What Is the $30,000 Threshold for GST/QST Registration?

The $30,000 small supplier threshold is one of the most important rules in Canada’s sales tax system. It determines whether a business must register for GST (federal tax) and QST (Quebec sales tax). Many freelancers, online sellers, consultants, startups, and small businesses misunderstand how this threshold works, which leads to late registration, penalties, and retroactive tax assessments.

This guide explains what the $30,000 threshold is, how it’s calculated, and what happens when you pass it even accidentally.

What the $30,000 Threshold Really Means

Under the Excise Tax Act (GST) and the Quebec Taxation Act (QST), you MUST register for GST/QST once your worldwide taxable revenues exceed:

• $30,000 over the last four consecutive calendar quarters, OR
• $30,000 in any single calendar quarter

This applies to ALL types of businesses, including:
• freelancers
• consultants
• corporations
• partnerships
• e-commerce sellers
• service providers
• contractors

It is based on revenue, not profit.

What Counts Toward the Threshold?

The threshold includes:
• taxable supplies
• zero-rated supplies
• worldwide revenue
• revenue from all related businesses
• revenue earned personally AND through a corporation (if linked)

The threshold does NOT include:
• exempt supplies (certain health, education, finance)
• employment income

What Happens When You Exceed $30,000?

As soon as you cross the threshold:
• GST/QST registration becomes mandatory immediately
• You must start charging tax on your next invoice
• You cannot delay or postpone registration
• Revenu Québec may register you retroactively if you don’t act

If you keep invoicing without tax, you could owe thousands in retroactive GST/QST from your own pocket.

Example: Exceeding the Threshold

Quarter 1: $9,000
Quarter 2: $8,000
Quarter 3: $7,500
Quarter 4: $7,800

Total = $32,300 → Registration required.

OR

Quarter 1: $31,500 → Registration required immediately in that quarter.

What If You Register Late?

Consequences include:
• paying GST/QST that you should have charged
• interest
• penalties
• clients refusing to pay retroactive tax
• audit risk
• being denied input tax credits until registered

This is one of the most common audit triggers for freelancers and small businesses.

Should You Register Before $30,000?

Voluntary registration is often beneficial if:
• your clients are businesses
• you have startup expenses
• you want to claim ITCs/ITRs
• you expect rapid growth
• you want professional invoices

Voluntary registration allows you to recover GST/QST on expenses.

Who Is Automatically Exempt from Registration?

You are NOT required to register if:
• ALL your services are exempt (e.g., some health, education, childcare, finance), or
• you remain below the threshold AND choose not to register.

But you also cannot charge tax or claim input credits.

Common Mistakes Businesses Make

• thinking the threshold is based on profit
• ignoring worldwide revenue
• counting only Quebec sales
• believing online sales don’t count
• failing to monitor rolling quarters
• splitting revenue between entities to avoid threshold (not allowed)
• continuing to invoice without tax after passing $30,000

Mackisen Strategy

Mackisen CPA helps businesses:
• monitor the threshold
• register for GST/QST correctly
• fix late registrations
• claim eligible ITCs/ITRs
• prepare compliance systems
• respond to Revenu Québec if a review occurs

Real Client Experience

A freelancer exceeded $30,000 but didn’t register for two years. Mackisen corrected filings and avoided penalties through voluntary disclosure.

An online seller passed the threshold in one month due to a product launch. Mackisen registered them and protected them from retroactive assessments.

Common Questions

Do zero-rated sales count toward the threshold?
Yes, they are taxable supplies at 0%.

Can I charge tax before registration?
No this is a compliance violation.

Can I de-register later?
Yes, if your revenues drop long-term.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps small businesses apply GST/QST rules correctly, avoid penalties, and maintain clean, audit-proof compliance.