ERP and accounting software for Canada: GST, HST, PST, QST

Canadian compliance in one view

Running the books of a Canadian business means charging the correct federal and provincial sales tax for wherever each supply is made, filing GST/HST returns electronically with the CRA or Revenu Québec, remitting payroll deductions on a fixed calendar, and keeping six years of records in Canada. It matters because each obligation reads directly from the ledger.

Canada splits the work between one federal agency and several provincial ones. The Canada Revenue Agency collects federal income tax, GST and HST, and payroll deductions. Revenu Québec administers GST and QST for businesses located in Quebec, and Quebec payroll contributions. Quebec and Alberta also collect their own corporate income tax on separate returns, and three provinces run their own retail sales taxes.

There is no business-to-business e-invoicing mandate, so the case for a better finance system in Canada is operational rather than regulatory: getting multi-jurisdiction tax right, closing on time, and producing statements an auditor or lender can rely on.

• Federal tax authority: Canada Revenue Agency (CRA)
• Quebec sales tax and payroll: Revenu Québec
• Currency: Canadian dollar (CAD); GST 5% nationwide
• Frameworks: IFRS for publicly accountable enterprises, ASPE or IFRS for private enterprises
• E-invoicing: no B2B mandate as of September 2026

Thirteen jurisdictions, three sales tax models

Canada has ten provinces and three territories, and they fall into three sales tax models. In the five participating provinces the federal GST and a provincial component are blended into a single harmonized sales tax, HST, administered by the CRA. Three provinces levy GST plus their own separately administered retail sales tax, and Quebec levies GST plus its Quebec sales tax, QST. Alberta and the three territories charge GST only.

Rates move. Nova Scotia cut the provincial part of its HST by one point on 1 April 2025, taking its HST from 15% to 14%, and the CRA publishes transitional rules for supplies that straddle such a change. A billing system that stores one rate and overwrites it loses the ability to explain an old invoice; one that holds the rate against each invoice line keeps history intact.

• HST 13%: Ontario
• HST 14%: Nova Scotia (from 1 April 2025)
• HST 15%: New Brunswick, Newfoundland and Labrador, Prince Edward Island
• GST 5% plus PST 7%: British Columbia
• GST 5% plus PST 6%: Saskatchewan
• GST 5% plus RST 7%: Manitoba
• GST 5% plus QST 9.975%: Quebec
• GST 5% only: Alberta, Yukon, Northwest Territories, Nunavut

Place of supply: the rate follows the customer

The place of supply is the province or territory where a supply is treated as made, and it decides which GST/HST rate applies. For goods the rule is simple: the goods are supplied where they are delivered. Services and intangible property have more detailed rules that look at where the service is performed, where the customer is located, or where real property sits.

The CRA's own worked example shows why the seller's location is irrelevant. A Winnipeg electronics store sells a 1,000 dollar laptop to a customer who lives in Halifax. Delivered to Nova Scotia, the place of supply is Nova Scotia and the store charges 14% HST: 140 dollars, 1,140 dollars in total. If the customer instead collects the laptop in Winnipeg, the place of supply is Manitoba and the store charges 5% GST and 7% Manitoba RST: 50 plus 70, 1,120 dollars in total.

Two presentation rules follow. Where HST applies, the invoice shows the total HST rate, not the federal and provincial parts separately. Where a provincial sales tax applies, GST is calculated on the price without the PST. A system that stacks one tax on top of another, or prints the HST split, produces invoices that do not match the CRA's guidance.

• Goods: taxed where delivered
• Services: generally where performed or where the customer is located, under detailed rules
• Real property services: where the property is located
• HST invoices: show the single combined rate
• GST beside a PST: calculated on the price before PST

Registration, input tax credits and invoice detail

A business is a small supplier, and need not register for GST/HST, while its worldwide taxable supplies, together with those of associated persons, do not exceed 30,000 dollars over four consecutive calendar quarters. If the 30,000 dollars is exceeded in a single calendar quarter, small supplier status ends immediately and tax is due on the supply that crossed the line. Many businesses register voluntarily so they can recover tax on their costs.

Registrants recover GST and HST paid on business inputs as input tax credits, ITCs, generally within four years after the end of the reporting period in which the credit could first be claimed; the limit is two years for listed financial institutions and businesses whose taxable supplies exceed 6 million dollars. Revenu Québec gives the equivalent QST recovery as input tax refunds, ITRs. Provincial retail sales taxes are different: British Columbia states plainly that there are no PST input tax credits, so PST paid on business assets is a cost.

An ITC is only as good as the invoice behind it. The documentary requirements scale with the amount of the sale, which is why a supplier's invoice template needs to carry the recipient's name and the registration number as standard rather than only when asked.

• Under 100 dollars: supplier name, invoice date, total paid
• 100 to 499.99 dollars: add the GST/HST charged or the rate, whether items are taxable, and the supplier's registration number
• 500 dollars or more: add the buyer's name, a description of the goods or services, and payment terms

Filing: the GST/HST calendar, GST34 and FPZ-500

The CRA assigns a reporting period from the registrant's annual taxable supplies: annual up to 1.5 million dollars, quarterly above 1.5 million and up to 6 million, and monthly above 6 million. Smaller businesses may elect a shorter period. Monthly and quarterly returns are due one month after the period ends; annual returns are due three months after the fiscal year end, or 15 June for individuals with business income. Annual filers whose net tax is 3,000 dollars or more must pay instalments.

Where the return goes depends on where the business physically is. A business located outside Quebec files its GST/HST return electronically with the CRA, the return known on paper as the GST34. A business located in Quebec files one combined GST/HST and QST return with Revenu Québec, known on paper as form FPZ-500, and since 1 January 2024 Revenu Québec also requires electronic filing from all registrants except charities.

Provincial retail sales taxes sit outside both systems. A registered British Columbia collector files PST returns through eTaxBC, and Saskatchewan and Manitoba run their own returns too. A business selling into several provinces can therefore file a federal return, a Quebec return and one or more provincial returns from the same month's sales, and every one of them has to agree with the ledger.

• Up to 1.5 million dollars of annual taxable supplies: annual
• Over 1.5 million up to 6 million dollars: quarterly
• Over 6 million dollars: monthly, no alternative
• Remittances of 10,000 dollars or more: electronic payment required

We are not going to invent a deadline

As of September 2026, Canada has no business-to-business e-invoicing mandate. No federal or provincial law requires structured e-invoices between businesses, and no timetable has been legislated. OpenPeppol's list of Peppol Authorities does not include Canada; where no national authority exists, OpenPeppol itself acts as the Peppol Authority. Invoices can lawfully be paper or electronic, provided they carry the information the ITC rules require.

The real-time regime that does exist is sector-specific and provincial. Under Quebec's mandatory billing measures, restaurant operators and remunerated passenger transportation businesses must record sales in a sales recording system certified by Revenu Québec, which sends each transaction to Revenu Québec's cloud environment, WEB-SRM, and must give every customer a bill produced by that system. Taxi businesses have had to use a second-generation certified system since 1 January 2026.

Any vendor telling a Canadian business it must buy software this quarter to comply with an e-invoicing rule is describing another country. The reason to change systems here is operational, and it is a good enough reason on its own.

Accounting frameworks, audit and the year end

Canadian standards sit in the CPA Canada Handbook, set by the Accounting Standards Board. Publicly accountable enterprises, broadly those with publicly traded debt or equity and those holding assets for a broad group of outsiders such as banks and insurers, have applied IFRS (Part I) since 2011. Private enterprises may choose Accounting Standards for Private Enterprises, ASPE (Part II), or IFRS. Not-for-profits use Part III or IFRS. Both ASPE and IFRS prohibit LIFO inventory costing.

Canada has no EU-style size threshold for statutory audit. The corporate statute requires an auditor, and the shareholders of a private company can dispense with one. Under section 163 of the Canada Business Corporations Act, the shareholders of a corporation that is not a distributing corporation may resolve not to appoint an auditor, but only with the consent of all shareholders, including those without a vote, and only until the next annual meeting. Provincial statutes set their own versions of this rule, and lenders often require a review or audit regardless.

Fiscal year ends are chosen freely, and many private companies avoid December. A corporation files its T2 return within six months of its tax year end and, except for insurance, non-resident and a few other corporations, must file electronically. Tax is due two months after year end, or three months for a Canadian-controlled private corporation that meets the small business conditions. Records must be kept for six years from the end of the last tax year they relate to.

Payroll: one country, two contribution systems

An employee's province of employment is the province of the establishment they report to in person, and it decides which rules apply. Outside Quebec, employers deduct federal and provincial income tax, Canada Pension Plan contributions and Employment Insurance premiums and remit them to the CRA. For 2026 the CPP rate is 5.95% each for employee and employer on earnings between the 3,500 dollar basic exemption and 74,600 dollars, and the EI rate is 1.63% of insurable earnings up to 68,900 dollars, with the employer paying 1.4 times the employee premium. Above 74,600 dollars, a second additional CPP contribution (CPP2) of 4% each applies to earnings up to 85,000 dollars.

For employees reporting to a Quebec establishment, the Quebec Pension Plan replaces CPP, Quebec parental insurance premiums apply, and the EI rate is reduced to 1.30% for 2026. QPP, QPIP and Quebec income tax go to Revenu Québec; CPP, EI and federal tax go to the CRA. A national employer therefore reconciles two remittance streams from one payroll.

The remittance calendar depends on the employer's average monthly withholding amount. Regular remitters pay by the 15th of the following month; accelerated remitters pay twice or four times a month; qualifying small employers may remit quarterly. T4 slips and the T4 summary are due by the last day of February, 2 March 2026 for the 2025 year, and more than five slips must be filed electronically. When an employee's earnings are interrupted, the Record of Employment is due to Service Canada within five calendar days after the end of the pay period for most electronic filers.

Cities and regions: where the rules differ

In Canada the province is the unit that changes the rules, and cities inherit them. A distributor in Toronto or Ottawa charges 13% HST and files with the CRA. A business in Montreal or Quebec City charges GST and 9.975% QST, files with Revenu Québec and works under the Charter of the French Language. Vancouver means GST plus 7% BC PST filed separately through eTaxBC. Calgary and Edmonton charge GST only. Winnipeg adds Manitoba's 7% retail sales tax, Saskatoon adds Saskatchewan's 6% PST, and Halifax charges 14% HST.

Local levies add a second layer in the accommodation sector: British Columbia's Municipal and Regional District Tax, Alberta's provincial tourism levy and Toronto's municipal accommodation tax each apply on top of sales tax. Cross-border commuting matters too. Staff who live in Gatineau but report to an Ottawa office are on Ontario payroll rules, because the establishment decides the province of employment.

Language is also regional. Federally, mandatory information on prepackaged consumer food must appear in both official languages. In Quebec, invoices, receipts and pre-set contracts must be in French, and an enterprise with 25 or more employees for six months must register with the Office québécois de la langue française. Our pages on Quebec, Ontario, British Columbia and Alberta go through each province's rules in depth.

How Skyline Nexus ERP handles Canadian requirements

Skyline Nexus ERP is a cloud ERP with a double-entry general ledger under the Fiscal Authority menu. When its auto-post switches are on, final sales, purchases, payments, expenses, payroll and depreciation post balanced journals in the background as each document is saved. Each business location, for example one per province, has its own invoice numbering scheme and invoice layout, and the trial balance, profit and loss and balance sheet can be filtered by location. Tax rates can be combined into tax groups of several sub-taxes, so GST plus PST or GST plus QST can be charged as separate lines, while an HST rate is a single percentage. Because the ledger's VAT settings name one input and one output tax account, agree during set-up how GST, HST, QST and PST are kept apart for each return. The VAT Return screen prefills tax-exclusive sales and purchase bases and tax for a date range and location, which your bookkeeper transfers to the CRA, Revenu Québec or provincial return.

Fiscal years can start in any month, with monthly or quarterly periods that can be soft-closed or locked, and the year-end close posts closing entries to retained earnings. Stock can be costed FIFO, the method compatible with both IFRS and ASPE; choose it in the Stock Accounting Method setting rather than the LIFO option, which neither framework permits. Treasury handles received and issued cheques, post-dated cheques and bank reconciliation from imported statement files, and an Accounting Audit Trail records who changed what, with old and new values. The interface language list includes French (Canada), and the Accounting module ships French (Canada) translation files, with any untranslated label shown in English; account names are held in English and Arabic.

Three points to plan for. Canadian payroll, meaning CRA and Revenu Québec source deductions, T4 and RL-1 slips and Records of Employment, is part of the Canadian roll-out rather than live today; until your go-live, run payroll in a Canadian payroll service and post its journal. Tax rates carry no effective-date history, so a rate change such as Nova Scotia's is handled by creating the new rate on the day. And because Skyline Nexus ERP is a cloud service, confirm where your data is hosted, keep your own year-end exports such as the Audit Pack workbook, and ask the CRA for permission if your records are held outside Canada. Tell us your provinces and we will confirm your go-live plan.

Rates, regimes and deadlines in this summary change, and many countries are actively legislating on e-invoicing. This is general information, not tax or legal advice — confirm the current position with the authority named above or with your tax adviser before you rely on it.