The Quick Method for GST/HST Simplified

Introduction
Understanding the Quick Method for GST/HST simplified is essential for small businesses, freelancers, consultants, and service providers looking for an easier way to calculate and remit sales tax. The traditional GST/HST system requires businesses to track GST/HST collected and Input Tax Credits (ITCs) on every purchase. This is time-consuming and often unnecessary for service-based businesses with low expenses. The Quick Method allows eligible businesses to remit a lower effective rate of GST/HST and significantly reduce bookkeeping. For many entrepreneurs, the Quick Method results in higher net income, faster filing, and fewer audit risks. This guide provides a complete explanation of the Quick Method for GST/HST simplified, including eligibility rules, benefits, limitations, election requirements, and Québec equivalents.

Legal and Regulatory Framework
The Quick Method for GST/HST simplified is governed by the Excise Tax Act. The Quick Method is a special GST/HST remittance option for qualifying small businesses. Instead of remitting the full GST/HST collected, businesses apply a remittance rate that is lower than the actual tax charged.

Key rules include:

• You still charge GST/HST at the regular rate.
• You remit only a percentage of what you collect.
• You do not claim ITCs on most expenses (except capital purchases).
• You must file form GST74 to elect into the method.

Eligibility requirements:

• worldwide taxable revenues (including associate businesses) under $400,000
• business must be GST/HST registered
• certain professions cannot use the Quick Method (e.g., lawyers, accountants, financial consultants)
• election must be filed at the beginning of a reporting period

Remittance rates vary depending on:

• province of operation
• type of business
• GST vs HST vs multi-province operations

Understanding the Quick Method for GST/HST simplified helps small businesses streamline tax compliance.

How the Quick Method Works (In Simple Terms)
Under the Quick Method for GST/HST simplified:

1. You charge GST/HST on invoices as usual.

2. Instead of remitting the full amount collected, you apply a reduced percentage.

3. You keep the difference between GST collected and GST remitted.

4. You do not claim ITCs on operating expenses.

Example (Ontario, HST 13%):
A consultant collects $13 HST on a $100 invoice.
Quick Method remittance rate: approx. 8.8% of total sales.

If annual taxable sales are $100,000 (including HST):
• HST collected: $13,000
• Remittance using Quick Method: approx. $8,800
• Difference kept by business: approx. $4,200

This is why many service-based businesses prefer the Quick Method.

Québec Equivalent: QST Simplified Method
Québec has a similar program under Revenu Québec called:

• Méthode rapide de calcul des remboursements de taxes (QST Quick Method equivalent)

It allows simplified calculations for QST but is not identical to the GST Quick Method. Québec businesses often use both programs together if eligible.

Key Court Decisions
Courts have issued rulings confirming:

• the Quick Method must be elected properly—late elections are not automatic
• ITCs cannot be retroactively claimed once the Quick Method is chosen
• CRA can deny the Quick Method if eligibility rules were not met
• remittance rates must be applied consistently
• mixed-use businesses must separate qualifying and non-qualifying revenues

Québec courts similarly enforce strict compliance when using the simplified QST method.

Why CRA Targets This Issue
CRA reviews Quick Method claims carefully because:

• some businesses incorrectly believe ITCs can still be claimed
• revenue thresholds may be miscalculated
• professional service providers sometimes elect the Quick Method even when ineligible
• remittances may be underreported
• new businesses sometimes retroactively try to elect the Quick Method

Audit triggers include:

• claiming ITCs when using the Quick Method
• large differences between GST collected vs remitted
• inconsistent reporting periods
• sudden changes in remittance methodology

Understanding the Quick Method for GST/HST simplified avoids CRA reassessments.

Mackisen Strategy
Mackisen CPA provides a full-service strategy to determine whether the Quick Method is right for your business:

• analyzing revenue to see if you qualify under the $400,000 threshold
• determining whether your industry is eligible (service professionals often excluded)
• calculating savings compared to the regular GST method
• evaluating impact on QST filings for Québec businesses
• filing the GST74 election at the correct time
• setting up accounting software to track Quick Method remittances
• preparing GST/HST and QST returns under the simplified rules
• correcting errors through voluntary disclosure if elections were missed

We also help clients optimize cash flow by selecting the filing frequency that pairs best with the Quick Method.

Real Client Experience
Many businesses come to Mackisen unsure whether the Quick Method benefits them. One graphic designer saved over $3,500 annually by switching to the Quick Method. Mackisen recalculated their GST remittances and streamlined bookkeeping.

Another Québec business mistakenly believed they could use the Quick Method even though they exceeded the $400,000 threshold. CRA reassessed their filings. We corrected past returns and transitioned them to the regular method.

A consulting firm elected the Quick Method but incorrectly claimed ITCs. CRA denied the ITCs and charged interest. Mackisen refiled corrected returns and implemented proper procedures.

A photographer operating across multiple provinces used incorrect remittance rates. We recalculated each rate and filed accurate adjustments. These cases show how powerful—and risky—the Quick Method can be without proper guidance.

Common Questions
Businesses frequently ask:

• Can I claim ITCs with the Quick Method?
Only for capital purchases—not for regular operating expenses.

• When should I file the GST74 election?
At the start of a reporting period.

• Does the Quick Method apply to QST?
No—QST has its own simplified method.

• Do I still charge clients full GST/HST?
Yes—regular tax rates must be charged.

• Is the Quick Method always better?
No—businesses with large expenses may save more using the regular method.

• Can I use the Quick Method as a corporation?
Yes—if the corporation meets eligibility rules.

These answers help clarify the Quick Method for GST/HST simplified.

Why Mackisen
With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they’re entitled to. Whether you're filing your first GST/QST return or optimizing multi-year refunds, our expert team ensures precision, transparency and protection from audit risk. When applying the Quick Method for GST/HST simplified, Mackisen provides complete eligibility analysis, accurate calculations, election filing, and tax compliance services to protect your business.