June 15, pay by April 30.

If you're still weighing a contract against a salaried job, the employee vs. contractor calculator shows what a contract rate is worth after CPP and tax.