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Filing GST/HST in QuickBooks Online For Canadians (A Quick How-To Guide)


Filing GST/HST gets a lot easier when QuickBooks Online (QBO) is set up properly from day one. In this guide, lets walk through:

  • when a business needs to register (and when they don’t),

  • why someone might register early,

  • what the GST/HST Payable and GST/HST Suspense accounts are (and how to use them),

  • how to prepare a return in QBO, and

  • how to actually file with the CRA (plus how to record it cleanly in QBO).

Quick note: This is educational info, not tax advice. GST/HST rules can vary depending on what you sell (taxable vs. zero-rated vs. exempt), your province, and your situation.

1) Do you have to register for GST/HST?


A business generally isn’t required to register until it is no longer a “small supplier.” The CRA’s small supplier threshold is $30,000 (before expenses) of worldwide taxable supplies (sales) and is measured using any 4 consecutive calendar quarters (not “calendar year”).

Two common ways you can lose small supplier status:

  1. You exceed $30,000 in a single calendar quarter, or

  2. You exceed $30,000 over the last four consecutive calendar quarters. 

Example (your July-to-July scenario):If your client hits $30,000 in taxable sales between July 2021 and July 2022, that’s within four consecutive quarters, so they’re no longer a small supplier and need to register.


Timing matters: In some cases, the CRA expects you to register within 29 days of your effective registration date, and you may need to start charging GST/HST on the sale that pushed you over the threshold (depending on how you exceeded it).


2) Why register early (voluntarily)?


A business can register voluntarily before hitting $30,000. One big reason: Input Tax Credits (ITCs).


What are ITCs?

ITCs are the GST/HST you pay on business-related purchases and expenses (when they relate to commercial activities). You can generally claim those ITCs against the GST/HST you collected from customers, which reduces what you owe to the CRA. Canada


The meals & entertainment “50% rule” (ITCs too)

Most businesses can only claim 50% of meals and entertainment for income tax purposes—and the CRA also limits the related ITCs. In many cases, you can claim 50% of the GST/HST paid on eligible meals and entertainment expenses as ITCs. Canada+1


3) Set up GST/HST properly in QBO (the part that saves your sanity)


In QBO (Canada), GST/HST is managed under the Taxes section (Sales tax centre). The key is to ensure:

  • the right tax agency is set (often CRA),

  • the right rates are used (GST vs. HST, and any provincial specifics),

  • and you have the right special codes for edge cases (like 50% meals ITCs).


Create a unique sales tax code for 50% meals & entertainment ITCs

Because QBO doesn’t “know” CRA’s ITC limitations automatically, bookkeepers often create a custom tax rate/group so meals calculate the recoverable ITC correctly (ex: GST 2.5% instead of 5%, or HST 6.5% instead of 13%, depending on province). Intuit has a step-by-step guide for setting up the meals & entertainment rate group in QBO. QuickBooks


4) The two QBO accounts everyone asks about: GST/HST Payable vs. GST/HST Suspense


When you turn on sales tax, QBO automatically creates two key liability accounts:


✅ GST/HST Payable (what your day-to-day transactions build)

This account is where QBO tracks GST/HST from your sales and expenses as you code transactions with sales tax. Think of it as the “running tally” account.


✅ GST/HST Suspense (the “clearing” account for filing + payments)

QBO uses GST/HST Suspense as a clearing account during filing/payment. When you prepare/file a return, QBO typically moves the net amount owing (or refundable) from GST/HST Payable to GST/HST Suspense until you record the actual payment/refund.


Why this is helpful: It keeps your day-to-day tax activity (Payable) separate from the “this return is now locked in and awaiting payment” amount (Suspense). Many bookkeepers will look at it like:

Amount owing ≈ GST/HST Payable – GST/HST Suspense (if suspense contains installments/payments already made).

How to use Suspense for installment payments

If your client makes GST/HST installment payments during the year, those are often posted to the GST/HST Suspense account so they reduce what’s left to pay when the return is prepared.


5) How to prepare a GST/HST return in QBO


Before you touch the return:

  • Make sure bank/credit cards are reconciled (or at least up to date).

  • Confirm transactions in the filing period are coded with the correct tax codes.

  • Watch for uncategorized items or “No tax” applied where tax should be.


Typical QBO workflow:

  1. Go to Taxes (Sales tax).

  2. Find the filing period and choose Prepare return.

  3. Review the summary:

    • GST/HST collected on sales

    • ITCs on purchases/expenses

    • Any adjustments (if applicable)

  4. Save/finish the return steps inside QBO.


Even if you “finish” inside QBO, remember: that’s the bookkeeping side of the return. The CRA submission is separate (next section).


6) How to file with the CRA (QBO vs. CRA: what’s the difference?)


Here’s the clean way to think about it:

  • QBO helps you calculate and document the return (and keep your books clean).

  • The CRA is where you actually submit (file) the GST/HST return.


Common CRA filing options

You can file through:

  • CRA My Business Account (often easiest; access code may be bypassed), or

  • GST/HST NETFILE (often needs your 4-digit access code found on CRA forms like GST34), or

  • Represent a Client (for authorized accountants/bookkeepers). QuickBooks


There’s also GST/HST Internet File Transfer, where approved third-party software can upload an electronic return to the CRA. Canada


7) Recording the payment (or refund) in QBO


After you’ve filed with the CRA:

  • record the payment in QBO so your GST/HST Suspense clears out properly,

  • and the bank transaction matches cleanly.


If the business pays the CRA directly (online banking, PAD, etc.), you’ll want that payment recorded so you don’t end up with a lingering suspense balance. The key is consistency: don’t bypass the sales tax workflow unless you have a specific reason—otherwise returns can get messy fast.


8) Common “gotchas” (aka: where GST returns go sideways)


  • Editing old transactions after a return is filed (can cause unexpected differences on the next return).

  • Using the wrong tax code (especially if the customer is in a different province, or sales are zero-rated/exempt).

  • Meals & entertainment coded with the full GST/HST code instead of a 50% ITC code/group.

  • Installment payments posted somewhere random instead of GST/HST Suspense (then your “amount owing” looks wrong).


Quick checklist for a smooth GST/HST filing (monthly/quarterly/annual)


  1. Books up to date (bank + credit cards as current as possible)

  2. Correct tax codes on sales and expenses

  3. Meals & entertainment using a 50% ITC tax setup

  4. Prepare return in QBO Taxes

  5. File with CRA (My Business Account / NETFILE / Represent a Client)

  6. Record the payment/refund so Suspense clears


GST/HST filing doesn’t have to feel overwhelming. If you want a second set of eyes (or someone to handle it start-to-finish), we’ve got you. While we don’t offer year-end income tax filing, we do provide GST/HST remittance preparation and filing support inside QBO—so things stay clean, accurate, and calm. Reach out today and we’ll take it from there. ✨


 
 
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