Invoice with HST
Invoice example for Canada with HST at 13%
A Canadian business registered for GST/HST must charge the rate for the province where the supply is made and show what its customer needs to claim input tax credits. This example from a Toronto user research firm to a credit union in Hamilton bills a usability study at $10,260 with $1,216.80 of HST at 13%, with its GST/HST number, the buyer's name, payment terms and one untaxed pass through line.
The invoice, page by page
The invoice as the client downloads and prints it.
The pricing, line by line
- Research plan and recruitment
- 1 × $2,400.00
- Moderated usability sessions
- 12 × $280.00
- Participant incentives
- 12 × $75.00
- Analysis and findings report
- 1 × $3,600.00
- Tax
- $1,216.80
- Total
- $11,476.80
Section by section
- Header
- The research firm's name, Toronto address, phone, website and billing email, with invoice number NRC-2219.
- Bill to and dates
- The credit union's accounts payable contact and Hamilton address, issued 13 October and due in 30 days.
- Title
- Invoice, the GST/HST registration number and the HST rate for Ontario.
- Lines
- Plan and recruitment, 12 sessions and the report at 13% HST, and incentives passed through with no tax.
- Totals
- Subtotal, HST, total and amount due in Canadian dollars.
- Notes and bank details
- The study and its delivery date, why HST applies, net 30 terms, then institution, transit and account numbers.
What a Canadian invoice needs for input tax credits
Canada has no single tax invoice format. Instead the Canada Revenue Agency sets out what a GST/HST registered buyer needs on an invoice to claim input tax credits, in three tiers. Under $100: the supplier's name, the date and the total. From $100: also the supplier's GST/HST registration number and the tax charged, or a statement that the price includes it, and the tax status of each item if some are taxed and some are not. From $500: also the buyer's name, a description of what was supplied and the payment terms. This invoice is over $500, so it carries all of them. The registration number and the rate are in the title, because the business block at the top prints the name and contact details.
How the HST is worked out
The plan and recruitment are $2,400, twelve sessions at $280 are $3,360 and the report is $3,600: $9,360 of taxable services. HST at 13% on those is $1,216.80. Twelve participant incentives at $75, $900, are passed through at cost and carry no tax rate on the invoice. The subtotal is $10,260 and the total $11,476.80. In Ontario the harmonized sales tax is 13%, combining the federal GST with the provincial part. A supplier in a province without HST would charge the 5% GST, and the customer might pay provincial sales tax separately.
How this differs from the Australian version
The structure is the same as the Australian tax invoice: the seller's number, the tax per line, and the buyer's details above a threshold. The differences are the rate, which depends on the province where the supply is made, the registration number, a nine digit business number followed by RT0001, the thresholds of $100 and $500, and the currency. Small suppliers in Canada with taxable sales of $30,000 or less, in a single quarter and over the last four, do not have to register. Net 30 is the usual business to business term, where Australian invoices more often use 14 days.
What makes this invoice work
It meets the $500 and over tier
For purchases of $500 or more, the CRA asks for the supplier's name and GST/HST number, the date, the tax charged, the buyer's name, a description and the payment terms. This invoice shows every one, so the credit union can claim its input tax credits.
The provincial rate is explained
The tax column shows 13% on the taxable lines and the notes say HST applies because the services were supplied in Ontario. In Canada the rate depends on the province of supply, so stating the basis saves a question from the buyer.
Pass through costs are kept apart
Participant gift cards are a separate line at cost with no tax rate. Each line's tax status is visible, which the CRA expects when an invoice mixes items that are taxed differently.
Questions people ask
What must a Canadian invoice show for GST/HST?
For purchases of $500 or more, the supplier's name and GST/HST registration number, the invoice date, the tax charged or a statement that it is included, the tax status of each item, the buyer's name, a description and the payment terms. This invoice shows all of them.
What is the HST rate in Ontario?
HST in Ontario is 13%, made up of the federal GST and a provincial part. Other provinces charge HST at their own rates, and provinces without HST have 5% GST, sometimes with a separate provincial sales tax. This invoice charges 13% because the services were supplied in Ontario.
Do I need a GST/HST number on my invoice?
If you are registered and the sale is $100 or more, the buyer needs your GST/HST registration number to claim input tax credits. It is your nine digit business number followed by RT and four digits. This invoice shows it in the title.
When does a Canadian business have to register for GST/HST?
When its taxable sales are more than $30,000 in a single calendar quarter or over the last four quarters, it stops being a small supplier and must register. Below that, registration is optional, and an unregistered business does not charge GST/HST.
How do I show items that are not taxed?
Show the tax status of each line. This invoice passes participant gift cards through at cost on their own line with no tax rate, while the services carry 13%. When an invoice mixes taxable and untaxed items, the CRA expects the status of each to be clear.
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