GST/HST Quick Method: Could Your Ontario Small Business Save Thousands?

By Bader A. Chowdry, CPA, CA, LPA | Insight Accounting CPA

If you run a small business in Ontario and collect HST from your customers, there is a good chance you are remitting more GST/HST to the CRA than you need to. The GST/HST Quick Method is one of the most underused tax strategies available to Canadian small businesses, and it could put thousands of dollars back in your pocket every year.

At Insight Accounting CPA in Mississauga, we regularly help business owners across the Greater Toronto Area switch to the Quick Method and immediately see savings. Here is everything you need to know.

What Is the GST/HST Quick Method?

The GST/HST Quick Method is an alternative accounting method offered by the CRA that simplifies how small businesses calculate their HST remittance. Instead of tracking every dollar of input tax credits (ITCs) on your purchases, you simply apply a flat remittance rate to your total revenue (including HST collected).

The key advantage: the remittance rate is lower than the actual HST rate you charge, which means you keep the difference. For many Ontario service businesses, this creates a permanent, legal tax saving every single year.

Who Qualifies for the GST/HST Quick Method in Ontario?

To elect the Quick Method, your business must meet these criteria:

Annual taxable supplies (including HST) must be $400,000 or less in the previous four consecutive fiscal quarters
You must be a GST/HST registrant
You cannot be a listed financial institution, charity, or public institution
You must file an election (Form GST74) with the CRA before the first day of the reporting period you want the Quick Method to apply

Most sole proprietors, partnerships, and small corporations in Ontario with revenue under $400,000 qualify. This covers a huge number of consultants, contractors, freelancers, professional service firms, trades businesses, and retail operations.

How Does the GST/HST Quick Method Work?

Under the regular method, you calculate your HST remittance as:

HST Collected from customers – ITCs (HST paid on business expenses) = Amount you remit to CRA

Under the Quick Method, the calculation changes to:

(Total revenue including HST) x Quick Method remittance rate = Amount you remit to CRA

You no longer need to track ITCs on most purchases (except for capital equipment over $30,000, which still qualifies for ITCs). This dramatically simplifies your bookkeeping and often reduces what you owe.

Quick Method Remittance Rates for Ontario

The remittance rates depend on your business type and province. For Ontario businesses collecting 13% HST:

Service businesses: 8.8% on the first $30,000 of eligible supplies (including HST), then the applicable rate on the remainder
Businesses that purchase goods for resale: 4.4% on the first $30,000, then the applicable rate on the remainder

The reduced rate on the first $30,000 is a one-time annual credit that effectively gives you an extra 1% discount on your first $30,000 of revenue each year.

Real Example: Regular Method vs. Quick Method

Let us look at a concrete example. Say you are an IT consultant in Mississauga billing $150,000 per year (before HST).

Under the Regular Method:

Revenue: $150,000
HST collected (13%): $19,500
Total revenue with HST: $169,500
Business expenses: $25,000
ITCs on expenses (13%): $3,250
HST remittance: $19,500 – $3,250 = $16,250

Under the GST/HST Quick Method:

Total revenue with HST: $169,500
First $30,000 at 8.8%: $30,000 x 8.8% = $2,640
Remaining $139,500 at 8.8%: $139,500 x 8.8% = $12,276
HST remittance: $2,640 + $12,276 = $14,916

Your Savings:

$16,250 – $14,916 = $1,334 per year that stays in your business. And this is a relatively modest example. Businesses with lower expense ratios (consultants, coaches, freelancers, professional services) often save $2,000 to $4,000 annually because they have fewer ITCs to claim under the regular method anyway.

Over five years, that is $6,670 to $20,000 in cumulative savings from a single election form.

When Does the Quick Method NOT Make Sense?

The GST/HST Quick Method is not always the better option. You should stick with the regular method if:

Your business expenses are very high relative to revenue (e.g., construction companies purchasing significant materials). If your ITCs exceed what the Quick Method rate would produce, you are better off claiming full ITCs.
You regularly make large capital purchases with significant HST components
You export goods or services (zero-rated supplies). The Quick Method applies to taxable supplies at the standard rate, and exporters may lose ITC recovery advantages.
Your revenue exceeds $400,000. You are no longer eligible.

The only way to know for certain is to run both calculations for your specific business. Our tax planning team models this for every eligible client as part of our annual review.

How to Elect the GST/HST Quick Method

Switching is straightforward:

Step 1: Complete CRA Form GST74 (Election and Revocation of an Election to Use the Quick Method of Accounting)
Step 2: File the form before the first day of the reporting period you want the election to take effect
Step 3: Begin using the Quick Method remittance rates on your next GST/HST return

The election stays in effect until you revoke it or become ineligible (e.g., your revenue exceeds $400,000). You can revoke by filing another GST74, but you must stay on the Quick Method for at least one year.

Common Mistakes with the GST/HST Quick Method

After reviewing hundreds of small business HST filings, these are the errors we see most frequently:

Not electing soon enough: Many business owners do not learn about the Quick Method until their accountant mentions it at year-end. By then, the current period has already started under the regular method. File the election early.
Forgetting the capital goods exception: Even under the Quick Method, you can claim ITCs on capital equipment purchases over $30,000 (before tax). Do not leave that money on the table.
Using the wrong remittance rate: Service businesses and goods-resale businesses have different rates. Using the wrong one triggers reassessments.
Not re-evaluating annually: If your expense profile changes significantly (you start buying more inventory, for example), the regular method might become more beneficial. Review the calculation every year.

How Insight Accounting CPA Can Help

At Insight Accounting CPA, we do not just file your returns. We actively look for ways to reduce what you owe, legally and permanently. The GST/HST Quick Method in Ontario is one of dozens of strategies we evaluate for every small business client.

Using our patent-pending AI governance framework alongside deep Canadian tax expertise, we analyze your revenue patterns, expense ratios, and business structure to determine whether the Quick Method, regular method, or a combination approach delivers the best outcome for your specific situation.

Our corporate tax services include full GST/HST compliance review, Quick Method analysis, and ongoing advisory to ensure you are never paying more than necessary.

Think the Quick Method could save your business money? Call us at (905) 270-1873 or book a consultation to find out. We will run the numbers for your business and show you exactly what you could save.

Frequently Asked Questions

Q: Can I use the GST/HST Quick Method if I am incorporated?

A: Yes. The Quick Method is available to sole proprietors, partnerships, and corporations, as long as annual taxable supplies are $400,000 or less and you are not a listed financial institution.

Q: Do I still charge customers 13% HST under the Quick Method?

A: Absolutely. You continue to charge the standard 13% HST on your invoices. The Quick Method only changes how you calculate your remittance to the CRA. Your customers see no difference.

Q: Can I switch back to the regular method if the Quick Method stops being beneficial?

A: Yes, but you must stay on the Quick Method for at least one full year before revoking. File Form GST74 to revoke the election, effective the first day of a new reporting period.

About the Author
Bader A. Chowdry, CPA, CA, LPA is the founder of Insight Accounting CPA, serving businesses across Mississauga, Toronto, and the Greater Toronto Area. Specializing in tax optimization for Canadian small businesses, Bader combines deep expertise with technology-driven analysis to deliver measurable financial results.

Insight Accounting CPA
Mississauga, Ontario | (905) 270-1873
Contact us today for your GST/HST Quick Method consultation.

GST/HST Quick Method: Could Your Ontario Small Business Save Thousands?