Tax Rates in Canada

This guide explains how to set up tax rates for Canadian businesses in Daybook. Whether you charge HST, GST, PST, or provincial sales tax, we've got you covered.

Understanding Canadian Sales Taxes

Canada has three types of sales taxes depending on your province:

Province	Tax Type	Rate
Ontario	HST	13%
British Columbia	GST + PST	5% + 7%
Alberta	GST only	5%
Quebec	GST + QST	5% + 9.975%
Nova Scotia	HST	15%
New Brunswick	HST	15%
Newfoundland	HST	15%
PEI	HST	15%
Manitoba	GST + PST	5% + 7%
Saskatchewan	GST + PST	5% + 6%

HST vs GST+PST

HST (Harmonized Sales Tax) is a single combined tax. GST + PST requires charging two separate taxes.

Setting Up Tax Rates

Quick Setup (Preset Rates)

Daybook includes preset tax rates for all Canadian provinces:

1. Go to Settings → Invoice Settings
2. Scroll to Tax Rates
3. Click Add from Presets
4. Select your province (e.g., "Ontario - HST 13%")
5. Click Add

The tax rate is now available on all your invoices.

Custom Tax Rates

If you need a custom rate (e.g., for zero-rated supplies or exempt services):

1. Go to Settings → Invoice Settings
2. Scroll to Tax Rates
3. Click Add Custom Rate
4. Enter:
   • Name: How it appears on invoices (e.g., "HST")
   • Rate: Percentage (e.g., 13)
   • Registration Number: Your HST/GST number (optional)
5. Click Save

Applying Tax to Invoices

Single Tax (HST provinces)

1. Create or edit an invoice
2. Add your line items
3. Click Add Tax
4. Select your tax rate (e.g., "HST 13%")
5. Tax calculates automatically

Multiple Taxes (GST + PST provinces)

For provinces with separate GST and PST:

1. Add your line items
2. Click Add Tax → Select "GST 5%"
3. Click Add Tax again → Select "PST" for your province
4. Both taxes appear separately on the invoice

Quebec (QST)

Quebec charges QST on the subtotal before GST is added. Daybook handles this calculation automatically when you select the Quebec preset.

Tax Registration Numbers

You can display your tax registration number on invoices:

1. Go to Settings → Invoice Settings
2. Find Business Tax Number
3. Enter your GST/HST number (e.g., 123456789RT0001)
4. This appears on all invoices automatically

When to Charge Tax

As a general rule:

• Charge tax on most goods and services sold to Canadian customers
• Don't charge tax on zero-rated supplies (basic groceries, medical devices, exports)
• Don't charge tax on exempt services (some financial services, residential rent)

Not Tax Advice

This guide provides general information only. Consult a tax professional or the CRA for advice specific to your business. Daybook does not provide tax advice.

HST Threshold

If your annual revenue is under $30,000 CAD, you're not required to register for or charge HST/GST. However, you may choose to register voluntarily to claim input tax credits.

Once you exceed $30,000 in a calendar quarter or four consecutive quarters, you must register within 29 days.

Common Questions

Do I need to show my HST number on invoices?

Yes, if you're registered. It helps your business clients claim input tax credits.

Can I set different taxes for different clients?

Yes. When creating an invoice, you can override the default tax rate for that specific invoice.

What about US or international clients?

Generally, you don't charge Canadian sales tax on exports. Use a 0% tax rate or remove tax for international invoices.

How do I handle exempt services?

Create a 0% tax rate called "Exempt" and apply it to invoices for exempt services.

Next Steps

• Create your first invoice
• Understand platform fees
• Creating Invoices - apply tax rates to your invoices