Canadian Sales Tax: GST, HST, PST & QST

BizBooks Pro handles Canadian sales tax properly — every province, every tax, each tracked in its own payable account so your CRA and provincial remittances are always ready.

Overview

Canadian businesses charge different sales taxes depending on their province:

• GST (Goods and Services Tax) — the 5% federal tax, remitted to the Canada Revenue Agency (CRA)
• HST (Harmonized Sales Tax) — a single combined federal + provincial tax used in Ontario and the Atlantic provinces, also remitted to the CRA
• PST / RST (Provincial Sales Tax / Retail Sales Tax) — a separate provincial tax in British Columbia, Saskatchewan, and Manitoba, remitted to the province
• QST (Quebec Sales Tax) — Quebec's provincial tax, remitted to Revenu Québec

The hard part for bookkeeping is that in GST+PST provinces, one invoice carries two different taxes owed to two different agencies. BizBooks Pro solves this with multi-component tax codes: pick one code on the invoice, and each tax is calculated and tracked in its own liability account automatically.

One-Click Canadian Setup

1. Go to Settings → Sales Tax Codes
2. Click 🍁 Add Canadian Tax Codes

That single click creates tax codes for every province and territory, plus the payable accounts they post to: GST/HST Payable, PST Payable, RST Payable, and QST Payable. It is safe to click more than once — codes you already have are never duplicated.

Provincial Rates Included

Using Tax Codes on Invoices & Estimates

1. Create an invoice or estimate as usual
2. In the totals box, set Tax Code to your province (for example BC - British Columbia - GST + PST (12%))
3. The tax rate fills in automatically and locks — the code controls it
4. Save. Done.

Behind the scenes, BizBooks Pro splits the tax in the journal entry. A $1,000 invoice with the BC code posts:

Estimates carry their tax code through conversion, so an accepted estimate becomes an invoice with the same provincial treatment — including progress invoices billed as a percentage of the estimate.

Prefer a simple flat rate? Leave Tax Code on None (manual rate) and type any percentage, exactly as before.

Tax Components Explained

Each tax code is built from one or more components. A component is a single tax with three properties:

• Name — what shows in the journal memo (e.g. "GST", "PST (BC)", "QST")
• Rate — its percentage (supports fractional rates like Quebec's 9.975%)
• Payable account — the liability account it accrues in

Because each component has its own payable account, your balance sheet always shows exactly what you owe each tax agency. GST and HST share one GST/HST Payable account since both are remitted to the CRA on the same return.

Rounding is handled penny-perfect: component amounts are allocated proportionally and the final component absorbs any rounding remainder, so the journal entry always balances to the cent.

Input Tax Credits (Tax Paid on Purchases)

GST/HST you pay on business purchases is generally recoverable as an Input Tax Credit (ITC) on your CRA return — and BizBooks Pro tracks it automatically. Pick a tax code on any vendor bill and the tax splits by recoverability:

• GST / HST / QST (recoverable) accrues in a GST/HST Paid (ITC) asset account — money coming back to you
• PST / RST (not recoverable) posts to Sales Tax Expense, since it's a true cost of doing business

Example: a $1,000 supplier bill in BC with the BC code books $1,000 to the expense, $50 to GST/HST Paid (ITC), and $70 to Sales Tax Expense, with $1,120 owed to the vendor.

Remitting to the CRA & Provinces

When it's time to file, run Reports → Sales Tax. The Tax Liability by Agency table at the top shows, for any date range:

• Tax Collected — what you charged customers, per agency account
• Input Tax Credits — recoverable tax you paid on purchases
• Net Owing — collected minus ITCs: the number that goes on your GST/HST return

Then record each remittance payment against the corresponding payable account, bringing it down by the amount paid.

Custom Tax Codes

Tax codes aren't just for Canada. Build your own for any jurisdiction that stacks multiple taxes:

1. Go to Settings → Sales Tax Codes and click Add Tax Code
2. Give it a short code and a name
3. Add a component per tax — name, rate, and (optionally) the payable account. Leave the account blank and BizBooks Pro creates one for you
4. Save. The code appears in every invoice and estimate picker immediately

Examples: a US state + county + city stack, or a tourism levy on top of state sales tax.

Frequently Asked Questions

Can I run my books in Canadian dollars?

Yes. Set your company's base currency to CAD, and use BizBooks Pro's multi-currency invoicing for any US or overseas customers.

What happens to my existing invoices?

Nothing changes. Invoices without a tax code keep posting exactly as they always have. Tax codes only apply when you pick one.

I'm in Ontario — do I need components?

Your HST-ON code has a single 13% component posting to GST/HST Payable. One tax, one remittance — completely seamless.

Can I edit a rate when a province changes it?

Yes. Edit the component's rate in Settings → Sales Tax Codes. Historical invoices keep the amounts they were posted with.

Does deactivating a code break old invoices?

No. Deactivating only removes the code from the pickers. Every posted invoice keeps its history, and reopening an old invoice still shows its original code.

Is this included in every plan?

Yes. Sales tax codes are part of every BizBooks Pro plan at no extra cost.