As a business owner or self-employed individual in Canada, it’s important to understand and comply with the Goods and Services Tax (GST) payment requirements.
GST is a federal tax that applies to most goods and services sold in Canada, and failure to pay the tax on time can result in significant penalties and legal consequences.
The purpose of this blog is to provide an overview of GST payments, highlight the different payment schedules, explain the consequences of late or missed payments, and offer guidance on how to file GST payments.
By understanding the GST payment process, you can ensure that you are meeting your tax obligations on time and avoid any potential legal and financial repercussions.
To help you stay on top of your GST obligations, this guide will provide you with all the information you need to know about GST payment dates in Canada.
GST stands for Goods and Services Tax, which is a federal tax imposed by the Canadian government on the sale of most goods and services in Canada.
GST is also commonly referred to as HST (Harmonized Sales Tax) in some provinces where the federal and provincial sales tax is combined.
The tax rate for GST/HST varies by province but is currently set at 5% for the majority of the country.
GST payment refers to the process of collecting and remitting the tax to the Canada Revenue Agency (CRA).
When a business or individual sells a good or service subject to GST, they are required to add the applicable tax to the price of the item and collect the tax from the buyer.
The collected tax must then be remitted to the CRA by the GST payment due date.
The amount of GST/HST credit that a Canadian may be eligible for in 2023 depends on several factors, such as their income, marital status, and number of children.
The Canada Revenue Agency (CRA) calculates the GST/HST credit based on the information provided in the previous year’s tax return.
As of 2023, the maximum GST/HST credit amounts per year are:
The credit amounts are gradually reduced based on income and are reduced to zero for higher-income individuals.
It’s essential to file your tax return on time and ensure that your information is up-to-date to receive the correct amount of GST/HST credit.
You can use the CRA’s online calculator to get an estimate of the amount of GST/HST credit you may be eligible for based on your income and household situation.
Here are some of the GST payment dates by province.
In Ontario, GST payments are due on the last day of the month following the reporting period. For example, if your reporting period covers January 1st to January 31st, your GST payment is due on February 28th.
The CRA accepts cheques or online payments for GST, and you can find more information on how to make a payment on the CRA website.
In British Columbia, GST payments are also due on the last day of the month following the reporting period.
Like Ontario, the CRA accepts cheques or online payments for GST, and you can find more information on how to make a payment on the CRA website.
In Alberta, GST payments are due on the last day of the month following the reporting period.
For example, if your reporting period covers January 1st to January 31st, your GST payment is due on February 28th.
The CRA accepts cheques or online payments for GST, and you can find more information on how to make a payment on the CRA website.
In Manitoba, GST payments are also due on the last day of the month following the reporting period.
Like Alberta, the CRA accepts cheques or online payments for GST, and you can find more information on how to make a payment on the CRA website.
No matter where your business is located in Canada, GST payments are due on the last day of the month following the reporting period.
If you have any questions or concerns about your GST payments, you can contact the CRA for more information.
If you choose to pay your GST by cheque, the CRA accepts cheques postmarked on or before the due date. I
The processing times for cheques can vary, so it’s a good idea to allow enough time for your payment to reach the CRA before the due date.
Businesses or individuals who sell goods or services in Canada, with annual sales exceeding $30,000, are required to register for GST and collect and remit the tax to the CRA.
This threshold may be lower in certain industries, such as taxis or short-term accommodations, where the threshold is set at $1 of revenue.
Certain exceptions may apply to specific types of goods or services, such as basic groceries and medical services, which are generally exempt from GST.
In addition, businesses that are not required to register for GST may choose to voluntarily register if they wish to claim input tax credits (ITCs) for the GST they pay on their business expenses.
This may be advantageous for businesses with significant expenses, as ITCs can be used to reduce the amount of GST owed to the CRA.
To calculate the GST owed, businesses need to multiply the total cost of goods or services sold by the GST rate of 5% (or the applicable rate in their province).
For example, if a business sells a product for $100, they need to add 5% ($5) to the price, making the total amount payable $105.
The business can then claim a credit for any GST they paid on their business expenses, resulting in a net GST amount owing to the CRA.
It’s important to note that businesses must maintain accurate records of their sales and expenses to calculate their GST correctly.
Failure to do so may result in errors or discrepancies in their GST filings, which can lead to penalties and interest charges
Businesses or individuals registered for GST must file and remit their tax payments to the CRA according to specific payment schedules.
The GST payment schedule depends on the annual sales revenue of the business.
Businesses with annual sales revenue exceeding $1.5 million are required to file and remit their GST payments monthly.
The due date for monthly GST payment is the 30th day of the following month. For example, the GST payment for sales made in January is due on February 28th.
Businesses with annual sales revenue below $1.5 million but above $30,000 may file and remit their GST payments quarterly. The due dates for quarterly GST payments are as follows:
Businesses with annual sales revenue below $30,000 may choose to file and remit their GST payments annually.
The due date for the annual GST payment is June 15th of the following year. However, businesses may also choose to file monthly or quarterly if they wish.
In addition to the above payment schedules, businesses may be required to make interim payments throughout the year based on their sales revenue. For example,
if a business has sales revenue exceeding $6 million in the previous year, they may be required to make monthly or quarterly payments on account in addition to their regular GST payments.
Once businesses have determined their GST payment schedule, the next step is to file and remit their GST payments to the CRA.
There are several methods available for businesses to file and pay their GST:
Businesses can file their GST payments online using the CRA’s My Business Account service.
This service allows businesses to file their returns, view their account balance, and make payments directly through their online account.
To use this service, businesses must first register for a Business Number and GST account, then sign up for a My Business Account.
Online filing is a quick and convenient way to submit GST payments, and it also ensures that businesses receive their refunds and credits faster.
Businesses with an annual turnover below $1.5 million can also use the CRA’s GST/HST Netfile service to file their GST payments.
This service allows businesses to file their GST returns electronically using commercial tax preparation software, such as QuickBooks or TurboTax.
To use this service, businesses must first register for a Business Number and GST account and then register for the Netfile service.
Filing through a Netfile is a quick and convenient way to submit GST payments, especially for businesses that already use commercial tax preparation software.
Businesses can also file their GST payments through a tax professional, such as an accountant or bookkeeper.
These professionals can assist businesses in preparing their GST returns and ensuring that their payments are filed accurately and on time.
Using a tax professional can be advantageous for businesses with more complex tax obligations, as they can provide expert advice and ensure that all relevant tax laws and regulations are being adhered to.
Businesses can make their GST payments through various payment options, including online banking, pre-authorized debit, or by mail.
Payments made through online banking or pre-authorized debit are the fastest and most convenient methods, as they ensure that payments are received by the CRA on time.
Businesses can also pay their GST using a credit card, but they should note that a convenience fee may be charged by their credit card provider.
Failing to make GST payments on time can result in severe consequences for businesses. Here are some potential consequences of late or missed GST payments:
If a business fails to remit its GST payments by the due date, it may face a late payment penalty.
The penalty is calculated as a percentage of the outstanding balance, with the percentage increasing the longer the payment remains overdue.
In addition to late payment penalties, businesses may also face interest charges on the outstanding balance.
The interest rate is currently set at 4% above the Bank of Canada’s overnight lending rate and is compounded daily.
If a business repeatedly fails to remit its GST payments on time, the CRA may suspend its GST/HST filing and payment privileges.
This can result in significant disruptions to a business’s operations, as they will be unable to charge or claim input tax credits until the issue is resolved.
In extreme cases, failing to make GST payments can result in legal consequences for businesses.
The CRA has the authority to take legal action against businesses that consistently fail to remit their GST payments or that deliberately avoid paying their taxes.
This can result in court fines, asset seizures, and even imprisonment in severe cases..
The Goods and Services Tax (GST) is a federal tax in Canada that is levied on the supply of most goods and services in Canada.
The GST is calculated at a rate of 5% on the value of the goods and services provided. Businesses that are registered for GST are required to collect and remit the tax to the Canada Revenue Agency (CRA).
In Canada, the due date for filing and paying the GST varies depending on the frequency of the business’s reporting period.
The CRA accepts both cheques and online payments for GST. If you choose to pay by cheque, it’s important to note that processing times for cheques can vary.
So it’s a good idea to allow enough time for your payment to reach the CRA before the due date.
If you choose to pay online, you can make a payment through the CRA’s My Business Account or through a financial institution.
If you choose to pay your GST by cheque, the CRA accepts cheques postmarked on or before the due date.
It’s important to note that processing times for cheques can vary, so it’s a good idea to allow enough time for your payment to reach the CRA before the due date.
In this blog, we discussed the importance of complying with GST payment dates and the potential consequences of failing to do so.
We reviewed the different GST payment schedules in Canada, the various methods of filing GST payments, and the penalties and interest charges for late or missed payments.
We also explored the legal and operational consequences that businesses may face if they do not comply with their GST obligations.
Complying with GST payment dates is crucial for businesses in Canada.
By doing so, businesses can avoid late payment penalties, interest charges, and the suspension of their GST/HST filing and payment privileges.
Failing to comply with GST payment dates can also lead to legal consequences, such as court fines, asset seizures, and even imprisonment in severe cases.
The CRA provides several resources and tools to assist businesses with their GST payment obligations.
This includes online filing and payment options, the GST/HST Netfile system, and access to tax professionals for assistance.
Businesses can also contact the CRA directly for support and guidance on their GST obligations.
By understanding the importance of complying with GST payment dates and utilizing the available resources and tools.
Businesses can minimize their risk of facing penalties or legal consequences and ensure that they are meeting their tax obligations in Canada.
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According to the CRA, the following dates were used to distribute GST/HST credits for 2022:
The Goods and Services Tax (GST) payment dates for 2023 in Canada are:
In Canada, the payment due dates for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) are: