The GST/HST Quick Method
What it is worth to an incorporated Ontario contractor, and the deadline that quietly closes the door on it.
General information, not tax advice. Rates and rules differ by province and change over time, and none of this is a substitute for advice about your own situation. Quebec's QST operates under its own regime and is not covered here.
Figures on this page were checked against CRA and the Ontario Ministry of Finance on 24 August 2026. Tax rates move, and this one did: Ontario changed its small business rate on 1 July 2026. If you are reading this long after that date, treat the numbers as a worked illustration and confirm the current rates.
The GST/HST Quick Method
If you are incorporated, billing under $400,000 a year, and your business expenses are mostly your own time, there is a good chance you are handing CRA a few thousand dollars a year that you did not have to.
It is not a loophole. It is a CRA programme called the Quick Method, it takes one form to elect, and most contractors who qualify have never had it mentioned to them.
The normal way, and why it suits a business you do not have
Under the regular method you charge your client 13% HST, you claim back the HST you paid on your own purchases as input tax credits, and you send CRA the difference.
That arrangement is built for a business with real costs. A shop buying inventory, a trade buying materials, a firm with premises and equipment. They pay a lot of HST, they claim a lot back, and the regular method is worth using.
A one-person consulting corporation is not that business. You bill for your time. Your expenses might be a laptop, a phone plan, some software, an accountant, and a home office. You collect a great deal of HST and you have very little to claim back against it.
What the Quick Method actually does
You still charge your client 13%. Nothing about your invoice changes, and your client will never know or care.
What changes is what you send CRA. Instead of remitting the HST you collected less your credits, you remit a flat percentage of your total revenue including the HST you charged. In Ontario, for a service business, that rate is 8.8%. You also get a 1% credit on the first $30,000 of that revenue each fiscal year.
The trade-off: you stop claiming input tax credits on your day-to-day expenses. You keep them on capital purchases such as a computer or equipment. The phone bill and the software subscriptions no longer come back to you.
The worked example
An Ontario IT consultant, incorporated, billing $150,000 a year.
| What you collect | |
|---|---|
| Billings | $150,000 |
| HST charged at 13% | $19,500 |
| Total collected | $169,500 |
Say you have around $8,000 a year of HST-bearing expenses: software, phone, professional fees and a bit of travel. That is roughly $1,040 of input tax credits.
| Regular method | |
|---|---|
| HST collected | $19,500 |
| Less input tax credits | −$1,040 |
| Remit to CRA | $18,460 |
| Quick Method | |
|---|---|
| 8.8% of $169,500 | $14,916 |
| Less 1% credit on first $30,000 | −$300 |
| Remit to CRA | $14,616 |
The difference: $3,844. That is money that stays in the corporation, on the same billings, with the same clients, for the cost of filing one form.
The part almost nobody explains
That $3,844 is not $3,844 in your pocket, and any article that stops at the previous line is doing you a disservice.
The gap between the HST you collected and the smaller amount you remitted counts as income to your corporation. So you pay corporate tax on it. At Ontario's combined small-business rate of 11.2%, that is about $431.
Net benefit: roughly $3,413. Still worth having, still worth several thousand dollars a year for doing nothing differently. But it is $3,413, not $3,844, and you should know which number you are working with before you plan around it.
That rate changed on 1 July 2026. Ontario cut its small business rate from 3.2% to 2.2%, taking the combined rate from 12.2% to 11.2% on active business income, up to the first $500,000, for a qualifying CCPC. If your fiscal year straddles 1 July 2026 you use a blended rate somewhere between the two, so your own figure lands slightly differently again. Check your own situation.
Who cannot use it
The Quick Method is closed to a specific list of businesses, and the exclusions catch people who assume they qualify:
- Accountants and bookkeepers
- Financial consultants
- Lawyers and notaries
- Actuaries
- Listed financial institutions
- Charities, and certain non-profits, municipalities, universities, schools and hospitals
"Financial consultant" is the one that surprises people. If your consulting work is financial in nature rather than technical or operational, check carefully before electing. An IT consultant, project manager, business analyst or developer is generally fine.
You also need annual taxable supplies of $400,000 or less including GST/HST, measured across your associated businesses, in the current or previous fiscal year.
If you have just incorporated, read this part first
Nobody puts you on the Quick Method. You are on the regular method from the moment you register, by default, and you stay there until you personally elect out of it.
There is no prompt, no letter, and no question about it anywhere in the registration process. A brand-new corporation that would save several thousand dollars a year simply never finds out, and the first year is the one where it is easiest to miss, because you are busy, the HST account is new, and nothing about the default looks like a decision anyone made.
The election takes effect from the beginning of a reporting period and cannot be backdated into one already under way. So the moment to act is at the start of a period, not whenever you get around to it. If you have incorporated recently and have not made this election, check your own filing frequency against the deadlines below today.
The deadline, which is the part that actually costs people money
You elect using form GST74. It is short. But the timing is not flexible, and this is where the opportunity quietly disappears:
- If you file annually, you must elect by the first day of your second fiscal quarter, so roughly three months into your fiscal year.
- If you file monthly or quarterly, you must elect by the due date of the return for the period the election takes effect.
Miss it, and you are on the regular method for that entire year. Not a penalty, not a fine. Just several thousand dollars you were entitled to and did not claim, and no way to go back for it. Once elected, you must stay on the Quick Method for at least a year.
This is the shape of almost every tax opportunity a small corporation has. Nothing goes wrong. Nothing gets flagged. A date passes, and money that was yours stops being available. Nobody writes to tell you.
Should you do it?
The rough test: if your HST-bearing business expenses are small relative to your billings, the Quick Method probably wins. The more real costs you carry, the more the regular method's input tax credits are worth, and at some point they overtake it.
Run both numbers on your own figures before electing. If your expenses are unusual, or you are near the $400,000 threshold, or you are unsure whether the "financial consultant" exclusion catches you, that is a conversation worth having with an accountant.
Rates and thresholds differ outside Ontario. CRA publishes the rate for every province.
Related: what a one-person corporation actually owes, and when, and salary or dividends.
The Quick Method is one deadline. There is also the corporate tax instalment threshold, your T2 filing and payment dates, payroll remittances if you take a salary, and the annual decision about salary versus dividends. Each one is a date, and each one is quiet when it passes.
ContractorBooksAI is built for incorporated Canadian contractors dealing with exactly that calendar: corporate books, HST, T2 figures, and a safe-to-spend number so you know what is actually yours to take.
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