Running a business in Ontario comes with important responsibilities—including knowing when and how to register your business, what taxes you’re required to charge, and how to stay compliant with government rules. From understanding HST/GST obligations to learning about different categories of goods and services, voluntary registration benefits, and resources for payroll, income reporting, and business expenses, this guide will walk you through the essentials. Whether you’re just starting out or growing your existing business, you’ll find the information and tools you need to handle your tax responsibilities with confidence.

When You Must Charge HST

In Ontario, the Harmonized Sales Tax (HST) is a combination of the federal Goods and Services Tax (GST) and the provincial sales tax.

HST is mandatory when:

  • Your total revenue exceeds $30,000 in a single calendar quarter, or over four consecutive calendar quarters.
  • You voluntarily register for an HST account.

Until you hit that $30,000 threshold, you’re considered a small supplier and are not required to charge HST—unless you choose to register early.

Why You Might Register Voluntarily

Registering before you hit $30,000 can be smart if:

  • You expect to pass the threshold soon.
  • You want to claim Input Tax Credits (ITCs) on HST you’ve paid for business expenses.
  • You sell zero-rated goods or services (see below) and want to recover HST on inputs.
  • Some clients require you to have an HST number before they work with you.

CRA Categories of Goods & Services

The Canada Revenue Agency classifies goods and services into three groups:

1. Taxable

  • You charge, collect, and remit HST.
  • You can claim ITCs for HST paid on business expenses.
  • Example: Consulting services in Ontario.

2. Zero-Rated

  • You don’t charge HST, but you can claim ITCs.
  • Examples:
  • Fresh produce (e.g., selling cucumbers at a farmer’s market).
  • Services sold to non-registered businesses outside Canada.

3. Exempt

  • You don’t charge HST and cannot claim ITCs.
  • Examples:
  • Music lessons
  • Childcare services

More examples: CRA – Charge the GST/HST – Type of Supply

The Small Supplier Rule Explained

You must register for HST once your revenue before expenses exceeds:

  • $30,000 in a single calendar quarter (3 consecutive months), or
  • $30,000 in the last four consecutive calendar quarters (not a calendar year).

Example:
If you earn $32,000 between July 1 and June 30 the next year, you must register—even if no single calendar year exceeded $30,000.

Once you pass the limit, you must:

  1. Register for HST immediately.
  2. Start charging HST on your next sale.
  3. Collect and remit the correct rate based on the place of supply.

How to Register for HST

  1. Go to the CRA’s online registration: Register for a GST/HST account
  2. Provide your Business Number (BN). If you don’t have one, you can get it during registration.
  3. Once registered, you must file and remit HST at your assigned intervals—even if you have no sales.

CRA Contact: Phone: 1-800-959-5525

Tax Information & Resources

Before making tax-related business decisions, always refer to the Canada Revenue Agency and your provincial or territorial revenue agency.

Payroll in Canada – What You Need to Know

  • Set up a payroll program account with the Canada Revenue Agency (CRA)
  • Collect employee information, including: Social Insurance Numbers (SIN) and Completed TD1 forms (federal and provincial)
  • Calculate mandatory deductions: Canada Pension Plan (CPP), Employment Insurance (EI) and Income tax
  • Understand remittance schedules and submit deductions to CRA on time
  • Stay compliant with CRA payroll regulations each pay period
  • Use CRA payroll resources to guide you through setup, deductions, and ongoing management

Business or Professional Income – Key Steps for Canadian Entrepreneurs

  • Choose the correct industry code for your business type
  • Identify your income sources, including: Business, Professional, Farming, Rental and Partnership income
  • Declare eligible business expenses to reduce taxable income
  • Apply Capital Cost Allowance (CCA) for depreciable assets
  • Keep organized records of income, expenses, and receipts
  • Use CRA’s Business or Professional Income resources to guide your reporting and stay compliant

CRA’s Business Expense Guide – What You’ll Learn

  • Understand deductible business expenses for sole proprietorships and partnerships
  • Differentiate between current expenses (day-to-day costs) and capital costs (long-term assets)
  • Keep personal and business expenses separate to avoid confusion and audit risk
  • Claim valid write-offs using the T2125 form (or equivalent)
  • Document and report expenses accurately to maximize your claims
  • Use CRA’s Business expense guide as a reliable resource to stay organized and compliant

Tax Advantages of Running a Home-Based Business

  • Claim the Home Office Deduction if your workspace meets CRA requirements
  • Deduct a portion of your home expenses, including: Mortgage interest, Property taxes, Utilities, Home insurance, Repairs and maintenance
  • Write off business-related transportation costs, such as mileage and parking
  • Deduct eligible meal expenses when conducting business
  • Include costs for business-related software and subscriptions
  • Claim educational expenses that directly support your business
  • Deduct tax preparation fees for your business filings
  • Stay compliant with CRA guidelines by keeping detailed records and receipts
  • Read more on this article by YBL Accounting

Need Help?

BACD offers free advisory meetings to help you navigate HR, hiring, and compliance. Prebook a meeting by emailing bacd@durham.ca or calling (905) 668-4949.