If your business collects GST or HST but your annual taxable supplies sit at or below $1.5 million, you may qualify to file your GST/HST return just once a year. That single filing can simplify your bookkeeping considerably — but annual filers still have quarterly instalment obligations, strict deadlines, and CRA penalties for missteps. This guide covers everything you need to know about the GST/HST annual filer regime in Canada, including who qualifies, when instalments are due, how to calculate them, and how to stay on CRA's good side.
CRA assigns your GST/HST reporting period based on the total value of your annual taxable supplies (excluding zero-rated supplies and the tax itself). The thresholds break down as follows:
New GST/HST registrants with projected revenues under $1.5 million are typically assigned a quarterly reporting period initially. You can elect to switch to annual filing if your actual revenues remain below the threshold. The election must be made in writing to CRA, and it takes effect at the start of your next fiscal year.
It is worth noting that the $1.5 million threshold applies to your worldwide taxable supplies, not just Canadian revenues. If you are part of an associated group of businesses, CRA may look at combined group revenues when determining your filing frequency.
The GST/HST annual return is due three months after your fiscal year-end. For the majority of incorporated businesses with a December 31 fiscal year-end, that means the return is due March 31 of the following year.
Sole proprietors and self-employed individuals are a notable exception. Because your personal income tax return (T1) is due June 15, CRA aligns your annual GST/HST return deadline to June 15 as well. However — and this is a critical distinction — any balance owing on that return is still due by April 30. Filing by June 15 avoids a late-filing penalty, but paying late by even one day past April 30 will trigger instalment interest on the unpaid amount.
Annual filing does not necessarily mean annual payment. If your net GST/HST for the preceding year was $3,000 or more, you are required to make quarterly instalment payments throughout the current year. Each instalment equals 25% of your prior year's net tax (GST/HST collected minus input tax credits, or ITCs).
This catches many small business owners off guard. You file once, but you pay four times. Missing an instalment — or underpaying one — triggers instalment interest charges that compound from the due date.
For businesses with a December 31 fiscal year-end, the four quarterly instalment due dates are:
Sole proprietors follow these same instalment dates for GST/HST purposes. This is different from the personal income tax instalment schedule, which uses March 15, June 15, September 15, and December 15. Many self-employed individuals confuse the two — keeping a separate calendar for GST/HST instalments prevents costly interest charges.
The calculation is straightforward. Take your net GST/HST from the previous fiscal year's return and divide by four.
For example: if your net tax owing on last year's GST/HST return was $12,000, each quarterly instalment is $3,000. You send $3,000 to CRA four times throughout the year, then reconcile everything on your annual return. If your actual net tax for the current year turns out to be higher or lower, you either pay the remaining balance or claim a refund when you file.
CRA does not always send instalment reminders — it is your responsibility to calculate and remit on time. Your bookkeeping software or accountant can help you track this and adjust if your business circumstances change significantly from one year to the next.
Annual filers can also take advantage of CRA's Quick Method of accounting for GST/HST. Instead of tracking every ITC and remitting the difference, you collect GST/HST at the standard rate and remit a flat percentage of your total revenues (including tax). The flat rate varies depending on your province and business type — service businesses and goods-based businesses use different rates.
The Quick Method can reduce your administrative burden significantly and, for many small service businesses, result in lower net remittances than the regular method. The election is made annually and must be filed with CRA — typically by the first day of the reporting period in which you want the election to apply. Once elected, you must use the Quick Method for the entire year.
Annual filers who already use the Quick Method still apply the same instalment rules: if your prior year net tax (calculated under Quick Method) was $3,000 or more, quarterly instalments are required.
If your business grows and your annual taxable supplies cross the $1.5 million threshold, CRA will require you to switch to quarterly or monthly filing. You can also voluntarily request a change — some businesses prefer more frequent filing for cash flow management or to recover ITCs faster.
Changes to your reporting period take effect at the start of your next fiscal year. Submitting the request well before your year-end ensures a smooth transition. To change your reporting period, you can submit a request through CRA My Business Account or in writing to your tax centre.
CRA takes filing and payment deadlines seriously. The late-filing penalty for GST/HST returns is calculated as:
On top of the penalty, CRA charges compound daily interest on any unpaid balance from the due date. For missed or short-paid instalments, instalment interest is assessed at the prescribed rate, which is adjusted quarterly. One helpful rule: if you overpay in one quarter, the credit can offset the interest owing on an underpayment in another quarter within the same year — but you must apply for this relief.
Repeated late filing can also result in increased penalties for subsequent failures. Staying current is always more cost-effective than catching up later.
CRA offers several ways to file your GST/HST return:
Regardless of the method, always retain your working papers showing how you calculated your net tax, claimed ITCs, and determined instalments. CRA can audit GST/HST returns up to four years after the filing date — keeping organised records protects you in the event of a review.
At Swift Accounting Calgary, we help small businesses and sole proprietors stay on top of their GST/HST obligations year-round, from setting up correct reporting periods to calculating instalments and filing on time. If you are unsure whether your business qualifies for annual filing or whether the Quick Method makes sense for your situation, our team can walk you through it.
If your annual taxable supplies exceed $1.5 million during a fiscal year, CRA will reassign your reporting period for the following year — either to quarterly (up to $6 million) or monthly (over $6 million). You are not required to switch mid-year. However, once your revenues cross the threshold, you must notify CRA, and they will update your file effective the start of your next fiscal year. Continuing to file annually after you are required to file quarterly or monthly can result in late-filing penalties.
Yes. Instalments are based on the prior year's net tax, not a projection of the current year. If your prior year net tax was $3,000 or more, you must make the quarterly instalment payments regardless of how the current year is trending. If you ultimately owe less than anticipated, you will receive a refund or credit when you file your annual return. You cannot reduce instalment amounts in advance based on an expected decrease — though an accountant can help you document a lower instalment base if your prior year included unusual one-time revenues.
Yes, and this is one of the most commonly misunderstood rules for self-employed GST/HST filers. CRA extends the filing deadline to June 15 to match the T1 personal return, but the payment deadline remains April 30. If you file on June 1 and pay on June 1, you will owe compound daily interest on the balance from May 1 through June 1, even though no late-filing penalty applies. The practical advice: calculate what you owe and pay it by April 30, even if you have not yet completed and submitted the return.
CRA does allow you to offset instalment interest using overpayment credits from another quarter in the same year. If you overpaid in Q1 and underpaid in Q2, you can request that CRA apply the credit to reduce or eliminate the Q2 interest. This relief is not automatic — you need to make the request, typically when filing your annual return or through My Business Account. Swift Accounting recommends reviewing your instalment position each quarter so any gaps can be corrected before they compound. If you are already behind, speaking with a CRA business enquiries agent or an accountant early gives you the best chance of minimising the damage.
Questions about your GST/HST filing status, instalments, or compliance? Contact Swift Accounting — we make sure Calgary businesses never miss a deadline or overpay a dollar.
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