We’ll tell you what to pay, and when to pay it.
From bookkeeping and accounting to GST and taxes, there’s an endless amount of paperwork to take care of. Supporting small business owners in Alberta, we’re here to take care of all the admin work for you – and do it in a simple and affordable way. With our tax services, we file your GST return and T Slips – and do it on time so that you avoid penalties.
Goods and Services Tax
GST applies to most supplies of goods and services in Canada at a rate of 5%. This 5% that you collect should not be considered your company’s revenues. The government just makes you collect the GST, and then you are required to send that money back to them. We suggest keeping this money in a separate savings account so you’re not tempted to spend it during the year and then get caught with a large GST bill that you can’t afford. If you exceed $30,000 sales in the year, then you’re required to register for GST. After you’re registered, you begin to track the GST collected on your sales/revenue, and the GST paid on your expenses. The net of this amount is either payable or refundable upon filing your GST returns each period.
Determining what you owe
The net of what is collected and what is paid, must be remitted once your GST period has ended. For example, if you have $100 in sales, you would receive $105 as $5 represents the GST collected. There’s another way to determine GST called the Quick Method where you still collect GST at a rate of 5% but you do not have to keep track of your GST inputs that you pay on expenses/purchases. Instead, you remit GST at a rate lower than 5% (based on several factors) which can be easier to calculate and possibly save you GST dollars. To qualify for the GST quick method, your revenues must be less than $400,000 and you must qualify based on the type of business you operate.
Filing and paying GST
You can file your GST returns online, at a participating financial institution, or by mailing your GST return to the address on the form. We can prepare your GST returns and file them online to ensure you never miss a deadline. If you’re an annual filer and had $3,000 or more in net tax owing on your return, you’ll be required to file quarterly in the following fiscal year. If you have over $6,000,000 in annual sales, you’re required to file GST monthly. For annual GST filers, the payment and filing deadline is 3 months after your GST period year end. For quarterly and monthly GST filers, the payment and filing deadline is 1 month after the GST period end.
Other important things to know about GST
The CRA can do a GST audit on your business. They have the right to examine any records and are selected based on an assessment of risk of non-compliance, meaning when errors occur or something unusual happens. It can be done remotely, but can include a CRA agent visiting your business in order to review supporting records for a GST return/claim. Another important thing to note is GST and sub-contractors. If your sub-contractors are registered for GST and include their GST Number and charge GST on their invoices, then you must pay them GST. You do get this GST back though as it a GST credit for you or your corporation.