When do I need a GST number as an independent contractor?

After returning from traveling I wanted the flexibility/freedom involved with being an independent contractor. As a newly self-employed individual my taxes are now my responsibilities and this has lead to a lot of questions, when and how should I charge GST/HST? Unfortunately I couldn’t get a straight answer on when to start charging but after a lot of searching I found a this article by Susan Ward that explains it in simple English and for a self-employed contractor like myself leaves very little to questions.

Most of us will start our business as a small supplier and have no need to charge GST/HST, there are 2 scenarios where you lose your small supplier status and therefore need to charge GST/HST:

1) If you are lucky enough to make more then $30,000 in sales (before expenses) in one calendar quarter (3 months) then at this point you are considered a GST registrant. You will have to collect GST/HST on the supply that made your revenue go over $30,000 and have to register within 29 days of the day that you made the supply that made your revenue go over $30,000.

2) If your revenue does not top $30,000 in one calendar quarter but does exceed $30,000 over four consecutive calendar quarters (one year), you are considered to be a small supplier over that time and for one month after those four quarter. After that you lose your small supplier status on the day you make the first supply after this period and have to register for the GST/HST within 29 days of this date.

To register for GST/HST you can visit the CRA site at:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rgstrng/menu-eng.html

Once you have for GST issues sorted I highly recommend using FreshBooks for your book keeping.

Let me know if anyone out there has different information or can offer additional insight.

4 Comments


  1. If I hire a contract worker do they charge me GST?

    Reply

    1. It would depend on how much they are making, pass along this article to them and they can asses their own situation.

      Reply

  2. My husband is now working for a contractor out of Niagara. He has been offered several jobs installing decks, flooring, decks that support pools, as well as, as wheel chair accessible ramps for these area. Other people outside of this facility are inquiring for his work for decks and w/c assessable ramps and so on so fourth. What kind of a GST registry would he require? Or would he have to obtain an “x” amount of revenue prior to registering? And can this be just cash based or through a government funding for the potential client until he is established as a contractor on his own. We have several people in need of my husbands expertise and wondering if you can answer our questions. Thank you so very much. If you are unable to assist, can you direct us in the right direction.

    Reply

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