Running a small business in Canada means watching every dollar. One often-overlooked decision is how you file your GST/HST — using the Quick Method or the Regular Method. The choice you make can significantly impact your cash flow, bookkeeping requirements, and how much tax you remit to the CRA.
In this guide, we’ll break down both methods in plain language, provide examples, and help you decide which option could save your business money.
What Is the Regular Method?
The Regular Method is the default option most businesses start with. Under this approach, you:
- Charge GST/HST on sales (output tax).
- Deduct the GST/HST you pay on expenses (input tax credits or ITCs).
- Remit the difference to the CRA.
Example – Ontario business:
- Sales: $100,000 + $13,000 HST
- Expenses: $5,000 HST paid
- Remittance = $13,000 – $5,000 = $8,000 to CRA
👉 The Regular Method works well if you have significant expenses because you can fully claim ITCs. However, it requires detailed bookkeeping to track every receipt and credit.
What Is the Quick Method?
The Quick Method is designed for small businesses with simpler expenses. Instead of tracking ITCs, you:
- Collect HST at the full rate.
- Remit a reduced percentage of sales (rate set by CRA depending on your province).
- Keep the difference as savings.
Example – Ontario service business:
- CRA remittance rate: 8.8% of sales including HST.
- Billings: $113,000 ($100,000 + $13,000 HST).
- Remit = $113,000 × 8.8% = $9,944 to CRA.
👉 Compared to the Regular Method ($8,000), the Quick Method costs $1,944 more if your expenses are high.
But if your expenses are low (and therefore ITCs are small), the Quick Method can actually save you money — while simplifying your record-keeping.
Who Can Use the Quick Method?
The Quick Method is available to businesses with:
- Taxable sales under $400,000 annually (before HST).
- Service-based businesses or professionals with low expenses (consultants, IT, accountants, freelancers).
🚫 Not suitable if you:
- Have large purchases or inventory with significant HST.
- Operate in retail, contracting, or other high-expense industries.
Quick Method vs Regular Method – How to Decide
✔️ Use the Quick Method if:
- Your business has low expenses with little HST to claim.
- You want simpler bookkeeping.
- You run a service-based business (consulting, IT, design, accounting, etc.).
❌ Stick with the Regular Method if:
- You have high expenses (inventory, rent, equipment with HST).
- You want to maximize input tax credits.
- Your business is close to or above the $400,000 threshold.
Key Takeaway
Choosing between the Quick Method and the Regular Method for GST/HST depends on your business model.
- If you’re a service-based business with low expenses, the Quick Method can simplify compliance and sometimes even reduce remittances.
- If your business has significant input costs, the Regular Method usually puts more money back in your pocket.
At Blue Ocean Tax, we help Canadian small business owners evaluate both options and choose the method that maximizes their tax savings and supports healthy cash flow.
✅ Need help deciding which GST/HST method is right for your business?
📞 Call us today: 416-828-7462
🌐 Visit: www.blueocean.tax