GST/HST Quick Method in BC: Eligibility, Rates, and When It Saves Money
The GST/HST Quick Method is a simplified accounting option for small businesses in British Columbia that can reduce your GST remittances and simplify bookkeeping. Instead of tracking every Input Tax Credit (ITC), you remit a percentage of your sales. This guide explains who qualifies, how it works, and when it saves money versus the regular method.
What Is the Quick Method?
The Quick Method simplifies GST/HST reporting by allowing eligible businesses to remit a fixed percentage of their sales instead of calculating GST collected minus ITCs. You still charge GST/HST at the regular rate (5% GST in BC), but you remit less—typically 1.8% to 3.6% of sales depending on your business type. This can result in significant savings for service-based businesses with low expenses.
Who Qualifies for the Quick Method in BC
To use the Quick Method, your business must meet specific eligibility criteria. Understanding these requirements is crucial before opting in:
Revenue Threshold
Annual taxable sales: $400,000 or less (including GST/HST) in the previous fiscal year. This threshold applies to your worldwide sales, not just BC sales.
Business Type
Most businesses qualify, but certain professions are excluded (see below). Service businesses, retailers, and contractors typically qualify if they meet the revenue threshold.
GST Registration
You must be registered for GST/HST. The Quick Method is not available to businesses that are not required to register (under $30,000 annual revenue).
Who Is Excluded from the Quick Method
Certain businesses and professions cannot use the Quick Method, regardless of revenue. These exclusions exist because these businesses typically have high ITCs that make the regular method more beneficial:
Financial Services
Banks, credit unions, insurance companies, investment advisors, and other financial service providers.
Real Estate Agents
Real estate agents, brokers, and property managers are excluded from using the Quick Method.
Long-Haul Truckers
Businesses primarily engaged in long-haul trucking operations are excluded.
Public Service Bodies
Charities, non-profits, municipalities, and other public service bodies have different rules.
Businesses with High ITCs
If your business typically claims ITCs on more than 40% of GST collected, the regular method is usually better.
How the Quick Method Works vs Regular ITC Claiming
The key difference between the Quick Method and regular GST accounting is how you calculate your remittance:
Quick Method Remittance Rates in BC
The remittance rate depends on your business type and whether you have employees. Here are the current rates for businesses in BC (GST 5%):
Services (No Employees)
Professional services, consulting, freelancing with no employees
Services (With Employees)
Service businesses with employees (salaries over $30,000/year)
Retailers
Retail businesses selling goods (first $400,000 of sales)
Capital Purchases
You can still claim ITCs on capital purchases over $5,000
Example Calculations by Revenue Level
Here are real-world examples showing how the Quick Method compares to the regular method at different revenue levels:
Example 1: Service Business (No Employees)
Annual Sales: $100,000 (GST collected: $5,000)
Annual Expenses: $20,000 (GST paid: $1,000)
Example 2: Service Business (With Employees)
Annual Sales: $200,000 (GST collected: $10,000)
Annual Expenses: $50,000 (GST paid: $2,500)
Example 3: High-Expense Business
Annual Sales: $150,000 (GST collected: $7,500)
Annual Expenses: $100,000 (GST paid: $5,000)
When to Opt In or Out: Timing Considerations
Timing your switch to or from the Quick Method is important. Here’s when you can make changes:
Opting In to Quick Method
Opting Out of Quick Method
Bookkeeping Tips to Avoid CRA Adjustments
Proper bookkeeping is essential when using the Quick Method. Follow these practices to avoid issues during CRA audits:
Decision Checklist: Should You Use the Quick Method?
Use this checklist to determine if the Quick Method is right for your BC business:
Ask Us to Model Your GST Method
Determining whether the Quick Method will save you money requires analyzing your specific revenue, expenses, and ITC patterns. J. Wang Chartered Professional Accountant can model both methods using your actual business numbers to show you exactly how much you’ll save (or lose) with the Quick Method. We’ll also help you understand eligibility, timing, and bookkeeping requirements.
Request a GST Method Analysis
Let’s calculate which GST method will save you the most money
Need more information about GST and HST basics? Schedule an appointment with our Vancouver accounting team today.