HST Quick Method: Is It Right for Your Trades Business in Ontario?

Most Ontario contractor businesses registered for HST use the regular method: collect HST on sales, then subtract the Input Tax Credits (ITCs) from business purchases, and remit the difference to CRA. It works, but it requires tracking every purchase and the HST paid on it. The HST Quick Method contractor Ontario option is CRA's simplified alternative — instead of tracking ITCs individually, you remit a fixed percentage of the HST you collect and keep the rest. For some trades businesses, this is a meaningful cash advantage. For others, it's not the right fit. Here's how to think through it.

What Is the HST Quick Method?

The Quick Method of accounting for HST is an election you make with CRA that allows eligible small businesses to simplify their HST remittances. Instead of calculating your net tax as HST collected minus ITCs claimed, you simply multiply your total HST-included sales by a fixed remittance rate set by CRA. The difference between what you collected from clients and what you remit stays in your pocket — it's recognized as income.

The idea behind the Quick Method is that CRA pre-calculated an average ITC rate for different business types, baked it into the remittance rate, and let businesses skip the ITC tracking. Simple, but not always better.

Who Can Use the Quick Method?

To elect the Quick Method, your business must meet these conditions:

• Annual taxable sales (including HST) must be under $400,000
• You must have been registered for GST/HST for at least one year before electing
• Your business is not in an excluded category (financial institutions, charities using special rules, and certain other specific exclusions)

Most small trades businesses across Ontario — electricians, plumbers, painters, HVAC techs, and similar service contractors with under $400k in revenue — will be eligible. Once elected, the Quick Method stays in place until you revoke it or exceed the threshold.

How the Quick Method Remittance Rates Work

In Ontario, where the HST rate is 13%, CRA sets the Quick Method remittance rates as follows:

• Service businesses: 8.8% of total HST-included revenue (or approximately 4% of the HST you collect — more on this below)
• Businesses that sell goods: 1.8% of total HST-included revenue for the first $30,000, then 8.8% above that

To understand what these rates actually mean in practice, it's easier to think of it as: you collect 13% HST from your clients, and you remit 8.8% of your total (tax-included) revenue to CRA. Since HST is 13/113 of the tax-included amount, collecting 13% and remitting 8.8% of the gross means you keep roughly 4% of your taxable sales as a cash advantage.

A Real Example: When Quick Method Saves Money

Suppose an electrician in Ontario does $100,000 in billable services in a year. Under the regular HST method:

• HST collected from clients: $13,000 (13% of $100k)
• ITCs on purchases (tools, supplies, insurance, phone, fuel): perhaps $2,000
• Net remittance to CRA: $11,000

Under the Quick Method:

• Total HST-included revenue: $113,000
• Remittance rate: 8.8%
• Amount remitted to CRA: $9,944
• HST kept: $3,056 (an additional ~$1,056 compared to the regular method)

Plus, under the Quick Method, you receive a 1% credit on the first $30,000 of taxable sales — a small additional reduction in year one that sweetens the deal further.

In this scenario, the Quick Method saves the electrician about $1,000 per year. For a service-heavy business with low material costs, that's a straightforward win.

When the Regular Method May Be Better

The Quick Method is not universally advantageous. Trades businesses with high input costs — significant materials, large equipment purchases, or substantial subcontractor costs where HST was paid — often do better under the regular method because the ITCs they can claim exceed the built-in credit in the Quick Method rate.

Consider a framing contractor who purchases $60,000 in lumber, hardware, and materials in a year. The HST paid on those purchases alone ($7,800) is a significant ITC. Under the Quick Method, that ITC disappears — replaced by the fixed remittance rate. If the fixed rate doesn't account for purchases of that magnitude, the regular method produces a lower net remittance. For Ontario contractors with heavy material costs, equipment leases, or large subcontractor HST invoices, run the comparison before electing.

Which Trades Typically Benefit Most from Quick Method

Quick Method tends to favour businesses whose primary cost is labour and whose material purchases are modest relative to revenue:

• Electricians who supply primarily service labour and small consumables
• Plumbers doing service and repair work (not large supply projects)
• Painters and drywall finishers
• HVAC technicians focused on service and maintenance rather than equipment supply
• Cleaning or landscaping businesses tied to construction projects

General contractors who pass through significant materials and manage large subcontractor networks typically do better under the regular method.

How to Elect the HST Quick Method

Electing the Quick Method requires filing Form GST74 (Election and Revocation of an Election to Use the Quick Method of Accounting) with CRA. You can file it online through My Business Account or by submitting the paper form. The election takes effect from the beginning of a fiscal year — you generally cannot switch mid-year. Once elected, you must use it for the full fiscal year before you can revoke it.

If your business is approaching the $400,000 threshold, pay close attention. Exceeding the limit in any year means you're automatically disqualified from using Quick Method for the following year.

For Barrie trades businesses thinking about whether to elect Quick Method, the most important step is to model both methods with your actual numbers before making the election. At Moyano & Co., we run this comparison for clients as part of onboarding — it takes about 20 minutes and can result in hundreds or thousands of dollars in savings per year if the Quick Method is the right fit.