Every Canadian freelancer and sole proprietor eventually hears about the $30,000 threshold. Cross it, and you have to register for GST/HST, start collecting it from clients, and remit it to the CRA. Stay under it, and you're a "small supplier" — exempt from the whole system.
Simple enough. But the part most people get wrong is how the threshold is measured.
It's a rolling 12-month window, not a calendar year
The CRA does not look at January to December. It looks at any consecutive 12-month period ending in the current calendar quarter. That means the window is always sliding forward.
Here's why this matters. Say you invoiced $28,000 between January and December 2025. You're under the threshold — safe. Then in January 2026 you land a big contract and invoice $3,500. You've now crossed $30,000 within a rolling 12-month window (February 2025 to January 2026). You're required to register.
If you were watching a calendar year, you'd think you were at $3,500 for the year and had plenty of room. That's the mistake.
The exact rule from the CRA
From RC4022 (the CRA's guide for small businesses): you exceed the small supplier threshold when your total worldwide taxable supplies — including those of associated persons — exceed $30,000 in a single calendar quarter, or in four consecutive calendar quarters.
Four consecutive calendar quarters is what creates the rolling window. Not January to December. Not the fiscal year. Four quarters back from the current one.
When the clock starts
Once you cross $30,000, you have 29 days to register with the CRA. The 29-day window starts on the day you made the supply that pushed you over — not the end of the month, not the end of the quarter.
You must start collecting GST/HST on all supplies made after you cross the threshold. If you invoice $32,000 across 20 invoices, you need to track which specific invoice pushed you over and start charging on all invoices that come after it.
What counts toward the threshold
Taxable supplies include:
- Revenue from services you provide (consulting, freelance work, design, development)
- Revenue from physical goods you sell (unless they're zero-rated)
- Rent from commercial property
What doesn't count:
- Employment income (T4 income is not a "supply")
- Sale of your personal capital property (like selling your car)
- Zero-rated supplies (exports, basic groceries, prescription drugs)
- Exempt supplies (residential rent, most healthcare)
What happens if you get it wrong
If you miss the registration deadline, the CRA can assess you for the GST/HST you should have collected from the date you crossed the threshold. That means you could owe tax on revenue you already received without ever collecting it from clients. You'd be paying it out of your own pocket.
The CRA also charges penalties and interest on late registration. The penalty is generally 1% of the amount owing plus 25% of that amount per year — it adds up fast.
How to track it correctly
The simplest approach is to add every invoice to a tracker that calculates the rolling 12-month window automatically. A spreadsheet can work if you build it correctly — you need to sum revenue from the same date 12 months ago through today, not January 1 through December 31.
That's exactly what HST Hero does. You log your revenue entries and it maintains the rolling window, shows you a percentage of the threshold, and estimates the date you'd cross at your current pace. Free up to 10 transactions.
The bottom line
- The threshold is $30,000 over any rolling 12-month period
- It is not a calendar year
- You have 29 days from crossing to register
- Employment income doesn't count — only taxable supplies
- Missing the deadline means you owe tax you didn't collect