You can download the CRA tax guide below.
https://solidtax.ca/wp-content/uploads/2022/09/rc4022-21e-HST-Registrants.pdf
The revenue of my construction is over 30k this year in Ontario, and I just registered for GST/HST. How should I record my business income and expenses?
After you register for GST/HST, you should charge your clients GST/HST on top of your fees. If your service fee is $1,000, the HST is 130 (13% of $1000 in Ontario), so the total charge to your client will be $1,130.
You need to record your expenses before GST/HST and the GST/HST you paid. If you paid $500 for business supplies in Home Depot, the HST should be $65, so you can deduct the $65 on your GST/HST reporting.
Most business expenses (supplies, gas, phone bill, tools) are subject to 13% HST in Ontario. But there are business expenses (bank charges, insurance, salary) that are HST exempt and you don’t pay GST/HST on these business expenses.
You can use the table below as an example to record your business sales and expenses with GST/HST.
| Sales before GST/HST | GST/HST Charged | Sales including GST/HST |
|
| 10,000 | 1,300 | 11,300 |
|
| 15,000 | 1,950 | 16,950 |
|
| 20,000 | 2,600 | 22,600 |
|
| Total | 45,000 | 5,850 | 50,850 |
| Expenses before GST/HST | GST/HST Paid | Sales including GST/HST |
|
| Supplies | 30,000 | 3,900 | 33,900 |
| Gas | 2,500 | 325 | 2,825 |
| Telephone | 1,200 | 156 | 1,356 |
| Bank charge | 560 | 0 | 560 |
| WSIB | 1,250 | 0 | 1,250 |
| Total | 35,510 | 4,381 | 39,891 |
My construction business income and expenses are in the table above. I also bought a truck and I use it more than 90% for my business. The cost of the truck is $20,000, with HST $2,600 paid. How do I file my GST/HST report?
The GST/HST will be reported as below
| Sales | 45,000 |
| HST collected | 5,850 |
| ITC | 6,981 |
| Refund | -1,131 |
The ITC is the HST on operation expenses plus HST paid for the truck (4,381+2,600 = 6,981). The HST you spent is more than you collected, so you will get a refund of $1,131.
I have a consulting business based in Ontario. My clients are in different provinces of Canada and abroad. I also hire a sub-contractor to work for my business and bought some equipment from other provinces. How should I record and report my GST/HST?
The GST/HST rates charged to your clients are based on your clients’ location.
You don’t pay your sub-contractor GST/HST if they are abroad. The GST/HST you paid for the equipment is based on the purchase location.
You should keep records and report as below
| Client Location | Sales | GST/HST Rate | GST/HST Charged |
| Ontario | 10,000 | 13% | 1,300 |
| Alberta | 10,000 | 5% | 500 |
| New Brunswick | 10,000 | 15% | 1,500 |
| USA | 10,000 | 0 | 0 |
| total | 40,000 | 3,300 |
| Purchase Location | Expenses | GST/HST Rate | GST/HST Paid | Sales including GST/HST |
|
| Equipment | Alberta | 10,000 | 5% | 500 | 10,500 |
| Gas | Ontario | 2,500 | 13% | 325 | 2,825 |
| Telephone | Ontario | 1,200 | 13% | 156 | 1,356 |
| Sub-contractor | USA | 2,500 | 0% | 0 | 2,500 |
| Total | 16,200 | 981 | 17,181 |
| Total Sales | 40,000 |
| GST/HST zero-rated sales | 10,000 |
| GST/HST Collected | 3,300 |
| ITC | 981 |
| HST Owing | 2,319 |
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