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Hst Credit Calculator Ontario

Reviewed by Calculator Editorial Team

Ontario's HST (Harmonized Sales Tax) credit program helps small businesses and individuals recover the HST they've paid on eligible business expenses. This calculator helps you determine your eligible HST credit and understand how to claim it.

What is HST Credit in Ontario?

The HST credit program allows Ontario businesses and individuals to recover the HST they've paid on eligible business expenses. This program helps offset the cost of doing business and can provide significant tax savings.

Key Points

  • Available to small businesses and individuals
  • Recovers HST paid on eligible business expenses
  • Can be claimed as a refund or credit against future tax liability
  • Available for both new and existing businesses

Eligible Expenses

Eligible expenses typically include:

  • Office supplies and equipment
  • Travel and accommodation for business purposes
  • Professional services (accounting, legal, etc.)
  • Marketing and advertising costs
  • Utilities and rent for business premises

Claiming HST Credit

You can claim HST credit in two ways:

  1. As a refund through the HST credit program
  2. As a credit against your future tax liability

How to Claim HST Credit

Claiming HST credit involves several steps. Here's a simplified process:

  1. Determine your eligible expenses - Keep detailed records of all business-related expenses
  2. Calculate your HST credit - Use our HST Credit Calculator to determine your eligible amount
  3. Apply for the credit - Submit your application through the Ontario government website
  4. Receive your refund - Once approved, you'll receive your HST credit as a refund

Formula Used

HST Credit = (Total Eligible Expenses × HST Rate) × HST Credit Rate

Where HST Rate is typically 13% and HST Credit Rate is 6.5% for small businesses

Important Considerations

  • You must maintain proper records of your business expenses
  • Applications must be submitted within 6 months of the end of the tax year
  • There are income limits for individuals claiming HST credit
  • Some expenses may not be eligible for HST credit

Examples

Let's look at two examples to illustrate how the HST credit calculator works.

Example 1: Small Business

A small business with $50,000 in eligible expenses would calculate their HST credit as follows:

Calculation Step Value
Total Eligible Expenses $50,000.00
HST Rate (13%) $6,500.00
HST Credit Rate (6.5%) $422.50
Total HST Credit $2,168.75

Example 2: Individual

An individual with $10,000 in eligible expenses would calculate their HST credit as follows:

Calculation Step Value
Total Eligible Expenses $10,000.00
HST Rate (13%) $1,300.00
HST Credit Rate (6.5%) $84.50
Total HST Credit $546.00

FAQ

What is the difference between HST and GST?

HST (Harmonized Sales Tax) combines the federal GST and provincial PST into a single tax. In Ontario, the HST rate is 13%.

How long do I have to claim HST credit?

You must claim HST credit within 6 months of the end of the tax year in which the expenses were incurred.

Can I claim HST credit for all my business expenses?

No, only certain expenses are eligible for HST credit. Common eligible expenses include office supplies, travel, and professional services.

Is there a limit to how much HST credit I can claim?

Yes, there are income limits for individuals claiming HST credit. Businesses have different limits based on their taxable income.

How do I apply for HST credit?

You can apply for HST credit through the Ontario government website. You'll need to provide documentation of your eligible expenses.