If you’re not familiar with the system, calculating sales tax in Canada can be complicated. Some provinces have two separate taxes, while others have just one harmonized sales tax. Then, to make matters more complicated, not everything you buy is taxed, and some items have taxes pre-factored into the price.
Keep reading to learn more about how to calculate sales tax in Canada.
How much is sales tax in Canada?
Sales taxes in Canada can be tricky since they depend on the province or territory where the sale takes place or the destination of an online purchase. A 5% sales tax, referred to as the Goods and Service Tax (GST), is applied to almost all transactions made in Canada.
In addition to the 5% GST, most provinces have their own provincial tax. This provincial sales tax is referred to as the PST or the QST in Quebec. For the sake of simplicity, some provinces use a harmonized sales tax rate (HST) instead, which combines the GST and the province’s respective sales tax.
Certain provinces and territories, such as Alberta, Northwest Territories, Nunavut, and Yukon, do not have a provincial sales tax.
Here is a table that shows you the sales tax of every province and territory in Canada, as of January 2023:
| Province | GST/HST | PST/QST | Total |
|---|---|---|---|
| Alberta | 5% GST | – | 5% |
| British Columbia | 5% GST | 7% PST | 12% |
| Prince Edward Island | 15% HST | – | 15% |
| Manitoba | 5% GST | 7% PST | 12% |
| New Brunswick | 15% HST | – | 15% |
| Nova Scotia | 15% HST | – | 15% |
| Nunavut | 5% GST | – | 5% |
| Ontario | 13% HST | – | 13% |
| Quebec | 5% GST | 9.975% QST | 14.975% |
| Saskatchewan | 5% GST | 6% PST | 11% |
| Newfoundland and Labrador | 15% HST | – | 15% |
| Northwest Territories | 5% GST | – | 5% |
| Yukon | 5% GST | – | 5% |
Source: Sales tax rates for 2023 were obtained from the government of Canada’s official website.
Which products are not taxed in Canada?
Certain product categories are exempt from sales tax in Canada. The first zero-rate category is referred to as basic groceries. Basic groceries consist of non-processed or essential foods. These include bread and breakfast cereals, vegetables (fresh, canned, frozen, or vacuum sealed), most dairy products, eggs, coffee beans, fruits, and fresh meat, poultry, and fish.
The next zero-rate product category in Canada is feminine hygiene products. Since July 1, 2015, the government of Canada also stopped charging GST on feminine hygiene products including tampons, pads, and menstrual cups. Canadian provinces followed suit, and also no longer charge provincial tax on feminine hygiene products.
How are taxes charged for online purchases?
Online shopping has made it easy to purchase from stores Canada-wide. However, online shoppers often wonder if they should be charged their own province’s sales tax or the sales tax of where the online store is located.
As a rule of thumb, if you’re purchasing an item online, the sales tax rate applied to your purchase should be based on the shipping destination. It has nothing to do with where you live or where the online store has its roots, but more so with where the item will be shipped.
Therefore, if you live in Quebec and are buying an item from Manitoba that will be shipped to a friend in Ontario, you should be charged Ontario’s HST rate of 13%.
If you live in Quebec and are buying an item from Manitoba that will be shipped to your home in Quebec, you should be charged Quebec’s 9.975% QST in addition to Canada’s 5% GST.
How to calculate sales tax in Canadian provinces?
If you’re not sure how to calculate sales tax on a purchase in a certain province, the Government of Canada has created a sales tax calculator tool. The tool allows you to easily calculate the sales tax in any province based on the subtotal of your purchase.
Using the sales tax calculator, here is an example of the sales tax applicable on a $100 purchase in Quebec:
