Prince Edward Island Sales Tax: Your 2025 Guide to HST

Prince Edward Island (PEI) is another province in Canada using harmonized sales tax (HST). PEI sales tax is simple, but some might find it tricky due to exemptions and other considerations. This Prince Edward Island tax guide 2025 aims to simplify the whole process.

Prince Edward Island's Sales Tax System

Prince Edward Island (PEI) combines the federal GST and provincial tax into a single harmonized sales tax (HST) system. The tax is applied to most goods and services sold in the provinces. Thanks to HST, businesses only need to register, collect, and remit sales tax to the Canada Revenue Agency (CRA).

What is Prince Edward Island's HST?

PEI HST combines the 5% federal GST and 10% Prince Edward Island retail sales tax or provincial tax. The unified PEI tax rate is 15%.

PEI HST is administered by CRA. Here's a table showing the items and services where HST in PEI applies.

Category	Examples
Retail Goods	Clothing (adult), electronics, furniture, home décor, appliances
Prepared Food & Beverages	Restaurant meals, takeout, catering, alcohol
Digital Products	Streaming services, eBooks, software downloads, mobile apps
Professional Services	Legal, accounting, consulting, IT services
Personal Services	Haircuts, spa treatments, fitness training, massage therapy (non-medical)
Accommodation Services	Hotel stays, Airbnb rentals, motels (under 30 days)
Entertainment & Events	Movie tickets, concerts, amusement parks, sports events
Telecommunications	Internet, mobile phone plans, cable and satellite TV
Home Renovation & Repairs	Plumbing, electrical work, painting, general contracting
New Residential Housing	Purchase of newly built homes (HST applies; rebates may apply)
Vehicle Sales & Rentals	Cars, trucks, motorcycles (dealer sales), rentals, lease payments
Travel Services	Vacation packages within Canada, domestic tour services

PEI HST Exemptions & Rebates

There are also zero-rated and exempt items in Prince Edward Island. Zero-rated are items charged with 0% tax but allow businesses to claim input tax credits (ITCs).

On the other hand, tax-exempt items have no HST. So, business owners cannot claim ITCs for the expenses of those supplies.

HST Category	Description	Examples
🟢 Zero-Rated (0%)	Taxed at 0%; businesses can claim ITCs	- Basic groceries (milk, bread, vegetables, meat)- Prescription drugs- Medical devices (hearing aids, pacemakers)- Feminine hygiene products- Exports of goods and international services
🔵 Exempt (No HST)	Not taxed; businesses cannot claim ITCs	- Residential rent- Most health care services (doctors, dentists)- Educational services (school tuition, university programs)- Licensed child care services- Financial services (loans, insurance, bank fees)
🟠 Point-of-Sale Rebate (Only 5% HST Charged)	PEI removes 10% provincial portion at checkout	- Children’s clothing and footwear (up to youth sizes)- Printed books and religious scriptures- Residential heating oil (fuel oil for home heating)

Calculate Your Prince Edward Island Sales Tax

Calculating sales tax in PEI is simple, thanks to its unified HST system. This section will walk you through how to calculate Prince Edward Island sales tax accurately.

Step-by-Step Calculation for PEI HST

For example, you own a small electronics store in PEI and sell a laptop for $1,000. You need to calculate the 15% PEI HST and determine the total amount the customer will pay.

Step 1: Determine the PEI HST rate

PEI HST Rate = 15%

As a decimal: 0.15

Step 2: Calculate the PEI HST Amount

Sale Price = $1,000

PEI HST Amount = Sale Price x HST Rate

PEI HST Amount = $1,000 x 0.15

PEI HST Amount = $150.00

Step 3: Add PEI HST to the Sale Price

Total Price = Sale Price + PEI HST Amount

Total Price = $1,000 + $150

Total Price = $1,150.00

If, for instance, you receive a total invoice of $1,150.00 for a laptop purchase in PEI, and you want to find out the pre-tax price and the PEI HST. Use the formula below.

Step 1: Know the PEI HST rate

Prince Edward Island HST rate = 15%

PEI HST total multiplier = 1.15

Step 2: Use the formula to find the pre-tax price

Total Price = $1,150.00

Pre-Tax Price = Total Price/PEI HST

Pre-Tax Price = $1,150/1.15

Pre-Tax Price = $1,000.00

Step 3: Subtract to find the PEI HST amount

PEI HST Amount = Total Price - Pre-Tax Price

PEI HST Amount = $1,150.00 - $1,000.00

PEI HST Amount = $150.00

Using Online PEI Sales Tax Calculators & Tools

If you want to spare yourself from the manual labor of calculating PEI taxes, you can use a PEI tax calculator. Canada’s GST/HST calculators have both sales tax and reverse sales tax calculators.

You simply need to input the “Province or territory” and “Amount before taxes” if you want to see the “Total after taxes.” Otherwise, enter the “Total after taxes” to see the “Amount before taxes.” You will also see the HST amount and corresponding values for federal and provincial taxes.

If you want an even more easier solution, use Kintsugi, a sales tax tool designed to automate the process. Kintsugi has its own PEI tax calculator and can do the filing and remittance for you.

Compliance Essentials for Prince Edward Island Businesses

Staying compliant with sales tax rules is essential for businesses operating in Prince Edward Island. This section covers the key steps to help you register, collect, report, and remit PEI HST.

Registration, Collection, & Remittance

1. Registration

Who Needs to Register:

• Businesses must register for a PEI HST account with the Canada Revenue Agency (CRA) if they earn $30,000 or more in taxable sales over the last four consecutive calendar quarters.
• Voluntary registration is allowed below that threshold, which enables businesses to charge PEI HST and claim input tax credits (ITCs) on business expenses.

How to Register:

• Online: Through the CRA’s Business Registration Online portal
• By Phone: Call CRA at 1-800-959-5525
• By Mail or Fax: Complete and submit Form RC1 – Request for a Business Number

What You Receive:

• A Business Number (BN) with an associated PEI HST account (format: 123456789 RT 0001)

1. Collection

Once registered, you must charge 15% HST (PEI taxes) on all taxable goods and services sold or provided in Newfoundland and Labrador

Invoice Requirements:

Each invoice must clearly include:

• Sale subtotal
• PEI HST amount (15%)
• Total price
• Your PEI HST account number

Maintain detailed records of all sales, invoices, PEI HST collected, and any tax-exempt or zero-rated transactions.

1. Remittance & Filing

File your remittance online through CRA's My Business Account, by mail, tax professional, or sales tax automation tool like Kintsugi. The filing frequency is assigned by CRA and could be any of the following:

• Monthly: If taxable sales exceed $6 million annually
• Quarterly: If between $1.5 million and $6 million
• Annually: If under $1.5 million

During your filing, make sure to include the following:

• Total sales and revenue
• PEI HST collected (output tax)
• Input Tax Credits (ITCs) claimed
• Net tax owing (PEI HST collected – ITCs)

Remittance:

• Pay the amount owed to the CRA by the filing deadline (based on your frequency) to avoid interest and penalties.

Quick Tips for Prince Edward Island tax compliance

Here are practical tips to make the whole process convenient and stress-free.

1. Keep records for at least 6 years.
2. Reconcile your PEI HST filings regularly.
3. Stay informed on PEI HST exemptions, rebates, and rate changes.
4. Use automation tools like Kintsugi to simplify tracking, filing, and remittance.

FAQs

What is the sales tax in PEI?

Prince Edward Island uses a 15% Harmonized Sales Tax (HST) on most goods and services.

How much is HST in PEI?

The HST in PEI is 15%, which includes 5% federal GST and 10% provincial tax.

What tax is charged in PEI?

PEI charges HST at a rate of 15%, which is applied to most purchases and services.

What is exempt from PEI sales tax?

Common exemptions include residential rent, health care services, educational services, child care, and financial services.

Key Points

• PEI uses a Harmonized Sales Tax (HST) system, combining the 5% federal GST and 10% provincial tax into a single 15% tax rate.
• Businesses earning $30,000 or more annually in taxable sales must register with the Canada Revenue Agency (CRA) to collect, file, and remit PEI HST.
• PEI HST applies to retail goods, digital products, services, accommodation, and prepared food. Some items like basic groceries, prescription drugs, and medical devices are zero-rated, and others like rent, education, and child care are exempt.
• PEI offers point-of-sale rebates that remove the 10% provincial portion of PEI HST for specific items, including children’s clothing and footwear, printed books, and residential heating oil.

Next Steps & Essential Resources for PEI Sales Tax

Learn more about PEI sales tax by visiting the following websites.

• Canada Revenue Agency (CRA)
• CRA Account
• Prince Edward Island Finance

Skip all the hassles and confusion and focus on your business growth by letting Kintsugi handle your PEI sales tax compliance. Calculating PEI HST and registering, filing, and remitting PEI sales tax are what Kintsugi does best.

Book a demo or sign up today to experience the power of Kintsugi.