How to Calculate GST on a Canadian Invoice

GST is calculated on the taxable selling price before GST. For a $1,000 taxable service in a GST-only province, multiply $1,000 by 5%: the GST is $50 and the invoice total is $1,050. That simple formula is the starting point, but a reliable invoice also has to account for registration status, provincial taxes, discounts, mixed taxable lines, and consistent rounding.

This guide is for Canadian freelancers, contractors, and small service businesses that want to check the math before sending an invoice. It is general information, not tax advice; place-of-supply and exemption rules can change the result for a specific transaction.

GST invoice formula

Use this formula when the price shown is before tax

GST = taxable subtotal x 0.05

Total = taxable subtotal + GST

Example | Amount

Taxable consulting services | $1,250.00

GST at 5% | $62.50

Invoice total | $1,312.50

If a discount applies to the whole taxable service, calculate GST after the discount. A $1,000 service with a 10% discount has a taxable subtotal of $900, so GST is $45. Do not calculate tax on an amount the client is not being charged.

When GST is not the only tax

The province and the type of supply matter. Alberta commonly uses 5% GST only. Ontario and participating Atlantic provinces use HST. Quebec commonly shows GST and QST as separate lines. British Columbia, Saskatchewan, and Manitoba can involve GST plus a provincial sales tax with rules that vary by the goods or services sold.

Do not add 5% GST on top of HST. HST already combines the federal and provincial portions. For Quebec, calculate GST at 5% and QST at 9.975% on the price before taxes; QST is not calculated on a GST-inclusive subtotal.

Work through mixed invoice lines

Suppose an invoice has three lines

• Taxable design work: $800
• Taxable printing: $200
• Reimbursed disbursement with different tax treatment: $75

Confirm the treatment of each line instead of applying one rate blindly to the final total. Line-level tax controls make the invoice easier to review and reduce the chance of taxing an exempt or differently treated amount.

Round predictably

Calculate from the exact line values and round displayed currency amounts to the nearest cent in a consistent way. Avoid repeatedly rounding intermediate values. The backend or accounting record should remain the source of truth; the invoice preview is there to help you catch obvious mistakes.

For a quick check, use gst qst calculator. To create the client document after verifying the tax, open invoice generator and choose the province and tax rates that apply.

When to charge GST or HST

Being self-employed does not automatically mean you should charge GST. Most businesses must register once they stop qualifying as small suppliers, while eligible businesses under the threshold may register voluntarily. The common threshold is $30,000 in worldwide taxable supplies in a single calendar quarter or over four consecutive calendar quarters, with exceptions for some activities.

The current rules and timing are explained in the CRA registration guide. If you are not registered and not required to register, do not invent a GST number or collect GST from a client.

GST invoice checklist

• Confirm that you are registered or required to register.
• Identify the place-of-supply and the applicable provincial regime.
• Separate taxable, zero-rated, exempt, and differently treated lines.
• Apply discounts before tax when the discount reduces the selling price.
• Show GST, HST, QST, or provincial tax clearly.
• Add the applicable registration number where required.
• Review the cents and final balance before sending the PDF.

For a complete document example, see GST Invoice Example Canada: Sample With Registration Number. For the fields needed on a tax invoice, use Tax Invoice Requirements Canada: GST/HST Checklist.

How much is GST on $100?

R: At 5%, GST on a taxable $100 price is $5, making the total $105.

Is GST calculated before or after a discount?

R: When a discount reduces the taxable selling price, GST is generally calculated on the discounted amount.

Should I charge GST and HST together?

R: No. HST is the combined tax used in participating provinces; it is not normally added on top of GST.