Who can use the GST/HST quick method, the Alberta remittance rates, a worked example against the regular method, what you can still claim and how to elect, with every rule linked to the Canada Revenue Agency.
The quick method lets a small business remit a set percentage of its sales, GST/HST included, instead of working out the GST/HST paid on every expense. It is open to most businesses with $400,000 or less a year in taxable sales, GST/HST included. In Alberta the rate is 3.6% for a service business and 1.8% for a business that buys goods to resell, with a 1% credit on the first $30,000 of sales each year. It is usually worth it when you pay little GST/HST on your running costs. Bookkeeping, tax preparation, accounting and legal practices cannot use it.
What Is the Quick Method of Accounting?
The CRA’s Guide RC4058, Quick Method of Accounting for GST/HST describes it as another way for small businesses to calculate their net tax. Under the regular method you add up the GST/HST you charged, subtract the input tax credits (ITCs) for the GST/HST you paid on business purchases, and remit the difference. Under the quick method you skip the ITCs on most purchases. You multiply your sales, including the GST/HST, by a remittance rate and remit that amount.
The remittance rate is lower than the rate you charge, so you keep part of the tax you collect. The CRA says that part stands in for the approximate value of the ITCs you would otherwise have claimed. Whether that is a better deal than the regular method depends on your own numbers, which is what the example below shows.
- Your customers see no change. You still charge 5% GST in Alberta, or the HST rate where HST applies. Only the amount you send to the CRA changes.
- What you keep is income. The CRA’s Guide RC4022 says the part of the tax you do not remit is reported as income on your income tax return.
- Records still matter. You do not report the GST/HST on most purchases, but you still keep all books and records for six years from the end of the year they relate to. See how long to keep business records.
Who Can Use the Quick Method?
Under RC4058, you can elect to use the quick method if all of these are true:
- You have been in business continuously for the 365 days before the reporting period you want to start in. A new registrant can elect if it reasonably expects $400,000 or less of taxable sales in its first full year.
- Your taxable sales are $400,000 or less, GST/HST included and counting your associated businesses, for either the first four or the last four of your last five fiscal quarters. Zero-rated sales count. Sales of real property, capital assets and goodwill, and financial services, do not.
- You have a permanent establishment in Canada.
- You did not revoke a quick method or simplified method election in those 365 days.
- Your type of business is not excluded.
The excluded businesses include persons that provide bookkeeping, financial consulting, tax consulting or tax return preparation services, persons that provide legal, accounting or actuarial services in their professional practice, listed financial institutions, charities, public institutions and non-profit organizations with at least 40% government funding. Charities and qualifying non-profits have a separate special quick method of their own.
The CRA’s own example is a Calgary shoe store: $394,000 of sales in one run of four quarters and $402,000 in the other. Because one of the two totals is not more than $400,000, it can elect.
What Are the Quick Method Rates for an Alberta Business?
The rate depends on what you sell, where your permanent establishment is and where the sale is made. These are the rates in RC4058 for a business whose permanent establishment is in Alberta. Each one is applied to sales including the GST/HST:
| Where you make the sale | Services and most other businesses | Goods bought to resell |
|---|---|---|
| Alberta, or anywhere only the 5% GST applies | 3.6% | 1.8% |
| Ontario (13% HST) | 10.5% | 8.8% |
| Nova Scotia (14% HST) | 11.3% | 9.6% |
| New Brunswick, Newfoundland and Labrador, Prince Edward Island (15% HST) | 12.0% | 10.4% |
Goods bought to resell is for retailers and wholesalers. You can use it only if the goods you bought to resell, or to use in goods you make, cost at least 40% of your taxable sales in the previous fiscal year, GST/HST included in both. The CRA lists grocery and convenience stores, gas stations, boutiques, and art and craft shops as examples. Everyone else uses the services rate. The CRA’s examples include auto repair shops, caterers, delivery services, house cleaning, painting contractors, photographers, small manufacturers, taxi drivers and travel agencies.
Most businesses use only one rate. If 90% or more of your eligible sales in a reporting period are made where only the GST applies, you use the GST rate for all of them.
On top of the rate, you get a credit of 1% on the first $30,000 of eligible sales, GST/HST included, in each fiscal year. Your election has to be in effect at the start of the fiscal year (or on the day you registered, if you are new), and an unused part cannot be carried forward.
Does the Quick Method Save Money? A Worked Example
The quick method amount depends only on your sales. The regular method amount goes down as the GST/HST you pay on your costs goes up. So the question is how much GST/HST you pay on running costs and inventory. This example uses the CRA’s services rate for Alberta; the business and its numbers are made up to show how it works:
It charges 5% GST, so its sales are $105,000 including GST. It files one annual return and its election was in effect for the whole year. Running costs are before GST, and every one of them carries 5% GST.
The quick method wins
- Regular method: $5,000 GST charged, less $1,000 of ITCs, so you remit $4,000
- Quick method: $105,000 x 3.6% = $3,780, less the 1% credit of $300, so you remit $3,480
- You keep $520 more, which is taxable income
The regular method wins
- Regular method: $5,000 GST charged, less $2,500 of ITCs, so you remit $2,500
- Quick method: the same $3,480, because it does not depend on your costs
- The quick method would cost you $980 more
The break-even point. In this example the two methods come out the same when the GST paid on running costs is $1,520 ($5,000 less $3,480), which is about $30,400 of taxable costs a year before GST. Below that, the quick method leaves more in the business. Above it, the regular method does.
What to leave out of your comparison. Equipment, vehicles, computers and buildings do not change the answer, because you can still claim ITCs on them under the quick method (see the next section). Salaries, insurance payments and interest carry no GST/HST (RC4022 lists them), so they do not count as taxable costs either. A business whose main cost is its people often has fewer taxable costs than it thinks.
Income tax. The amount you keep is income, and you claim your costs including the GST you paid. In this example the business’s taxable income goes up by the same $520, so the saving after income tax is smaller than $520.
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What Can You Still Claim Under the Quick Method?
The CRA’s input tax credits page says you cannot claim ITCs for operating expenses under the quick method, because the remittance rate already allows for them. Guide RC4022 names rent, utilities, phone, meals and entertainment, and inventory purchases. Under RC4058 you can still claim ITCs for:
- real property and improvements to it,
- capital assets such as computers, vehicles and equipment, and improvements to them,
- purchases where the GST/HST became payable before your election took effect, if the time limit to claim has not run out, and
- goods an auctioneer or agent sold for you when the auctioneer or agent accounts for the tax.
Some of your own sales also stay outside the quick method calculation. For these you report the tax the regular way, not at the remittance rate:
- zero-rated sales, sales made outside Canada and other sales where the customer does not pay the tax,
- sales of real property and of capital assets,
- sales you make as an agent or auctioneer when you must account for the tax, and
- taxable benefits to employees or shareholders, and goods or services you take for your own or a related person’s use.
Two more rules: you cannot adjust your net tax for bad debts on quick method sales, and a credit or refund you give a customer comes off your eligible sales before you apply the rate.
How and When Do You Elect the Quick Method?
How. Use the File an election service in My Business Account (or Represent a Client, if someone files for you), or fill out Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting.
When. Under RC4058:
- Annual filers elect by the first day of their second fiscal quarter.
- Monthly and quarterly filers elect by the due date of the return for the period they start in.
- A new registrant whose first return covers less than a full fiscal year elects by the due date of that return.
- The start date has to be the first day of a reporting period.
For a business with a December 31 year-end that files annually, the second quarter starts on April 1. The CRA’s filing deadlines page says annual filers usually file and pay 3 months after year-end, and monthly and quarterly filers 1 month after each period. If you are not registered yet, start with when you have to register for GST/HST in Alberta.
How long it lasts. The election stays in effect while your taxable sales stay at $400,000 or less and your business type stays eligible. Once you pass $400,000, RC4058 sets the date you go back to the regular method, which for an annual filer is the start of the next fiscal year. Check at each year-end that you still qualify and that the same rate still fits.
Leaving it. You can revoke only after the election has been in effect for at least a year, by the due date of the last return you want to file under it. You then wait a year before you can elect again, and you cannot go back and claim ITCs on purchases made while you used it, other than ITCs you were entitled to and did not claim.
- Check the $400,000 in both runs of four quarters, GST/HST included, and add your associated businesses.
- Check your business type against the excluded list.
- Check your rate. Do goods bought to resell cost at least 40% of your sales?
- Run your own numbers on last year’s sales and the GST/HST paid on running costs, leaving out capital purchases.
- Check the deadline for the period you want to start in.
Is the Simplified Method for ITCs the Same Thing?
No. The CRA’s Guide RC4022 describes the simplified method for claiming ITCs as a way to work out ITCs under the regular method. You still claim ITCs, but you do not have to show the GST/HST separately in your records: you total your taxable purchases and work out the ITCs from that total. It is open to businesses with $1 million or less of taxable sales in the last fiscal year and $4 million or less of taxable purchases. No form is needed, and once you start you stay with it for at least a year if you still qualify.
In short: the quick method replaces most of your ITCs with a remittance rate. The simplified method keeps your ITCs and makes them easier to add up. RC4022 says a business on the quick method can also use the simplified method for the ITCs it can still claim, such as capital equipment.
How Can We Help With the Quick Method?
GST/HST filing is included in every one of our monthly bookkeeping packages. Because we keep your books, we can run the regular method and the quick method side by side on your real numbers before you elect, file the election on time, and check at each year-end that you still qualify and that your rate still fits. Fees are fixed and quoted up front.
See our bookkeeping service, or, if you want to know whether the quick method would save your business money, see our packages.
Frequently Asked Questions
Do I charge my customers less GST/HST under the quick method?
No. You still charge 5% GST in Alberta, or the HST rate where HST applies. The quick method only changes how much of that tax you send to the CRA.
Can a sole proprietor use the quick method?
Yes, if the business meets the same conditions as any other: taxable sales of $400,000 or less including the GST/HST, a permanent establishment in Canada and a business type that is not excluded, such as bookkeeping, tax preparation, accounting or legal work.
Is the GST/HST I keep under the quick method taxable?
Yes. The CRA says the part of the tax you do not remit under the quick method is reported as income on your income tax return. So the real saving is smaller than the GST/HST you keep.
Can I still claim GST/HST on a new truck or computer?
Yes. Under the quick method you can still claim input tax credits on capital assets such as vehicles, computers and equipment, and on real property. What you cannot claim are input tax credits on operating expenses and inventory.
Can I switch back to the regular method?
Yes, after the election has been in effect for at least one year. You revoke it in My Business Account or on Form GST74 by the due date of the last return you want to file under the quick method, and you then have to wait a year before electing again.
Reviewed on 27 October 2026. Quick method conditions, rates, deadlines and input tax credit rules in this article are from the Canada Revenue Agency, linked beside each fact and listed below. The worked example is an illustration with made-up numbers.
Bookkeeping
Monthly bookkeeping with GST/HST filing included, so the quick method or regular method is worked out on your real numbers
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Corporate tax returns for Canadian corporations, with proactive tax planning and the GST/HST you keep reported correctly
Sources
- Canada Revenue Agency, Guide RC4058, Quick Method of Accounting for GST/HST (page dated 2025-07-21, checked 27 October 2026)
- Canada Revenue Agency, Guide RC4022, General Information for GST/HST Registrants (page dated 2026-01-07, checked 27 October 2026)
- Canada Revenue Agency, Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting (page dated 2025-09-18, checked 27 October 2026)
- Canada Revenue Agency, Input tax credits (page dated 2026-10-14, checked 27 October 2026)
- Canada Revenue Agency, Reporting requirements and deadlines, File your GST/HST return (page dated 2026-05-13, checked 27 October 2026)
