If you collect GST or HST from customers, you already know how much time goes into tracking purchases and calculating input tax credits (ITCs) on every return. The quick method of accounting offers a faster alternative to calculating your gst remittance on each individual purchase. This guide covers what the quick method is, how to calculate your remittance, who qualifies, and how to file the election.
Key Takeaways
- The quick method is a simplified way to remit GST/HST using flat rates instead of tracking every ITC.
- You must have annual taxable supplies under $400,000 to qualify.
- Remittance rates vary by business type and province.
- You file Form GST74 to make or revoke your election with CRA.
- Revocations require a minimum one-year waiting period before re-electing.
What Is GST Quick Method Accounting?
The quick method accounting approach is designed to help small businesses to calculate and remit GST with far less bookkeeping. The election of the quick method lets you apply a single flat remittance rate to your taxable sales instead of tracking every individual ITC.
Here is how it works: you still charge GST on sales at the standard rate (5% federally, or HST in participating provinces), but you remit to the CRA only a portion of what you collected. The Canada Revenue Agency sets rates based on your business type and province. The quick method is a simplified way to manage your GST obligations, and the method can save you significant time while potentially reducing your net remittance.
You keep the difference between the GST/HST collected and the lower applicable remittance rate. That spread is your effective savings per reporting period.
Quick Method Remittance Rate: How Rates Are Structured
The quick method remittance rate you apply depends on your business type and whether your province charges GST only or HST. CRA sets rates based on those two variables and publishes them in the official quick method guide.
Below are common quick method remittance rates for GST-only and HST registrants:
| Business Type | GST-Only Rate | HST Ontario (13%) |
|---|---|---|
| Service business | 3.6% | 8.8% |
| Retailer / Wholesaler | 1.8% | 4.4% |
| Food / Accommodation | 1.8% | 4.4% |
The applicable remittance rate applies to your total taxable sales with GST/HST included, not your pre-tax sales. You also receive a 1% credit on the first $30,000 of eligible supplies per fiscal year, which further reduces the total amount you owe.
How Small Businesses Can Use the Quick Method
To be able to use the quick method, you must meet all of the following conditions:
- In business continuously for at least 365 days, or be a new registrant with projected annual taxable supplies under $400,000
- Worldwide taxable supplies under $400,000 in the previous year (including GST/HST)
- No prior revocation of the quick method in the same period: if you revoked a previous election, you must wait before re-electing
- Charge GST on sales (not exclusively zero-rated supplies as your primary activity)
- Fall within an eligible business category: see the restricted list below
Who cannot use the quick method:
Certain businesses are excluded regardless of revenue or business type. These include:
- Accountants, bookkeepers, and tax preparers
- Financial consultants and financial institutions
- Lawyers, law offices, and notaries public
- Actuaries
- Municipalities and public authorities
- Colleges, universities, and hospitals
- Charities and non-profit organizations receiving 40% or more in government funding
If your business falls into any of these categories, you must use the regular method and track ITCs individually on each return. This is a hard restriction: revenue does not override it.
Once you confirm you are eligible for the quick method, you must make the election before you begin using the quick method. Eligible small businesses that elect early lock in the rate for their entire fiscal year. File the election with CRA before the start of your chosen reporting period to avoid gaps in coverage.
How to Calculate Your Quick Method Remittance
Follow these steps to calculate your remittance under the quick method:
- Add GST/HST to your gross sales to get the tax-included total.
- Multiply that total by the applicable remittance rate for your province and business type.
- Subtract the 1% credit on the first $30,000 of eligible supplies (available once per fiscal year).
- Report the result on your return for the reporting period.
Example: Ontario service business (HST at 13%):
- Annual sales (before HST): $90,000
- HST collected (13%): $11,700
- Tax-included total: $101,700
- Quick method rate (8.8%): $101,700 × 0.088 = $8,950
- Less 1% credit on first $30,000: −$300
- Net remittance: $8,650
Under the regular method, you would remit the $11,700 in gst collected minus ITCs claimed on business expenses. If your ITCs are less than $3,050, the quick method is more favourable.
Example: Ontario consulting firm ($100,000 in annual sales, HST at 13%):
Regular Method:
| Amount | HST Return Line | |
|---|---|---|
| Total sales (excluding HST) | $100,000 | Line 101 |
| Applicable HST rate | 13% | |
| Total HST collected | $13,000 | Line 103 |
| Total expenses (HST applicable) | $50,000 | |
| Applicable HST rate | 13% | |
| Less: ITCs on expenses | ($6,500) | Line 106 |
| Net HST owing | $6,500 | Line 109 |
Quick Method:
| Amount | HST Return Line | |
|---|---|---|
| Total invoiced (sales + HST collected) | $113,000 | Line 101 |
| Applicable quick method rate | × 8.8% | |
| Subtotal | $9,944 | |
| Less: 1% credit on first $30,000 billed | ($300) | |
| Total HST remittance | $9,644 | Line 103 |
| HST paid on expenses | $0 | Line 106 |
| Net HST owing | $3,480 | Line 109 |
| Net tax savings | $3,020 | (6,500 − 3,480) |
The firm had very few claimable ITCs, mostly software subscriptions and a small home office. Because their input costs were low, the flat remittance rate came out significantly cheaper than tracking ITCs individually. This is the scenario where the quick method delivers the most value.
Whether you file monthly or quarterly, the same applicable remittance applies for that period. A quarterly filer in a high-revenue Ontario service business should run both calculations before filing the election.
ITCs and GST Paid: Quick Method vs. Regular Method
The main trade-off is ITCs. Under the regular method, you track every business purchase and claim ITCs to reduce your gst owing. Under the quick method, you give up most of those claims in exchange for a flat rate.
However, you can still claim input tax credits on capital property: for example, buying a vehicle or major equipment for the business. In some situations, you may also choose the quick method or the simplified method for claiming ITCs on capital property; the method or the simplified method for claiming ITCs requires separate tracking regardless of which you select. The simplified method for claiming ITCs is a different CRA election available to larger registrants. Do not confuse it with the quick method election.
The quick method remittance typically works out better than the regular method for service businesses with low day-to-day input costs. If you purchase large volumes of taxable inputs regularly, compare both methods before electing.
Should You Switch to the GST/HST Quick Method?
The quick method tends to deliver the most savings when your claimable ITCs are low relative to your revenue. A simple way to think about it: if most of your costs are salaries, subcontractors, or rent, none of which carry significant GST/HST, the flat remittance rate will almost always beat tracking ITCs individually.
Run the numbers before electing if any of the following apply to your situation:
The quick method likely works in your favour if:
- Your business is service-based with minimal taxable inputs
- Your major expenses are payroll, rent, or insurance
- You operate in an HST province: the spread between what you collect and what you remit is widest there
- You want to reduce bookkeeping time and the administrative cost of ITC tracking
Stick with the regular method if:
- You purchase significant inventory or materials with GST/HST
- Your annual ITC claims regularly exceed the remittance spread
- You are in a capital-intensive phase: purchasing equipment, vehicles, or leasehold improvements
- Your taxable supplies are approaching or exceed $400,000 annually
The break-even point is roughly when your ITCs equal the difference between the GST/HST you collect and your applicable quick method remittance rate. Use the calculator above to find your specific threshold before making the election.
Switching to the Quick Method: The Quick Method Election
To make the quick method election, file Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting, with the CRA. You can submit it online through My Business Account or by mail to your tax centre.
Time your filing carefully. You must make the election by the first day of the reporting period in which you want it to apply. Alternatively, you can file an election by the due date of the return for the period you are targeting, which means the election by the due date rule gives annual filers some flexibility. If you are entering your second fiscal quarter and have not yet elected, speak with a CPA to confirm whether you can still make the election during the current fiscal quarters.
To begin using the quick method in a new fiscal year, make the election on or before the first day of that year.
Revoking the election:
To revoke your election, re-submit Form GST74 with the revocation indicated. You must wait at least one year from the effective date before CRA will process a revocation of an election. Once CRA confirms the revocation, you return to the regular method and must remit to the CRA on the full ITCs-minus-collected basis. You can revoke an election only once per year, and you cannot immediately re-elect after doing so.
Conclusion
The quick method of accounting can simplify GST administration significantly for eligible small businesses, especially service-based businesses in HST provinces where the remittance spread is most meaningful.
Before electing, confirm:
- Your annual taxable supplies are under $400,000
- Your business type qualifies (not accounting or actuarial services, legal, or financial services)
- You file the election form before your target reporting period begins
- You understand the ITC trade-off, particularly for capital property
- You are prepared to wait at least one year if you later want to revoke
If you are unsure whether the quick method suits your situation, connect with our team for a quick review.
Frequently Asked Questions
How much gst do I actually remit under the Quick Method?
Less than under the regular method in most cases. If you use the quick method in Ontario (HST at 13%), you apply an 8.8% rate to your total HST-included sales instead of remitting the full 13% collected minus ITCs. The quick method is a simplified way to calculate that amount with far less recordkeeping.
Can I still claim input tax credits if I use the Quick Method?
You give up routine ITCs on operating expenses. However, you can still claim input tax credits on capital property purchases such as vehicles or equipment. The simplified method for claiming ITCs on capital property applies in those specific cases: track those purchases separately.
What form do I use to make the Quick Method election?
File the CRA election form (GST74) with the CRA. It covers both the election to use the quick method and the revocation. You can complete it online through My Business Account or submit a paper copy to your local tax centre.
When does my Quick Method election take effect?
Your election takes effect from the first day of the reporting period you specify when you file the election. Late filings are generally not accepted retroactively, so plan ahead before your fiscal year or reporting period begins.
How long do I have to wait before I can revoke your election?
You must wait at least one year from the election effective date. After that, submit the CRA election form indicating a revocation. Following revocation, you return to full ITC tracking under the regular method and must file monthly or quarterly returns accordingly.
GST/HST Quick Method Calculator
GST Quick Method Savings Calculator
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