GST/HST Calculator for Ontario: How to Calculate 13% HST Correctly

Table of Contents

1. 1. [Introduction](#introduction)
2. 2. [Understanding Ontario's HST Rate](#understanding-ontarios-hst-rate)
3. 3. [How to Add HST to a Pre-Tax Amount](#how-to-add-hst-to-a-pre-tax-amount)
4. 4. [How to Remove HST from a Total](#how-to-remove-hst-from-a-total)
5. 5. [GST vs. PST vs. HST: What Is the Difference?](#gst-vs-pst-vs-hst-what-is-the-difference)
6. 6. [HST Exemptions in Ontario](#hst-exemptions-in-ontario)
7. 7. [Input Tax Credits for Businesses](#input-tax-credits-for-businesses)
8. 8. [Zero-Rated vs. Exempt Supplies](#zero-rated-vs-exempt-supplies)
9. 9. [Business Registration for HST](#business-registration-for-hst)
10. 10. [Practical Examples](#practical-examples)
11. 11. [FAQs](#faqs)
12. 12. [Related Calculators](#related-calculators)
13. 13. [Conclusion](#conclusion)

Introduction

Ontario's Harmonized Sales Tax (HST) combines the federal Goods and Services Tax (GST) with the provincial Provincial Sales Tax (PST) into a single, streamlined tax. At 13%, it affects nearly every purchase and sale in the province, making it essential for consumers, business owners, and entrepreneurs to understand exactly how it works.

Our GST/HST Calculator for Ontario makes it simple to add or remove HST, see the full GST and PST breakdown, and ensure your calculations are always accurate. Whether you are pricing products, preparing invoices, or handling your business books, this guide covers everything you need to know.

Understanding Ontario's HST Rate

Ontario's HST rate of 13% is a blended tax composed of two components:

• Federal portion (GST): 5%
• Provincial portion (PST): 8%
• Total HST: 13%

The HST was introduced in Ontario on July 1, 2010, replacing the separate 5% GST and 8% PST system. The Canada Revenue Agency (CRA) administers the HST on behalf of the Ontario government, making compliance simpler for businesses that operate in multiple provinces.

How the HST Rate Compares Across Canada

| Province | GST | PST | Total HST/Sales Tax |

|----------|-----|-----|---------------------|

| Ontario | 5% | 8% | 13% HST |

| Quebec | 5% | 9.975% | 14.975% |

| British Columbia | 5% | 7% | 12% |

| Alberta | 5% | 0% | 5% (no PST) |

| Saskatchewan | 5% | 6% | 11% |

| Manitoba | 5% | 7% | 12% |

| Nova Scotia | 5% | 10% | 15% HST |

| PEI | 5% | 10% | 15% HST |

| Newfoundland | 5% | 10% | 15% HST |

| New Brunswick | 5% | 10% | 15% HST |

How to Add HST to a Pre-Tax Amount

When you have a price that does not include tax and need to calculate the total with HST, use this formula:

Total with HST = Pre-tax Amount x (1 + 0.13) Total with HST = Pre-tax Amount x 1.13 GST Portion = Pre-tax Amount x 0.05 PST Portion = Pre-tax Amount x 0.08 Total HST = Pre-tax Amount x 0.13

Example: Adding HST

A service costs $1,000 before tax:

• GST (5%): $1,000 x 0.05 = $50
• PST (8%): $1,000 x 0.08 = $80
• Total HST (13%): $1,000 x 0.13 = $130
• Total with HST: $1,000 x 1.13 = $1,130

How to Remove HST from a Total

When you have a total amount that already includes HST and need to find the pre-tax amount:

Pre-tax Amount = Total including HST / 1.13 HST Amount = Total - Pre-tax Amount GST = Pre-tax Amount x 0.05 PST = Pre-tax Amount x 0.08

Example: Removing HST

An item costs $1,130 including HST:

• Pre-tax Amount: $1,130 / 1.13 = $1,000
• Total HST: $1,130 - $1,000 = $130
• GST: $1,000 x 0.05 = $50
• PST: $1,000 x 0.08 = $80

This is especially useful for expense tracking, input tax credit calculations, and understanding the true cost of purchases.

GST vs. PST vs. HST: What Is the Difference?

Before the HST, Ontario businesses had to collect and remit two separate taxes:

• GST (Goods and Services Tax): A 5% federal tax applied to most goods and services across Canada. Businesses could claim Input Tax Credits to recover GST paid on expenses.
• PST (Provincial Sales Tax): An 8% provincial tax that was applied at the retail level. Unlike the GST, businesses generally could not recover PST paid on their inputs, meaning PST was embedded in their cost structure.

Advantages of the HST System

1. 1. Simplified compliance: One tax return instead of two
2. 2. Lower business costs: Businesses can claim ITCs for the full 13%, reducing embedded tax
3. 3. Transparency for consumers: A single rate makes pricing clearer
4. 4. Economic efficiency: Eliminates the cascading tax effect under the old PST system

HST Exemptions in Ontario

Not all goods and services are subject to HST. Understanding what is exempt versus what is taxable is essential for correct billing.

Exempt Supplies (No HST Charged)

Exempt supplies are not subject to HST. If you sell only exempt supplies, you generally do not need to register for or collect HST:

• Basic groceries: Meat, vegetables, dairy, eggs, cereal, bread (but not restaurant meals or prepared foods)
• Child care services: Licensed daycare and nursery schools
• Prescription drugs: Medications prescribed by a doctor
• Medical devices: Hearing aids, artificial teeth, wheelchairs, prescription glasses
• Educational services: Tuition for academic courses leading to a diploma, degree, or certificate
• Residential rent: Long-term residential rental accommodation (more than one month)
• Financial services: Most banking, insurance, and investment services
• Health care services: Services provided by doctors, dentists, and other licensed health professionals

How Exempt Supplies Affect Your Business

If you make both taxable and exempt supplies, you can only claim ITCs for HST paid on expenses attributable to your taxable supplies. This is known as partial ITC entitlement.

Input Tax Credits for Businesses

Input Tax Credits (ITCs) allow registered businesses to recover the HST they pay on business-related expenses. This means the business effectively pays HST only on the value it adds, not on its total revenue.

What Expenses Qualify for ITCs?

• Inventory and raw materials purchased for resale or manufacturing
• Equipment, machinery, and tools
• Rent for business premises
• Utilities (electricity, gas, internet)
• Professional services (legal, accounting, consulting)
• Advertising and marketing
• Office supplies and software
• Vehicle expenses used for business (partial)

What Does NOT Qualify?

• Personal or non-business expenses
• Meals and entertainment (50% recovery)
• Club memberships
• Property acquired for personal use
• Expenses related to exempt supplies

How to Claim ITCs

1. 1. Ensure you are registered for the HST/GST
2. 2. Keep all receipts and invoices showing HST paid
3. 3. Report ITCs on your HST return (Form GST34)
4. 4. File returns quarterly, annually, or monthly depending on your revenue

Zero-Rated vs. Exempt Supplies

It is important to distinguish between zero-rated and exempt supplies:

| Feature | Zero-Rated | Exempt |

|---------|------------|--------|

| HST rate | 0% | N/A (not taxed) |

| Can claim ITCs | Yes | No |

| Examples | Basic groceries, prescription drugs, exports | Child care, residential rent, health care |

Zero-rated supplies are taxable at 0%, meaning businesses still register for HST and can claim ITCs, but they do not charge HST to customers. This benefits exporters and producers of basic goods. Exempt supplies are not subject to HST at all. Businesses selling only exempt supplies do not register for HST and cannot claim ITCs.

Business Registration for HST

Do You Need to Register?

You must register for a GST/HST account if:

• Your total taxable revenue (including zero-rated) exceeds $30,000 in any single calendar quarter or over four consecutive calendar quarters
• You sell taxable supplies (including zero-rated) in Canada

Voluntary Registration

Even if your revenue is below $30,000, you may voluntarily register to claim ITCs. This is often beneficial for:

• Startups with significant startup expenses
• Exporters who want to recover HST on inputs
• Businesses selling primarily to other registered businesses

How to Register

1. 1. Visit the CRA's Business Registration Online (BRO) portal
2. 2. Provide your business information, including business number
3. 3. Select your reporting period (annual, quarterly, or monthly)
4. 4. Choose your filing method (online or paper)

Practical Examples

Example 1: Small Business Pricing

A web design agency charges $2,000 for a website. As a registered business, they must add HST:

• Pre-tax: $2,000
• GST (5%): $100
• PST (8%): $160
• Total HST (13%): $260
• Invoice Total: $2,260

The agency can later claim ITCs on its software subscriptions, equipment, and other expenses.

Example 2: Consumer Purchase

A consumer buys furniture for $1,500 plus HST:

• Pre-tax: $1,500
• HST (13%): $195
• Total Paid: $1,695

Since the consumer is not registered for HST, they cannot recover the tax.

Example 3: Removing HST for Expense Tracking

A business owner paid $565 including HST for office supplies:

• Pre-tax: $565 / 1.13 = $500
• HST embedded: $65
• ITC claimable: $65

The true expense (excluding recoverable tax) is $500.

Example 4: Exporter Advantage

A software company exports $100,000 worth of services to the US. Their services are zero-rated:

• No HST charged to the US customer
• Company can claim ITCs on all expenses
• If they paid $13,000 HST on expenses, they get it all back

FAQs

What is the Ontario HST rate?

Ontario's HST rate is 13%, consisting of 5% federal GST and 8% provincial PST. It is a single blended tax administered by the Canada Revenue Agency.

How do you calculate HST from a pre-tax amount?

Multiply the pre-tax amount by 13% (0.13). For example, $100 x 0.13 = $13 HST, making the total $113. To see the breakdown: GST is 5% ($5) and PST is 8% ($8).

How do you remove HST from a total?

Divide the total by 1.13 to get the pre-tax amount. For example, $113 / 1.13 = $100 pre-tax, and the HST is $13 ($113 - $100). GST is $5 and PST is $8.

What items are exempt from HST in Ontario?

Basic groceries, child care services, prescription drugs, medical devices, educational services, long-term residential rent, most health care services, and most financial services are exempt.

Do businesses charge HST on everything?

No. Most goods and services are subject to HST, but some are zero-rated (taxable at 0%) such as basic groceries and exports, and some are exempt such as health and educational services.

Can businesses claim Input Tax Credits for HST?

Yes, registered businesses can claim ITCs to recover HST paid on business expenses. This means the business effectively pays HST only on the value they add, not their total revenue.

Is the HST rate the same across all Canadian provinces?

No. Some provinces use HST (Ontario 13%, Nova Scotia 15%, etc.), others use separate GST + PST (BC 12%, Saskatchewan 11%), and Alberta has only 5% GST with no provincial sales tax.

When do I need to register for HST in Ontario?

You must register when your total taxable revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters. You can also voluntarily register to claim ITCs even below this threshold.

Related Calculators

• GST/HST Calculator Ontario -- Add or remove 13% HST and see the full GST and PST breakdown.
• Tax Calculator -- Estimate your overall tax obligations including HST, income tax, and more.
• Salary Calculator -- Calculate your take-home pay and understand payroll deductions.
• Percentage Calculator -- Quickly calculate percentages for discounts, markups, and tax adjustments.

Conclusion

Understanding Ontario's HST is essential for both consumers and business owners. Whether you are calculating the final price of a purchase, preparing invoices for clients, claiming Input Tax Credits, or managing your business compliance, knowing the difference between adding and removing HST is critical.

Our GST/HST Calculator for Ontario eliminates guesswork by providing instant, accurate calculations with a full breakdown of the GST and PST components. Use it alongside our other financial tools to keep your business finances accurate and compliant.

Start calculating HST correctly today and ensure your pricing, invoicing, and tax reporting are always on point.