Ontario Sales Tax Calculator

HST calculator Ontario: the 13% formula with examples

To add Ontario HST, multiply the pre-tax price by 1.13; to remove it, divide the total by 1.13. A $100.00 purchase becomes $113.00, and an $849.99 television becomes $960.49, with $110.50 of HST on the receipt.

That HST is two taxes in one line. $42.50 of it is the 5% federal portion and $68.00 is the 8% Ontario portion. Receipts show a single HST amount, so you split it yourself when you need the two parts.

Working backwards, the HST inside any Ontario tax-included price is 13/113 of it, about 11.50%. A $56.50 total contains $6.50 of HST on a $50.00 price.

Ontario point-of-sale rebate: the fine print

On rebated items you pay 5%, not 13%, but only if the item meets Ontario’s definitions. The rebate is applied at the till; you do not claim it later. These are the conditions set out by the Ministry of Finance:

The $4 coffee rule, worked through

The prepared-food rebate looks at the total of all qualifying items on the order, before HST. A $3.75 coffee and muffin is at or under $4.00, so only 5% applies: $0.19 tax, $3.94 total.

Add a $0.50 cookie and the order becomes $4.25. It is now over the limit, so full HST applies to the whole order: $0.55 tax, $4.80 total.

What has no HST at all in Ontario

Zero-rated and exempt items carry neither the federal nor the provincial part. These are set federally, so the list is the same as in every other HST province:

• Zero-rated: basic groceries, prescription drugs and dispensing fees, certain medical devices such as hearing aids, feminine hygiene products, and goods exported from Canada.
• Exempt: residential rent for a month or longer and condo fees, resale homes, most health and dental services, child care, music lessons, vocational courses leading to a certificate or diploma, and most financial services.
• Still fully taxed despite being food: soft drinks, candy and chocolate bars, chips, single-serving drinks under 600 mL, anything sold hot, vending-machine sales, and doughnuts or pastries sold in packs of fewer than six (CRA basic groceries memorandum).

Ontario Retail Sales Tax: used cars and insurance

Ontario’s old Retail Sales Tax still applies in two places, and both catch people by surprise.

Used vehicles bought privately. When you buy a car, motorcycle, trailer, boat or snowmobile from someone who is not a GST/HST registrant, you pay 13% RST on its fair market value; for a road vehicle it is collected at ServiceOntario when you transfer ownership. For cars, vans and trucks of 2,200 kg or less, it is charged on the greater of the price you paid and the Canadian Red Book value. If you pay $9,000 for a car with a Red Book value of $11,500, the RST is $1,495.00, not $1,170.00. If the Red Book value is under $1,000, the price is used. If the car is excessively worn or damaged, an approved appraisal can lower the base; to claim a refund after paying on Red Book value, the appraisal must be done within 60 days of the purchase.

Trade-ins do not reduce RST on a private sale. A gift from a spouse, parent, court-appointed guardian, child, sibling (including half-siblings), grandparent or grandchild is exempt, but only one exempt family transfer of the same vehicle is allowed in 12 months. If you buy from a dealer, HST applies instead of RST. If you bring a vehicle bought from a business in a non-HST province, the 8% provincial part of the HST may be due at ServiceOntario.

Insurance and benefit plans. An 8% RST applies to premiums for taxable insurance, including group insurance and employer benefit plans. On a $1,200 taxable group premium that is $96.00. Compulsory automobile insurance and individual life and health policies are exempt.

Who must register to charge HST in Ontario

You must register for GST/HST once your worldwide taxable sales pass $30,000 in one calendar quarter or over four consecutive quarters. From then on you charge 13% on taxable sales delivered in Ontario. You must register with the CRA within 29 days of your effective date of registration. Taxi and commercial ride-sharing drivers must register whatever their sales.

Below the threshold, registering is optional. Many small Ontario businesses register anyway, because registration lets them claim back the HST paid on equipment, rent and supplies through input tax credits.

Common HST mistakes in Ontario

• Charging 13% on children’s items or books. Rebated items carry 5%, and point-of-sale systems need the item flagged correctly or customers are overcharged.
• Taking 13% off a tax-included total to find the price. Divide by 1.13 instead.
• Assuming a private used-car sale is tax-free. RST of 13% is collected when you register the car.
• Charging HST on long-term residential rent. Rent for a month or longer is exempt; short-term accommodation is taxable.