The GST/HST Quick Method: Who Qualifies and When It Pays Off
the $400,000 eligibility test, how remittance rates are set, and when the election pays
The GST/HST Quick Method lets eligible small businesses remit a reduced percentage of their tax-included sales instead of tracking input tax credits on most purchases. Eligibility generally requires annual worldwide taxable supplies, including GST/HST, of $400,000 or less, and some professions — including accountants and bookkeepers — are excluded. The election is filed with the Canada Revenue Agency and follows the client's reporting period.
What is the GST/HST Quick Method?
A simplified way to calculate net GST/HST. A business that elects it charges customers the normal GST or HST rate, but remits a lower prescribed remittance rate applied to its tax-included sales, keeping the difference in place of input tax credits on most operating expenses.
Nothing changes on the customer's side of the invoice, and nothing changes about the filing cadence. The election only changes the arithmetic of the return: instead of totalling actual input tax credits, the registrant applies the remittance rate and claims a 1% credit on the first $30,000 of eligible tax-included supplies each fiscal year.
Who can elect the Quick Method?
A registrant whose worldwide annual taxable supplies — including GST/HST, and including those of associated persons — are $400,000 or less, measured over the four most recent consecutive fiscal quarters. The test is revenue-based, so a client can grow into and out of eligibility from one year to the next.
Some suppliers are excluded outright regardless of revenue. Persons providing legal, accounting, bookkeeping, financial consulting or actuarial services cannot elect the Quick Method — which means an accounting firm cannot use it for its own practice, even though many of its clients can. Charities, public institutions and listed financial institutions are also excluded.
How do Quick Method remittance rates work?
Two variables set the rate: whether the business mainly resells goods or mainly provides services, and the province where it makes its supplies. Resellers get lower rates than service providers, and rates differ between the 5% GST provinces and HST provinces such as Ontario at 13%.
The CRA publishes the current remittance-rate table in its Quick Method guide (RC4058), and the applicable rate can change when a business starts supplying into a different province. Pull the rate from the current table for each client, each year, rather than carrying last year's figure forward.
How and when is the Quick Method election filed?
By filing the CRA's Quick Method election (form GST74) or electing through the CRA's online business services. Annual filers must elect by the first day of their second fiscal quarter; monthly and quarterly filers by the due date of the return for the period in which the election takes effect.
Once made, the election generally stays in place until revoked, and it must normally remain in effect for at least a year before a revocation can take effect. Treat both dates — the election window and the earliest revocation date — as client-level facts worth recording, not details to reconstruct later.
When does the Quick Method actually save money?
When actual input tax credits on operating expenses run low relative to sales. Service businesses with modest overhead — consultants, trades with few material costs, professionals who are not on the excluded list — tend to come out ahead; expense-heavy businesses that forgo large credits tend to lose.
The comparison is mechanical: net tax under the Quick Method versus net tax under the normal method, run on the client's actual figures. Capital purchases soften the trade-off, because input tax credits on capital assets such as equipment and real property remain claimable under the election. Firms that run the comparison at each year-end catch clients whose cost structure has shifted.
Does the Quick Method change any filing deadlines?
No. A Quick Method registrant keeps the same reporting period and the same due dates as any other registrant — the election changes how net tax is calculated, not when the return and payment are due.
| Filing | Applies to | Filing deadline | Payment | If it is late |
|---|---|---|---|---|
| GST/HST returns — monthly and quarterly filers | Registrants with monthly or quarterly reporting periods. | File and pay one month after the end of each reporting period. | Payment is due on the same date as the return. | The late-filing penalty is A + (B × C), where A is 1% of the amount owing, B is 25% of A, and C is the number of complete months the return is late, to a maximum of 12 — so 1% plus 0.25% per month, capped at 4%. A further $250 applies where the return is filed after a demand to file. Compound daily interest runs on late amounts. |
| GST/HST returns — annual filers | Registrants with an annual reporting period. | File and pay three months after the fiscal year-end. Annual filers who are individuals with business income and a December 31 year-end instead file by June 15 and pay by April 30. | Annual filers with $3,000 or more of net tax generally must also pay quarterly GST/HST instalments. | The same A + (B × C) late-filing formula applies. |
How firms track Quick Method elections across a client base
Record the election where deadline logic can see it. Firms using SpidNums attach GST/HST to each client through the Services catalogue on the client's actual cadence, note the election and its remittance rate in admin-defined custom fields, and let Reminders surface each filing period as it approaches.
The annual worth-it comparison fits the same system: a recurring task on the client's year-end project in Task Master, owned by a named preparer, so the election is re-examined on evidence rather than rolled forward by habit.
Frequently asked questions
What is the GST/HST Quick Method?
The Quick Method is a simplified way for eligible small businesses to calculate the GST/HST they remit. The business charges customers the normal GST or HST rate but remits a lower prescribed percentage of its tax-included sales, in place of claiming input tax credits on most operating expenses. Eligibility generally requires worldwide annual taxable supplies, including GST/HST, of $400,000 or less.
Who cannot use the Quick Method?
Persons providing legal, accounting, bookkeeping, financial consulting or actuarial services cannot elect the Quick Method, regardless of revenue. Charities, public institutions and listed financial institutions are also excluded. Everyone else must meet the revenue test: worldwide annual taxable supplies of $400,000 or less — including GST/HST, and including the supplies of associated persons — over the four most recent consecutive fiscal quarters.
Can you claim input tax credits under the Quick Method?
Not on most operating expenses — the reduced remittance rate stands in for those credits. Input tax credits remain claimable on capital purchases such as equipment and real property. This is the core trade-off of the election: businesses with low operating-expense credits tend to gain, while expense-heavy businesses usually do better under the normal method.
Do Quick Method users charge customers a different tax rate?
No. A Quick Method registrant charges the same GST or HST rate as any other registrant — 5% GST or the applicable HST rate, such as Ontario's 13%. The election changes only the calculation of net tax remitted to the Canada Revenue Agency, never the tax shown on a customer's invoice.
How long does a Quick Method election stay in effect?
Until it is revoked. The election carries forward from year to year without renewal, and it must normally remain in effect for at least one year before a revocation can take effect. A business that outgrows the $400,000 eligibility threshold must stop using the method under the CRA's rules, so eligibility is worth rechecking annually.
Related guides
How firms run this
By province
Turn these dates into tickets.
SpidNums generates the work from each client's cadence and year-end, then ranks it by proximity.