How to Handle GST/QST for a Part-Time Business or Side Hustle

Introduction

Running a part-time business or side hustle in Quebec — whether as a freelancer, online seller, or self-employed consultant — still comes with tax responsibilities. Even if you only work weekends or earn modest income, you may still have to register, collect, and remit GST (Goods and Services Tax) and QST (Quebec Sales Tax) once your earnings cross certain thresholds.

This practical guide from Mackisen CPA Montreal explains how GST/QST rules apply to part-time entrepreneurs, when you must register, how to manage taxes efficiently, and how to stay compliant with Revenu Québec and the CRA without overcomplicating your side business.

Legal and Regulatory Framework

Both the Excise Tax Act (R.S.C. 1985, c. E-15) and the Quebec Sales Tax Act (R.S.Q., c. T-0.1) require any person or business making taxable supplies in Canada or Quebec to register for and collect sales tax once certain thresholds are met.

A “business” includes any regular or commercial activity carried on for profit, even part-time or occasionally. That means part-time ventures — such as freelance design, tutoring, online sales, photography, or consulting — can still trigger GST/QST obligations.

Key Threshold

Registration becomes mandatory once your total worldwide taxable revenues exceed $30,000 in any consecutive 12-month period.

Below that, you’re considered a small supplier, and registration is optional — but often beneficial.

Learning Insight

Revenu Québec defines taxable revenues broadly: if you invoice clients, sell online, or provide taxable services (not exempt like rent or health), your side hustle counts toward the $30,000 threshold.

Step-by-Step: How to Manage GST/QST as a Part-Time Business

Step 1 — Determine If You Need to Register

Add up your total taxable revenues (including freelance or platform income) over the last 12 months.

• If under $30,000 → registration optional.

• If $30,000 or more → registration mandatory.

Example:
A part-time web designer earns $12,000 in 2024 and $20,000 by mid-2025. Once the cumulative amount exceeds $30,000, they must register for both GST and QST immediately.

Step 2 — Consider Voluntary Registration

Even if you earn less than $30,000, registering voluntarily has advantages:

• You can claim Input Tax Credits (ITCs) and Input Tax Refunds (ITRs) on business purchases (software, laptop, internet, etc.).

• You appear more professional with clients who prefer working with registered suppliers.

• You establish tax discipline early as your business grows.

Learning Insight

Voluntary registration helps small side businesses recover taxes on start-up costs — often saving hundreds of dollars each year.

Step 3 — Charge and Collect GST/QST

Once registered:

• GST rate: 5%

• QST rate: 9.975% (applied on the subtotal including GST).

Example:
Service fee: $500
GST (5%): $25
QST (9.975% × $525): $52.49
Total invoice: $577.49

Display your registration numbers on each invoice:

• GST No. 123456789 RT0001

• QST No. 123456789 TQ0001

Learning Insight

Even a single invoice with GST/QST missing can trigger adjustments if audited. Include both numbers clearly on every document.

Step 4 — Keep Simple but Organized Records

You don’t need a full accounting department — just a consistent system. Use software like QuickBooks Self-Employed, Wave, or Excel to track:

• Sales (taxable and exempt)

• GST/QST collected

• Business expenses and QST/GST paid

• Net tax owing (collected – paid)

Keep all invoices, receipts, and electronic payment reports for six years, as required by law.

Step 5 — File and Remit on Time

Depending on your revenue, you’ll likely file annually. However, you can request quarterly filing to better manage cash flow.

File returns via:

• Mon dossier pour les entreprises (QST) at revenuquebec.ca.

• My Business Account (GST) at canada.ca/my-business-account.

If you owe tax, pay via online banking (Revenu Québec – TVQ / CRA GST/HST) or pre-authorized debit.

Deadlines:

• Annual filers: 3 months after year-end.

• Quarterly filers: 1 month after period-end.

Step 6 — Separate Personal and Business Finances

Open a small business bank account or a separate e-transfer wallet for your side hustle. Deposit client payments there and pay expenses from it.

This keeps your tax records clean and simplifies GST/QST tracking.

Learning Insight

Mixing personal and business expenses is the top reason side hustlers lose legitimate ITCs/ITRs during audits.

Common Errors to Avoid

• Assuming side income is too small to be taxed.

• Waiting until tax season to calculate the $30,000 threshold.

• Charging GST but not registering (illegal collection).

• Forgetting to remit QST on Quebec sales.

• Claiming ITCs on personal or mixed-use expenses.

Learning Insight

Once you charge GST/QST, you’re legally obligated to remit it — even if you didn’t reach $30,000 or spent the money. Always register before collecting.

Real Quebec Business Example

A Montreal photographer earned $33,000 from weekend gigs and neglected to register for QST. Revenu Québec assessed $3,300 in unremitted QST plus penalties.

Another part-time consultant registered early, tracked expenses digitally, and claimed over $1,000 in GST/QST refunds on home-office purchases.

Lesson: side hustles count as businesses — treat them professionally from day one.

Compliance Checklist

Do

• Track total revenues monthly.

• Register once you approach $30,000.

• Issue invoices with GST/QST numbers.

• File and pay taxes on time.

• Keep organized digital records.

Don’t

• Mix personal and business expenses.

• Charge tax before registration.

• Assume “small” means “exempt.”

• Ignore Revenu Québec correspondence.

Mackisen Strategy

At Mackisen CPA Montreal, we help part-time entrepreneurs and self-employed professionals manage compliance efficiently by:

1. Tracking the $30,000 registration threshold.

2. Registering for GST/QST and setting up Mon dossier access.

3. Automating bookkeeping for simple side businesses.

4. Filing annual or quarterly returns with audit-ready precision.

We make GST/QST compliance painless — so you can focus on your craft, not the paperwork.

Why Mackisen

With over 35 years of combined CPA experience, Mackisen CPA Montreal supports freelancers, gig workers, and small businesses across Quebec. Whether you earn $5,000 or $50,000 part-time, our experts ensure your side hustle stays fully compliant and profitable.