How to Invoice as a Contractor in Canada: GST/HST Rules

Do I need a GST/HST number to invoice in Canada?

You can invoice without one while you are a small supplier. Registration becomes mandatory once worldwide taxable revenue exceeds $30,000 CAD in a single quarter or across four consecutive quarters. After you cross that line, register within 29 days and show your GST/HST number.

The CRA's small-supplier guidance sets out the threshold and the deadline. Registering late means the tax was still due on supplies made after the threshold, even if you did not charge it, so it is not a rule worth testing.

Below the threshold, you can register voluntarily. That lets you claim input tax credits on business purchases, but it also means charging and remitting GST/HST on every taxable supply. If you also invoice Australian clients, the Australia ABN and GST guide explains the 47% no-ABN withholding rule.

Which rate applies: GST, HST, PST or QST?

The rate follows the place of supply, which is usually where the customer is. GST is 5% federally. Some provinces use HST, a single combined rate. Others add PST, RST or QST on top of GST. Charge the combination that applies to your customer's province.

Charging your own province's rate to a customer in another province is a common error. The place of supply rules decide which tax applies, and for services they usually point to the customer's address. If you are unsure, the CRA's place of supply guidance and the relevant provincial authority are the sources to check before you invoice.

• GST only: the federal 5% applies with no provincial component.
• HST: one combined rate replaces GST and provincial tax in participating provinces.
• GST plus PST, RST or QST: show the federal and provincial lines separately.
• Zero-rated supplies, such as most exports, still belong on the invoice with the tax treatment stated.

What must a Canadian GST/HST invoice show?

Show your business name and GST/HST number, a unique invoice number, the invoice date, the customer's name and address, a description of the supply, the amount charged and the GST/HST separately. Keep the invoice and the records behind it for six years.

A business customer needs your GST/HST number to claim input tax credits. If the number is missing, the invoice is likely to come back for correction before it is paid.

• Your legal or trade name and business address
• Your GST/HST registration number
• A unique, sequential invoice number
• The invoice date and the date of supply if they differ
• The customer's name and address
• A description of the goods or services
• The subtotal, the GST/HST rate and amount, and the total

How should a Canadian contractor invoice be structured for payment?

Keep the invoice number, issue date, due date and total at the top, then show the work and the tax breakdown. Put payment details below the total and use the same numbering sequence every time so the client can match the invoice in their accounting system.

State the payment terms rather than leaving them implied. “Net 15” or “Due on receipt” removes the guesswork, and a due date in the first screen is easier for an accounts team to act on than one buried in a footer. The Canadian invoice template keeps the GST/HST number and provincial tax lines in the places a client expects.

How do I send and follow up on a Canadian contractor invoice?

Email the invoice as a PDF with the invoice number and due date in the subject line. Follow up a few days after the due date with a short reminder. Keep a copy of the invoice and the supporting records for six years from the end of the last tax year it relates to.

If a client asks why GST/HST was charged, point to your registration number and the customer's province. If they ask you to remove the tax, do not: once you are registered, charging and remitting it on taxable supplies is the rule, not a negotiation.