How to Pay the GST/HST Your Alberta Small Business Owes

If you run a small business in Alberta, understanding your GST/HST obligations is one of the most important things you can do to stay on the right side of the Canada Revenue Agency (CRA). Many Alberta business owners are confused about when to register, how to calculate what they owe, and how to actually make the payment – and that confusion can lead to costly penalties.

This comprehensive guide walks you through everything you need to know about GST/HST for Alberta small businesses, from registration thresholds to filing deadlines and payment methods.

At BOMCAS Canada, we work with hundreds of Alberta small business owners every year to ensure their GST/HST filings are accurate, on time, and structured to minimize what they owe. Here’s what every Alberta business owner needs to know.

What Is GST and Does Alberta Have HST?

The Goods and Services Tax (GST) is a federal tax of 5% applied to most goods and services sold in Canada. Unlike Ontario, British Columbia, and other provinces that have harmonized their provincial sales tax with the GST to create the Harmonized Sales Tax (HST), Alberta has no provincial sales tax. This means Alberta businesses only collect and remit the 5% GST – not HST.

This is one of Alberta’s significant business advantages. Your customers pay less tax than they would in most other Canadian provinces, and your filing obligations are simpler.

However, “simpler” doesn’t mean “automatic.” You still need to register, collect, track, file, and remit your GST on time.

Step 1: Do You Need to Register for GST?

Not every Alberta business needs to register for GST immediately. The CRA requires you to register once your business exceeds the $30,000 small supplier threshold.

The $30,000 Rule Explained

You become a mandatory registrant when your total worldwide taxable revenues exceed $30,000 in a single calendar quarter, or over four consecutive calendar quarters. Once you cross that threshold, you must register within 29 days.

Key points:

• The $30,000 threshold applies to your total revenues – not just profit
• It counts revenues from all your business activities combined
• If you’re a new business, you must register before your revenues exceed $30,000 in a single quarter

Voluntary Registration

Even if your revenues are under $30,000, you can register voluntarily. This is often a smart move because it allows you to claim Input Tax Credits (ITCs) – essentially getting back the GST you pay on your business expenses. For businesses that spend significantly on GST-taxable inputs (equipment, supplies, services), voluntary registration can result in meaningful tax savings.

Our Edmonton bookkeeping team can help you assess whether voluntary registration makes sense for your business.

Step 2: How to Register for GST

Registering for GST is free and straightforward. You have three options:

1. Online: Register through CRA My Business Account
2. By phone: Call CRA Business Enquiries at 1-800-959-5525
3. By mail: Complete form RC1 (Request for a Business Number)

When you register, you’ll receive a Business Number (BN) with a GST/HST account identifier (RT0001). Keep this number on all invoices you send to customers.

Step 3: Collecting GST from Your Alberta Customers

Once registered, you must add 5% GST to your invoices for taxable supplies. Your invoices must include:

• Your Business Number (BN)
• The date of the invoice
• The name of your business
• The amount of GST charged (or a statement that GST is included)

What’s Taxable vs. Zero-Rated vs. Exempt

Not everything you sell is subject to GST. Understanding these three categories is critical:

Taxable supplies (5% GST applies):

• Most goods and services
• Commercial real estate
• New housing

Zero-rated supplies (0% GST, but you can still claim ITCs):

• Basic groceries
• Prescription drugs
• Medical devices
• Exports

Exempt supplies (no GST, and you cannot claim ITCs):

• Most health and dental services
• Educational services (tuition)
• Financial services (bank fees, insurance premiums)
• Residential rent

For most Alberta small businesses in trades, consulting, retail, food service, and professional services, your sales will be fully taxable at 5%.

Step 4: Calculating Your Net GST Owing

The amount you actually remit to the CRA is not all the GST you collected. You get to deduct the GST you paid on your own business expenses – these are called Input Tax Credits (ITCs).

The Formula:

Net GST Owing = GST Collected on Sales − ITCs (GST Paid on Business Expenses)

Example:

• You collected $5,000 in GST from customers
• You paid $1,200 in GST on business expenses (rent, supplies, equipment)
• Net GST owing = $5,000 − $1,200 = $3,800

What Qualifies as an ITC?

You can claim ITCs on GST paid for expenses that are reasonable and used in your business, including:

• Office rent
• Equipment and tools
• Business vehicle expenses (partial, based on business use percentage)
• Professional services (accounting, legal)
• Advertising and marketing
• Business meals (50% of the GST)
• Utilities for your business premises

You cannot claim ITCs on personal expenses, exempt supplies, or expenses for which you have no receipts.

Pro tip: Keep every receipt for business expenses. Our Edmonton small business accounting team can help you set up a bookkeeping system that tracks GST paid automatically.

Step 5: Choosing Your GST Reporting Period

The CRA assigns a reporting period based on your annual revenues:

For most Alberta small businesses, you’ll start with annual filing. As your business grows, you may switch to quarterly or monthly.

Should You File Annually, Quarterly, or Monthly?

• Annual filing is simplest – one return per year, due three months after your fiscal year end
• Quarterly filing means four returns per year – helpful if you regularly get GST refunds (since you get them faster)
• Monthly filing is required for large businesses and useful if you consistently have ITCs exceeding your GST collected

You can elect to file more frequently than your assigned period, but you cannot file less frequently without CRA approval.

Step 6: Filing Your GST Return

You have three ways to file your GST/HST return:

1. Online via My Business Account (fastest and most accurate)
2. NETFILE (direct from accounting software like QuickBooks or Sage)
3. Paper return (GST34-2 form, mailed to CRA)

What to Include in Your Return

Your GST return (Form GST34) asks for:

• Total sales and other revenues
• Total GST/HST collected
• Total ITCs claimed
• Net tax owing (or refund)

Most small businesses use accounting software that populates these numbers automatically. If you’re doing manual bookkeeping, you’ll need a running total of all GST collected and all GST paid for the period.

Our Edmonton accounting services team can prepare and file your GST returns on your behalf, ensuring maximum ITCs are claimed.

Step 7: Paying What You Owe

Once your return is filed, you need to pay any balance owing by the due date. You have several payment options:

Payment Methods

1. Online banking: Pay to “Federal – GST/HST Payment” as a bill payee through your bank
2. My Payment (CRA): Pay directly from your bank account at canada.ca/mypayment
3. Pre-authorized debit: Set up automatic payments through My Business Account
4. At your bank: In-person payment at most major Canadian banks
5. By cheque: Mailed to the CRA (allow extra time for delivery)

Due Dates

Important: If you’re a sole proprietor with an annual reporting period, your GST return is due June 15 – but if you owe money, it must be paid by April 30. Many people miss this distinction and end up paying interest.

GST Quick Method: A Simpler Option for Small Businesses

The CRA offers a simplified filing option called the Quick Method for businesses with annual revenues under $400,000 (before GST). Instead of tracking every ITC individually, you simply remit a fixed percentage of your gross revenues.

Quick Method Rates for Alberta (5% GST Province):

Example:

• Your revenues were $200,000 plus $10,000 GST = $210,000 total received
• As a service business: remit 3.6% × $210,000 = $7,560 (instead of tracking every ITC)
• You keep the difference between the GST you collected ($10,000) and what you remit ($7,560) = $2,440 savings

The Quick Method isn’t right for everyone – businesses with high GST expenses may do better with the regular method. Our BOMCAS accounting team can run the numbers and tell you which method saves you more money.

Common GST Mistakes Alberta Small Businesses Make

1. Not Registering on Time

Once you hit $30,000, you have 29 days to register. Missing this window means you owe GST on revenues going back to when you crossed the threshold – even if you didn’t collect it from your customers.

2. Charging GST When Not Registered

Collecting GST before you’re registered (or required to be) and not remitting it is a CRA violation. If you voluntarily registered, make sure you remit what you collect.

3. Missing the Payment Deadline vs. Filing Deadline

As noted above, the filing deadline and payment deadline are sometimes different. You can avoid late-filing penalties with a timely return, but you’ll still owe interest on unpaid amounts after the payment deadline.

4. Poor Recordkeeping

You need to keep all GST records for six years from the end of the year they relate to. This includes invoices, receipts, contracts, and your GST returns.

5. Claiming Personal Expenses as ITCs

Your vehicle is 80% business use? You can only claim 80% of the GST paid on vehicle expenses. Mixing personal and business is a red flag for CRA audits.

6. Forgetting About Imported Services (Digital Services)

If you purchase digital services from foreign companies (software subscriptions, online advertising, cloud services), you may owe GST on those purchases under the reverse-charge rules. This is an evolving area of Canadian tax law.

What Happens If You Don’t File or Pay on Time?

The CRA takes GST compliance seriously. Here’s what you’re facing if you fall behind:

Late filing penalty: 1% of the balance owing, plus 0.25% per month for up to 12 months
Late payment interest: Compound daily interest at the CRA’s prescribed rate (currently around 9-10%)
Repeated failure to report: Additional penalties can apply
Gross negligence: Penalties of 25% of the GST owing plus interest

If you’re behind on GST filings, the best thing to do is get caught up immediately – the CRA is more lenient with businesses that come forward voluntarily versus those they have to chase. Our Edmonton tax accountants have helped many Alberta businesses get back into good standing with the CRA.

Getting Professional Help with Your GST

GST filing is manageable for many business owners, but it gets more complex as your business grows. Here are situations where professional help pays for itself:

• You’re unsure what’s taxable vs. exempt in your industry
• You have significant business expenses and want to maximize ITCs
• You’re behind on filings and need to get compliant
• You’re considering the Quick Method election
• You’ve received a CRA letter about your GST account
• You have cross-provincial sales with different tax rates
• You’re buying or selling a business

BOMCAS Canada provides complete GST/HST preparation and filing services for Alberta small businesses of all sizes. We handle everything from registration to filing to CRA correspondence, so you can focus on running your business.

Summary: Your GST Checklist for Alberta Small Businesses

• [ ] Determine if you’re required to register (over $30,000 in revenues)
• [ ] Register for a GST account (free, takes 15 minutes online)
• [ ] Add 5% GST to all taxable invoices
• [ ] Track all GST collected and all GST paid on expenses
• [ ] Choose your reporting period (annual, quarterly, or monthly)
• [ ] File your return on time (online is fastest)
• [ ] Pay any balance owing by the deadline
• [ ] Keep all records for 6 years
• [ ] Consider the Quick Method if revenues are under $400,000

Need Help with Your Alberta GST Filing?

The team at BOMCAS Canada has helped thousands of Alberta small businesses stay GST-compliant while maximizing their Input Tax Credits. Whether you need a one-time filing or ongoing quarterly support, we’re here to help.

Book a Free Consultation with BOMCAS Canada →

Serving Edmonton, Calgary, Sherwood Park, Red Deer, Fort McMurray, and all of Alberta.