If you're running a business in Canada invoicing isn't quite as simple as just picking a template and filling in numbers. Between GST HST PST and QST it's easy to charge the wrong tax rate or leave off a required field without even realizing it. Here's what actually needs to be on a Canadian invoice and how to avoid the mistakes that trip up most freelancers and small business owners.
Do you even need to charge tax
Not every business needs to charge GST or HST right away. You're only required to register for GST/HST once your worldwide taxable revenue goes over $30,000 in a single calendar quarter or across four consecutive quarters. Under that threshold registration is optional. If you're not registered you legally cannot charge GST or HST on your invoices, even if you want to.
Some businesses register voluntarily before hitting the threshold specifically so they can claim input tax credits on their own expenses. Worth considering if you're spending a fair amount on business costs early on.
Understanding GST HST PST and QST
This is where most confusion starts so let's break it down simply.
GST (Goods and Services Tax) is the federal tax, sitting at 5% and applied across the country.
HST (Harmonized Sales Tax) combines the federal GST with a provincial portion into a single rate. Provinces using HST include Ontario at 13%, and Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island all around 14 to 15%.
PST (Provincial Sales Tax) applies in provinces that haven't harmonized with the federal system, like British Columbia and Manitoba. In these provinces GST and PST are charged separately, and each has its own registration requirement.
QST (Quebec Sales Tax) is its own thing entirely. Quebec runs its own system through Revenu Québec rather than the CRA, so if you're billing a Quebec client you're dealing with a separate tax authority altogether.
The rate you charge depends on where the client is located, not where your business is based. This is the single most common mistake freelancers make, charging their own province's rate to an out of province client instead of matching the rate to where the service or product is actually being supplied.
What has to be on a compliant invoice
If you're registered for GST/HST the CRA expects certain fields depending on the invoice total.
For invoices under $30, keep it simple:
- Your business or trade name
- The invoice date
- The total amount paid or payable
- An indication that GST/HST was charged
For invoices between $30 and $150, add:
- Your GST/HST registration number
- The purchaser's name
- The tax rate or a clear statement that tax is included in the total
For invoices over $150, the CRA expects the most detail, generally including your full business name and address, your GST/HST number, an invoice number, a description of the goods or services, the tax breakdown by rate, and the total amount due.
Your GST/HST number follows a specific format, your 9 digit business number followed by RT and a 4 digit reference, like 123456789RT0001.
Common mistakes worth avoiding
A few things that trip people up more than they'd expect:
- Charging tax without being registered. You cannot collect GST or HST unless you actually have a registration number, even if you assume you're supposed to charge it.
- Applying the wrong provincial rate. Always match the rate to the client's province, not your own.
- Not separating GST and PST as distinct line items. In provinces with both, lump-summing them together isn't compliant.
- Forgetting Quebec's separate system entirely. A Quebec client needs QST accounted for, not just GST.
- Skipping the registration number on larger invoices. Without it your client may not be able to claim their input tax credit, which becomes their problem and often turns into an annoyed email to you.
Building a Canadian invoice without the guesswork
Manually tracking which provincial rate applies to which client gets old fast, especially if you're billing across multiple provinces. Most basic templates only have one generic "tax" field, which doesn't hold up once you're dealing with GST and PST as separate charges or need to show a proper HST breakdown.
freeinvoices.online lets you set your tax fields to match exactly what a client needs, whether that's a straightforward GST line, a combined HST rate, or GST and PST shown separately. You can add your GST/HST registration number directly on the invoice and adjust the rate per client depending on their province, all without needing an account or software installed. For freelancers and small businesses billing across multiple provinces this removes most of the manual math and guesswork involved in staying compliant.
Quick answers
Do I need a business number to invoice clients in Canada?
Only if you're registered for GST/HST. If your revenue is under $30,000 you can invoice without one, but you also can't charge GST/HST until you register. Try it free — no signup needed.
What happens if I charge the wrong tax rate?
It can create reporting issues on your end and cause problems for your client if they try to claim an input tax credit based on an incorrect rate. Worth double checking before sending, especially for out of province clients.
Is Quebec really that different?
Yes. QST is administered separately from GST/HST through Revenu Québec, so Quebec clients need their own tax handling rather than being lumped into your standard rate.
How long do I need to keep invoice records in Canada?
Generally six years, in case the CRA requests supporting documentation for an audit or review.
Is electronic invoicing accepted in Canada?
Yes, e-invoicing is accepted and increasingly common, though it isn't mandatory for most businesses the way it is in some other countries.
Getting the tax side of invoicing right in Canada really comes down to knowing which rate applies to which client and keeping that information consistent every time you bill. Once the pattern clicks it stops being confusing and just becomes part of the process.
For the general walkthrough of fields, line items, and sending a PDF, see how to make an invoice step by step. Curious what a finished invoice should look like for your type of work? Browse invoice examples for every type of business. And for the fuller picture of required fields including tax, our how to make invoices guide covers the basics.