GST, QST, HST: automating tax calculation in your accounting software

A GST/QST return is a handful of boxes to fill in. What takes time is getting to the numbers that go in them: the GST and QST collected on your sales, minus what you recover on your purchases. Here's what accounting software can automate, level by level, and what's still left for you to do by hand.

Why taxes take you so long

Typical friction sources:

• Tax codes per customer/vendor: the tax follows the place of supply, not the vendor's address. A hotel night in Toronto carries 13% HST; an Ontario vendor shipping goods to you in Quebec charges GST, plus QST only if it's registered for the QST. A registered Quebec vendor charges GST+QST. By hand, you have to think about it on every invoice.
• ITC/ITR to separate: on every purchase, you must identify the recoverable tax (business) and the non-recoverable part (personal, 50% business meals, etc.).
• Monthly, quarterly or annual remittance based on your taxable sales: up to $1.5M a year, the default period is annual; from $1.5M to $6M, quarterly; above that, monthly. The return is due one month after the end of a monthly or quarterly period, generally three months after an annual one (Revenu Québec, "Filing Frequency").
• Supporting documents: to claim an ITC or ITR, an invoice of $100 or more must show the supplier's registration number and the tax; at $500 and up, it also needs your name, the payment terms and a description of the purchase. These thresholds replaced the old $30 and $150 figures, still quoted in many places (Input Tax Credit Information (GST/HST) Regulations, s. 3; Revenu Québec applies the same thresholds to the QST).

The automation levels, from 0 to 4

Rather than an average time that would mean nothing for your business, each level is judged on one question: what's still left to do by hand?

Level 0 — Everything by hand (Excel)

You track taxes in a separate sheet and total them each month. Left to do by hand: everything. Every amount you copy is a chance to make a mistake, and the error only shows when the totals don't balance.

Level 1 — Tax is calculated on every invoice

The software has tax codes (GST, GST+QST, HST, exempt, zero-rated). It calculates the tax as soon as you enter an amount. Left to do by hand: picking the right code, invoice by invoice, then totalling the period.

Level 2 — The right tax applies by default

The code is set once: for the whole business, per customer or vendor, or based on the province where the sale takes place (usually the customer's or delivery address). Left to do by hand: the exceptions, and the period total.

Level 3 — The period prepares itself

At period end, the software totals the tax collected on your sales and the tax paid on your purchases, then calculates the net to remit. Left to do by hand: checking, then entering the amounts in your return (form FPZ-500-V) in My Account for businesses.

Level 4 — The return leaves from the software

The software transmits the return with no re-keying. Left to do by hand: reviewing before sending. That step should never disappear.

Worth knowing: for any reporting period that begins on or after January 1, 2024, the return must be filed electronically, except for charities (Revenu Québec, "Filing GST/HST and QST Returns"). So the real question is no longer paper or online, but re-keying or not.

Where Forge Tech Accounting stands, level by level

I fill in this table for my own software only, with what the code does today. Everything can be checked during the trial.

Level	Forge Tech	In practice
1	Yes	GST (5%) and QST (9.975%) calculated separately on the same line subtotal: never tax on tax (the rule in Quebec since 2013).
2	Partly	GST and QST checked by default on every invoice, based on your company profile, and can be unchecked invoice by invoice. No per-customer or per-province tax yet.
3	Yes	Tax reports module: tax collected, tax paid (ITC/ITR) and net remittance for the quarter, the year or any dates you choose. PDF and Excel export. Tax paid on your purchases is already split between GST and QST; tax collected on your invoices comes out as a single GST+QST total, to be split (see the example below).
4	No	The software doesn't file the return. You copy the report's amounts into My Account for businesses: a handful of boxes.

Invoice tax calculation is included from the Base plan ($29/month). Tax reports come with Starter ($49/month).

QuickBooks Online, Sage 50, Acomba, Wave: I won't fill in their column for them. During your trial, ask them the same question at levels 1 to 4: what's still left to do by hand? The answer can be checked in a few minutes of demo.

Example: a monthly remittance, worked line by line

Example with round numbers, to show the mechanics. A registered business, one month: $25,000 of taxable sales in Quebec, $7,600 of taxable purchases, including $400 of business meals. If you remit quarterly or annually, it's the same math over more months.

	GST (5%)	QST (9.975%)
Collected on $25,000 of sales	$1,250.00	$2,493.75
Recoverable on $7,200 of purchases	− $360.00	− $718.20
Recoverable on $400 of meals (50%)	− $10.00	− $19.95
Net to remit	$880.00	$1,755.60

Total to remit: $2,635.60. Forget the 50% rule on meals and you claim $29.95 too much: a small amount, but it comes back every month. Revenu Québec also lets you claim everything during the year, then add 50% of the ITCs and ITRs claimed to your net tax for the first reporting period after your fiscal year end (or, if you file once a year, in the return for that fiscal year) ("Meal and Entertainment Expenses – ITCs and ITRs").

In Forge Tech, the same month goes like this:

1. Your sales invoices calculate GST and QST as you enter them.
2. Your purchases come in as vendor bills. The OCR modules read PDF invoices and receipts that contain text (the ones that arrive by email, for example), pull out the total and the taxes, and prepare a draft vendor bill; you review it.
3. Tax reports module → pick the period → tax collected, tax paid, net remittance. Excel export, or a PDF with your logo, your NEQ and your GST and QST numbers in the header (taken from your profile): ready to hand to your accountant.
4. Tax collected comes out as a single total: $3,743.75 in the example. If all your sales carry GST and QST, splitting it is one multiplication: 3,743.75 × 5 ÷ 14.975 = $1,250.00 of GST; the rest, $2,493.75, is QST.
5. You check the exceptions (meals, HST, purchases from outside Canada), then enter the amounts in Revenu Québec's My Account for businesses.

The PDF report itself ends with that reminder: it's a helper tool, to be checked before you file the official return.

Common trap: exceptions

Some of your transactions don't follow the general rule. Five cases to watch:

• Non-profit vendor: many of its supplies are exempt. No tax charged, so nothing to recover. Check the invoice rather than assume.
• Purchase taxed with HST (the Toronto hotel, for example): the HST paid (13% in Ontario) is recovered in full as an ITC, with no ITR. Check how your software classifies it.
• Purchases from outside Canada: the foreign supplier often charges neither GST nor QST. The GST paid at customs, however, is recoverable as an ITC: keep the customs document.
• Meals and entertainment: only 50% of the GST and QST paid is recoverable (see the example above).
• Mixed-use vehicle: recovery depends on the share of business use and on rules specific to passenger vehicles. Check with your accountant.

I'd rather tell you straight: no software can guess on its own that a meal was a business meal, and mine is no exception. Today, Forge Tech splits the tax on a vendor bill between GST and QST using Quebec rates, so an HST invoice, or a GST-only one (vendor not registered for the QST), has to be corrected by hand. What software should give you is clean totals, so the correction is a subtraction, not a search.

The math, with your numbers

Three lines. Replace my assumptions with yours:

• Assumption 1: your hour is worth $50.
• Assumption 2: Starter costs $49/month, or $490 for 12 months with the annual subscription (2 months free).
• Break-even: $490 ÷ $50 = 9.8 hours a year, or about 49 minutes a month.

In other words: if the software saves you more than 49 minutes a month on taxes, it has paid for itself. At $75 an hour, the threshold drops to 33 minutes. And the 34 modules in Starter aren't only for taxes: invoicing, bank reconciliation, inventory, reading vendor invoices from PDF.

Have employees? Pro ($99/month, $990 a year with the 12-month subscription) adds Quebec payroll, for 71 modules in total.

Getting started

3 actions this week:

1. Time your next remittance, from the first receipt filed to the last amount entered: that's the time to set against the 49-minute threshold worked out above.
2. Check your amounts with the online GST/QST/HST calculator, or grab the free Excel version on the Resources page.
3. Try Forge Tech for 30 days, full software, no credit card. Enter the invoices of a month you've already filed, and compare the net remittance you get with the one on your return. If they match, you know what the software is worth; if not, the gap shows you the exception to fix: start the trial.

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— Guillaume Régimbald, Founder, Forge Tech Inc.