The $30,000 GST/HST threshold has two tests, and they give different answers

Almost every Canadian business starts out as a small supplier: below a revenue threshold, you are not required to register for GST/HST, and you do not charge it. The threshold is $30,000.

What almost nobody explains properly is that there are two separate tests against that one number, and they end your small-supplier status on different days.

Test one: a single calendar quarter#

If your worldwide taxable supplies exceed $30,000 within one calendar quarter, you stop being a small supplier immediately. Your registration takes effect no later than the day of the supply that crossed the line, and that supply is itself taxable.

That last part is the sharp edge. If you are at $27,000 for the quarter and sign a $10,000 contract, that contract does not simply put you over for next time — it is the first taxable supply, and it needs tax on it. Invoice it without, and you owe the tax anyway, out of your own margin.

Test two: four consecutive quarters#

If your total over four (or fewer) consecutive calendar quarters exceeds $30,000, but no single quarter did, the outcome is gentler. You stop being a small supplier at the end of the month following that quarter, and registration takes effect no later than your first supply after that.

This is the rule that produces results which look wrong. A business that crosses $30,000 cumulatively in March is still correctly not charging tax through April. Nothing has gone wrong; that is the rule working as written.

What counts toward the $30,000#

More than people expect:

• Worldwide taxable supplies, not just Canadian ones. Zero-rated supplies count too, even though you charge 0% on them — which means an exporter can be required to register while collecting almost nothing.
• Supplies of associated businesses. Splitting revenue across two corporations you control does not give you two thresholds.
• It excludes exempt supplies, and excludes sales of capital property.

It is a rolling measure, not a fiscal-year one. The four quarters are the last four, whenever you happen to look.

Registering before you have to#

You can register voluntarily at any time, and for a lot of businesses that is the better call.

A registrant charges tax — but also claims input tax credits on the tax it pays. A small supplier does neither: no tax collected, and no recovery of the tax on everything it buys. If you are spending meaningfully on equipment, software, contractors or inventory, that unrecovered tax is a real cost.

The trade-off is roughly this. If you sell to other registered businesses, they recover whatever you charge them, so your prices are effectively unchanged and registering is close to free money. If you sell to consumers, adding tax either raises your price or eats your margin, and waiting has a genuine benefit.

Account	Debit	Credit
6200 · Software	500.00
1310 · GST/HST Recoverable	65.00
2100 · Accounts Payable		565.00
Total	565.00	565.00

An unregistered business books the whole $565 as expense. That $65 difference, repeated across a year of purchases, is what voluntary registration recovers.

After you cross#

Registering starts a chain of other decisions. You get assigned a reporting period based on your revenue, you begin tracking tax collected and tax paid in separate accounts, and every invoice you issue needs to carry your registration number so your customers can support their own credits.

You also have 29 days from your effective date of registration to actually register — the effective date and the paperwork date are not the same thing, and backdating is normal.

To check where you stand, the small-supplier threshold tool takes four quarters of revenue and tells you which test applies, when status ends, and from which supply you would start charging.