The Quick Method is a simplified way for small businesses to calculate and remit GST/HST. Instead of tracking every GST/HST paid or received, you use a fixed percentage of your taxable supplies to determine your net tax. This method reduces paperwork and makes it easier to calculate GST/HST remittances and file GST/HST returns because it eliminates the need to report the actual GST/HST paid or payable on most purchases.
When you use the quick method, you still charge the GST at 5% or the HST at the applicable rate on your supplies of taxable property and services (other than zero-rated supplies), but you remit only a portion of that tax. The net tax you have to remit is calculated using the applicable quick method remittance rates.
The fixed percentages used in the Quick Method can sometimes result in lower overall tax payments. This is because the method assumes a standard proportion of tax paid on inputs, which might be higher than your actual expenses. Depending on your business operations, this could lead to significant tax savings.
However, not every small business can use the Quick Method. Generally, it’s available to businesses with annual taxable supplies of $400,000 or less, excluding certain categories like financial services or real estate sales. If you meet these criteria, you might be able to take advantage of this simplified filing method.
If you meet the eligibility criteria, you need to make an election and register for the Quick Method with the Canada Revenue Agency (CRA). This involves completing a simple form and providing some basic information about your business.
If you’re considering whether the Quick Method is right for your business, please Contact Us. Our experienced accountant can help you determine if it's the right choice and offer GST/HST filing service.