How to Simplify GST/QST with the Quick Method: A Guide for Small Businesses

Introduction

If you’re a small business owner in Quebec, calculating and remitting GST (Goods and Services Tax) and QST (Quebec Sales Tax) every period can feel time-consuming and complicated — especially if you have limited expenses or few input tax credits to claim. Fortunately, the Quick Method offers a simplified alternative designed specifically for small businesses.

This guide from Mackisen CPA Montreal explains how the Quick Method for GST/QST works, who qualifies, how to calculate your remittances, and when it’s beneficial to switch. It’s a practical, CPA-approved approach to save time, reduce errors, and simplify your tax life.

Legal and Regulatory Framework

The Quick Method is authorized under:

• Excise Tax Act (R.S.C. 1985, c. E-15) — for federal GST/HST.

• Quebec Sales Tax Act (R.S.Q., c. T-0.1) — for provincial QST.

It allows eligible small businesses to remit only a percentage of their taxable sales rather than calculating GST and QST on every transaction while claiming input credits separately. Essentially, you collect the full GST/QST from customers but remit a reduced portion to Revenu Québec and CRA based on fixed rates.

Learning Insight

The Quick Method doesn’t change how you charge customers — only how you calculate and remit your taxes. You still charge the normal 5% GST and 9.975% QST but remit less to account for your input credits automatically.

Step-by-Step: How the Quick Method Works

Step 1 — Determine Eligibility

You can elect the Quick Method if your business’s worldwide taxable revenues (including associated businesses) are $400,000 or less in the last four consecutive quarters.

Eligible small businesses include:

• Consultants, freelancers, and professionals.

• Small retailers, service providers, and contractors.

• Restaurants and repair shops.

Not eligible:

• Accountants, lawyers, financial institutions, or not-for-profits.

• Businesses that mainly sell exempt supplies (e.g., medical, rental, education).

Step 2 — Understand the Basic Concept

Under the regular method, you:

1. Collect GST/QST on sales.

2. Claim Input Tax Credits (ITCs) and Input Tax Refunds (ITRs) on expenses.

3. Remit the net difference.

Under the Quick Method, you:

1. Still collect full GST (5%) and QST (9.975%) from customers.

2. Remit only a reduced percentage of your total taxable sales (the “remittance rate”).

3. Skip the detailed ITC/ITR calculations on most expenses.

Example — Consultant in Quebec

A consultant bills $100,000 (excluding taxes).
Collected taxes:

• GST: $5,000

• QST: $9,975

Under the Quick Method, instead of remitting the full $14,975 minus ITCs, you remit only a fixed rate (see below) of your gross taxable sales.

Step 3 — Know the Quick Method Remittance Rates

For Quebec-based businesses that collect both GST and QST, the approximate combined rates are:

Learning Insight

You collect 5% + 9.975% from your customers but remit only 3.6% + 6.6%, effectively keeping the difference as a simplified input credit.

Step 4 — File and Remit Using the Quick Method

1. File your GST/QST return via Mon dossier pour les entreprises or CRA’s My Business Account.

2. Report total taxable sales (including taxes collected).

3. Apply the appropriate remittance rates to calculate GST and QST payable.

4. Exclude detailed ITCs/ITRs — except for large capital asset purchases (vehicles, computers, etc.), which you can still claim separately.

Example Calculation (Service Business):
Total taxable sales (excluding taxes): $100,000
Collected GST/QST: $14,975
Quick Method rates: 3.6% (GST) + 6.6% (QST)
Remittance:

• GST payable: $3,600

• QST payable: $6,600
  Total remitted: $10,200
  You keep: $14,975 – $10,200 = $4,775 (simplified credit allowance).

Step 5 — How to Elect the Quick Method

For QST (Revenu Québec)

• Log in to Mon dossier pour les entreprises → “Consumption Taxes.”

• Complete Form FP-2074-V – Election or Revocation of the Quick Method of Accounting for QST.

• File before your first reporting period in which you want the method to apply.

For GST (CRA)

• Complete Form GST74 – Election and Revocation of an Election to Use the Quick Method of Accounting.

• Submit online via My Business Account or by mail to the CRA.

You must use the Quick Method for at least one full year before revoking it.

Step 6 — Monitor Suitability Over Time

While the Quick Method simplifies filing, it isn’t ideal for everyone. You might save money if your expenses are low, but if your business has high input costs, the regular method may yield higher refunds.

Switch back to the regular method if:

• You purchase large amounts of materials or inventory.

• Your taxable revenues exceed $400,000.

• You want to claim ITCs/ITRs on major asset purchases.

Common Mistakes to Avoid

• Forgetting to file Quick Method election forms before applying it.

• Using wrong remittance rates.

• Including zero-rated or exempt sales in the calculation.

• Double-claiming ITCs/ITRs after electing the Quick Method.

• Not adjusting when sales exceed $400,000.

Learning Insight

Revenu Québec may reassess you if you use the Quick Method without a valid election form or if your calculation includes ineligible sales. Always file your election before using it.

Real Quebec Business Example

A Montreal graphic design studio earning $120,000 annually switched to the Quick Method. With minimal expenses, the firm saved over $3,500 per year in taxes and bookkeeping time.

Another construction subcontractor with high material costs reverted to the regular method after realizing they lost potential ITCs worth $2,000 yearly.

Lesson: The Quick Method is ideal for service-based small businesses with low overhead.

Compliance Checklist

Do

• Confirm eligibility (revenues ≤ $400,000).

• File election forms (FP-2074-V & GST74).

• Use the correct remittance rates.

• Exclude exempt or zero-rated sales.

• Review annually if the method remains beneficial.

Don’t

• Use the Quick Method without official election.

• Claim ITCs/ITRs for expenses already covered by the reduced rate.

• Forget to adjust when sales exceed eligibility limits.

• Include non-taxable sales in remittance base.

Mackisen Strategy

At Mackisen CPA Montreal, we help small businesses simplify their GST/QST reporting through:

1. Eligibility assessment and Quick Method election filing.

2. Remittance calculations with current CRA/Revenu Québec rates.

3. Annual reviews to compare Quick vs. Regular method benefits.

4. Full bookkeeping integration for smooth, compliant filing.

We ensure you save time, money, and effort while staying 100% compliant.

Why Mackisen

With over 35 years of combined CPA experience, Mackisen CPA Montreal helps small businesses across Quebec optimize their GST/QST systems. From Quick Method elections to complete tax management, we ensure clarity, compliance, and cost savings.