GST/HST Quick Method: can it save you money?

Most small businesses that register for GST/HST use the "regular method": collect tax on sales, track the tax paid on every expense, and remit the difference. The Quick Method is CRA's simplified alternative — and for the right kind of business, it can mean less bookkeeping and a genuine cash saving.

What the Quick Method actually does

Instead of calculating input tax credits (ITCs) on every receipt, you apply a fixed remittance rate to your GST/HST-included revenue and send that amount to the CRA. The rate is deliberately set lower than the tax rate you charge customers, so the gap is meant to roughly replace the ITCs you'd otherwise claim. You still charge your customers the normal GST or HST rate — the Quick Method only changes how you calculate what you remit.

Are you eligible?

You can elect the Quick Method if, over the four fiscal quarters before you elect, your annual worldwide taxable supplies (GST/HST included) are $400,000 or less — combined with any associated corporations. You also need to be a GST/HST registrant and file on a regular basis.

A specific list of businesses is excluded regardless of revenue, including:

• Accountants and bookkeepers
• Tax return preparation and tax consulting services
• Audit services
• Financial consultants
• Lawyers, law offices and notaries public
• Actuaries
• Listed financial institutions

How the remittance rate works

The rate you use depends on two things: your province and whether goods purchased for resale make up 40% or more of your annual taxable supplies. Service businesses with few resale goods pay a higher rate than businesses that resell goods, because resellers already pay GST/HST on their inventory. As examples, based on the CRA's current published rates (Guide RC4058):

*Rates shown are for sales to customers in the same province as your business; rates differ if you ship to customers in other provinces. Confirm your exact rate against CRA Guide RC4058 or with us before electing, since rates vary by scenario.

The 1% credit on your first $30,000

On top of the lower rate, Quick Method registrants get a 1% credit on the first $30,000 of eligible supplies (GST/HST included) in each fiscal year. If you file annually, this applies to your first $30,000 of eligible revenue for the year; if you file monthly or quarterly, it applies to your early reporting periods until you reach the $30,000 mark. There's no carry-forward if you don't reach $30,000 in a given year.

Worked example: a solo consulting business

Consider an incorporated marketing consultant in BC with $120,000 in annual sales, no goods for resale, and modest expenses (say $10,000, mostly services carrying GST).

Regular method: GST collected at 5% = $6,000. ITCs on $10,000 of GST-bearing expenses at 5% = roughly $500. Net remittance ≈ $5,500.

Quick Method: GST-included sales = $126,000. Remittance at the BC service rate of 3.6% = $4,536. Less the 1% credit on the first $30,000 ($300) = net remittance ≈ $4,236.

In this example the Quick Method saves roughly $1,264 for the year — plus the time saved not tracking ITCs on every small expense. The savings shrink or disappear for a business with heavier deductible expenses, since the regular method would let you recover more tax on those purchases.

Who benefits — and who shouldn't elect

The Quick Method tends to favour low-overhead service businesses: consultants, agencies, and contractors whose main cost is their own labour rather than materials or subcontractors. It's less attractive for businesses with large equipment purchases, high subcontractor costs, or significant goods for resale, where the regular method's full ITC recovery is usually worth more. Run both numbers before you elect — we do this comparison as part of onboarding new GST/HST clients.

How and when to elect

You elect (or revoke) using Form GST74, filed through CRA My Business Account or by mail. Annual filers generally must elect by the start of their second fiscal quarter; monthly or quarterly filers must elect by the due date of the return for the period in which they want the Quick Method to start. Once elected, you generally must stay on the method for at least a year before revoking.

The bottom line

The Quick Method isn't automatically better or worse than the regular method — it's a trade-off that depends on your expense structure and province. If you're under the $400,000 threshold, not on the excluded list, and your expenses are mostly labour, it's worth running the comparison. We can model both methods against your actual numbers and handle the GST/HST filing either way.

About the author

Sunny Dhillon, CPA

Founder of EverStone CPA, a family-owned Abbotsford firm, and a member of the Chartered Professional Accountants of British Columbia (CPABC). Sunny works with incorporated contractors and small business owners across Canada on tax, bookkeeping and advisory. More about Sunny →

This article is general information, not tax advice for your specific situation. GST/HST rules and rates can change — confirm current figures with the CRA or with us before making an election.