Written by Maryam Ajorloo, CPA · Reviewed by Behdad Karimi Dermeni, CPA
If you sell anything in Canada, sooner or later you hit the same question: am I supposed to charge GST or HST, and are they even different? The short version is that they are two faces of the same federal tax, and which one you charge comes down to a single thing: whether your province harmonized. Here is exactly how GST and HST differ, what the 2026 rates are by province, and which one applies to your business.
GST vs HST in one sentence: GST is the 5% federal Goods and Services Tax charged across Canada. HST is that same 5% federal tax blended with a province's sales tax into one combined rate (13% to 15%). If your province harmonized, you charge a single HST. If it did not, you charge the 5% GST and deal with any provincial tax (PST or QST) separately.
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The Rule of Thumb for GST vs HST
There is really only one federal sales tax in Canada. HST is not a separate tax, it is GST that moved in with the province and merged into one number. So once you know whether your province is a harmonized province, you already know which one you charge. Everything below is just filling in that answer for your province.
What Does GST Stand For?
GST stands for the Goods and Services Tax. It is a 5% federal tax that applies to most goods and services sold in Canada, from a consulting invoice to a coffee. It is a value-added tax, which means businesses collect it from customers and send it to the Canada Revenue Agency (CRA), claiming back the GST they paid on their own business purchases along the way.
Every province and territory has GST. The 5% federal piece never disappears. What changes from province to province is what sits on top of it.
What Does HST Stand For?
HST stands for the Harmonized Sales Tax. It is what you get when a province decides to combine its own provincial sales tax with the 5% federal GST into a single blended rate, collected and administered by the CRA as one tax.
For a business, harmonization is the friendlier setup: one tax, one rate, one return. You are not tracking a federal tax and a separate provincial tax side by side. You charge the HST rate for your province and file it in one place.
GST vs HST: The Key Differences
Here is the practical difference, side by side:
Coverage: GST is the 5% federal tax that exists everywhere in Canada. HST replaces both the GST and the provincial tax with one combined rate, but only in provinces that opted in.
Rate: GST is a flat 5%. HST ranges from 13% (Ontario) to 15% (New Brunswick, Newfoundland and Labrador, PEI), with Nova Scotia at 14%.
Who administers it: Both GST and HST are administered federally by the CRA, so a single GST/HST registration and return covers you either way.
The provincial layer: In a GST-only province, any provincial sales tax (PST in BC, Saskatchewan, and Manitoba, or QST in Quebec) is a separate tax with its own rules. In an HST province, that provincial layer is already baked into the one rate you charge.
The takeaway: HST provinces bundle everything into one rate and one return. GST-only provinces keep the federal and provincial pieces separate, which means more moving parts to track.
GST/HST Rates by Province in 2026
Which sales tax you charge depends entirely on the province. Here is the current 2026 breakdown:
Harmonized (HST) provinces, one combined rate:
Ontario: 13% HST
New Brunswick: 15% HST
Newfoundland and Labrador: 15% HST
Prince Edward Island: 15% HST
Nova Scotia: 14% HST (reduced from 15% on April 1, 2025)
GST-only, plus a separate provincial tax where it applies:
British Columbia: 5% GST + 7% PST
Saskatchewan: 5% GST + 6% PST
Manitoba: 5% GST + 7% RST
Quebec: 5% GST + 9.975% QST
Alberta: 5% GST only
Northwest Territories, Nunavut, Yukon: 5% GST only
Alberta and the three territories are the simplest place to sell: just the 5% GST, no provincial layer at all.
Input Tax Credits: The Difference That Hits Your Wallet
Here is the part most GST vs HST explanations skip, and it is the one that actually affects what you keep. When you are registered, you recover the sales tax you pay on business purchases through Input Tax Credits (ITCs).
In an HST province, you claim back the entire HST paid on eligible business expenses. Because the provincial portion is part of the HST, it comes back to you through the same ITC.
In a GST + PST province (BC, Saskatchewan, Manitoba), you claim back the 5% GST, but the PST you paid is generally not recoverable. It is a real cost baked into your purchases.
In Quebec, the 9.975% QST works more like the HST model: registered businesses can usually recover it through Input Tax Refunds (ITRs), separate from the federal GST.
What this means for you: two businesses buying the same equipment can end up with different real costs purely because of where they operate. That is why the GST vs HST distinction is more than trivia, it changes your bottom line.
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Which Rate Do You Charge?
A common trip-up: you charge based on where your customer is, not where you are. Canada's place-of-supply rules generally tie the rate to where the goods are delivered or where the service is used. So an Ontario consultant billing a client in Alberta usually charges 5% GST, not 13% HST.
The rules get more detailed for digital services, shipping, and cross-border work, and the CRA publishes the specifics in its place-of-supply and rate guidance. When in doubt, the province of your customer is the right starting point.
Where Registration and Filing Fit In
Knowing the difference is step one. There are two related jobs that have their own guides:
Registering: You generally have to register once your taxable sales pass $30,000 over four consecutive calendar quarters. The full walkthrough is in our guide on how to register for GST/HST in Canada.
Filing and paying: Once registered, you file returns and remit what you collected. We cover that end to end in how to file and pay GST/HST online.
If you are also weighing whether the CRA is going to come knocking on old returns, our explainer on how far back the CRA can audit businesses is a calmer read than it sounds.
Keep Your Sales Tax Straight From Day One
The GST vs HST question stops being stressful the moment your books know your province and apply the right rate for you. A few habits that keep it clean:
Set your sales tax profile once. Record your province and registration details so every invoice uses the correct rate instead of a guess.
Track the tax you pay, not just the tax you collect. Those Input Tax Credits are only worth claiming if the expenses are captured, so keep receipts organized in one place.
Let software do the arithmetic. ReInvestWealth's AI Bookkeeper categorizes transactions, applies the right GST/HST treatment, and keeps a receipt-backed trail, so your sales tax totals are ready when it is time to file.
Sorting GST from HST is not complicated once you see that they are the same federal tax in two outfits. Get your province right, claim your credits, and let your books carry the rest.
Connect your bank, let the AI categorize your transactions, and keep audit-ready books with the correct sales tax applied automatically. Built by CPAs, with a 30-day free trial. Start for free.
Frequently Asked Questions
What does GST stand for?
GST stands for the Goods and Services Tax, a 5% federal tax applied to most goods and services sold in Canada. It applies in every province and territory, and businesses collect it and remit it to the CRA.
What is the difference between GST and HST?
GST is the 5% federal tax on its own. HST is that same federal tax combined with a province's sales tax into one blended rate of 13% to 15%. HST only exists in provinces that harmonized; the rest charge GST plus a separate provincial tax where it applies.
Which provinces charge HST instead of GST?
Five provinces charge HST: Ontario (13%), Nova Scotia (14%), and New Brunswick, Newfoundland and Labrador, and Prince Edward Island (15% each). Everywhere else charges the 5% GST, with PST or QST added separately in some provinces.
Is QST the same as GST?
No. QST is Quebec's provincial sales tax (9.975%), charged on top of the 5% federal GST. Quebec did not harmonize, so you charge GST and QST as two separate taxes rather than one blended HST.
Do I charge GST or HST to a customer in another province?
You generally charge based on where your customer is (the place of supply), not where your business is. So a business in an HST province billing a client in Alberta usually charges 5% GST, not the HST rate.
Is HST just a higher GST?
Not quite. HST is not a bigger federal tax, it is the 5% GST plus the province's own sales tax collected as a single number. The federal portion is still 5%; the rest is the provincial share folded in.
Written by Maryam Ajorloo, CPA
> Maryam Ajorloo is the co-founder of ReInvestWealth and a CPA who specializes in small business tax, sales tax, and everyday bookkeeping. She helps entrepreneurs keep clean, audit-ready books and make sense of write-offs, filing deadlines, and the numbers behind their business. Read more · Connect on LinkedIn
Reviewed by Behdad Karimi Dermeni, CPA
> Co-founder of ReInvestWealth and a founding community builder at Stripe. Behdad built ReInvestWealth to give smart, busy entrepreneurs CPA-level accounting without the CPA-level price tag. Read more · Connect on LinkedIn
