Ontario Sales Tax: Your HST Guide 2025

Business owners in Ontario, Canada, have no escape from its tax system. Unfortunately, the process can be tricky, especially for those still learning about nexus and the country's multi-level tax system. Most goods and services in Ontario are subject to Harmonized Sales Tax (HST). This guide will help you better understand sales tax in Ontario.

Ontario's Sales Tax System

Ontario follows a Harmonized Sales Tax (HST) system, which blends federal and provincial sales taxes into a single tax. Ontario HST is administered by the Canada Revenue Agency (CRA) simplifying collection and compliance for businesses operating in Ontario.

What is the Harmonized Sales Tax (HST) in Ontario?

The Ontario HST Harmonized Sales Tax is a 13% sales tax that applies to most goods and services sold or provided in the province. It is called "harmonized" because it combines the 5% federal Goods and Services Tax (GST) and the 8% Ontario Provincial Sales Tax (PST).

HST in Ontario makes it easier for businesses to collect and remit taxes.

Most products and services in Ontario are subjected to HST. This includes retail sales, digital products, and professional services.

However, there are also some exceptions—basic groceries, prescription medications, certain medical devices. Some financial services are either zero-rated (taxed at 0%) or exempt from Ontario HST.

Businesses registered for HST Ontario are also eligible to claim input tax credits (ITCs). ITCs help recover the tax paid on business-related purchases and expenses.

What is RST in Ontario?

The Ontario Retail Sales Tax (RST) was a provincial sales tax of 8%. It applied to most tangible goods and certain services before July 1, 2010. When the province adopted the HST system, the RST Ontario was mostly eliminated and replaced by the 13% HST.

The move to HST also allowed businesses to claim Input Tax Credits (ITCs) on the provincial portion of the tax. This was previously not possible under the old RST system. ITC reduces the cost of doing business and encourages economic growth.

However, the transition also sparked debates because some RST-exempt items are now taxed. Among them are personal and professional services and digital products.

Retail Sales Tax (RST) vs. HST in Ontario

After the transition to HST, the 8% RST was eliminated for most goods and services and replaced with the provincial portion of HST Ontario. However, RST Ontario still exists and applies to specific items outside the Ontario HST system like insurance premiums and private used vehicles purchased from an individual.

Overall, Ontario HST applies to a broader range of services and digital products than RST, which focuses mostly on physical goods.

Here’s an overview of the two:

Category	RST Ontario (Before July 1, 2010)	HST Ontario
Tangible Personal Property (Goods)	Taxed at 8%	Taxed at 13% (HST)
Basic Groceries	Exempt	Zero-rated (0%)
Prescription Drugs & Medical Devices	Exempt	Zero-rated (0%)
Personal Services (e.g., haircuts under $50)	Exempt	Taxed at 13% (unless exempt or zero-rated)
Professional Services (e.g., legal, accounting)	Exempt	Taxed at 13%
Digital Products (e.g., eBooks, downloads)	Exempt	Taxed at 13%
Real Property & New Housing	Not subject to RST	Taxed at 13% (Partial rebates may apply for new housing)
Prepared Food & Beverages under $4	Exempt	Still subject to 5% GST and 8% point-of-sale rebate
Insurance Premiums	Taxed at 8%	Still subject to 8% RST (Separate from HST)
Private Used Vehicles (non-dealer sales)	Taxed at 8% RST at vehicle registration	Still subject to 13% HST if sold by a dealer, 8% RST if private sale
Alcohol & Tobacco Products	Subject to RST + Excise taxes	Subject to 13% HST + Excise taxes

How to Calculate Sales Tax in Ontario

Calculating sales tax in Ontario is simple once you know the HST Ontario rate, which applies to most goods and services sold in the province. The next section will help you navigate this by giving you an example and a step-by-step instruction on how to calculate tax in Ontario.

Step-by-Step Calculation for Ontario HST

For example, you own a retail business in Ontario and you are selling a $100 jacket. Here's how to calculate sales tax or HST in Ontario.

Step 1: Determine the Ontario HST rate

HST Rate = 13%

HST Rate (as a decimal): 0.13

Step 2: Calculate the Ontario HST amount Multiply the sale price by 13%.

Sale Price = $100.00

Ontario HST Amount = Sale Price x HST Rate (as a decimal)

Ontario HST Amount = $100.00 x 0.13

Ontario HST Amount = $13.00

Step 3: Add the Ontario HST Amount to the Sale Price:

Total Price = Sale Price + Ontario HST Amount

Total Price = $100.00 + $13.00

Total Price = $113.00

Using Online Ontario Sales Tax Calculators & Tools

If you do not want to do the manual calculations, that is not a problem. GST HST calculators and reverse HST calculators are available online. The government of Canada offers online sales tax calculators that you can easily access and use.

The GST/HST calculators help you determine the amount of tax applied to sales in the province. Simply select Ontario for the province or territory and enter the amount before taxes. The HST calculator Ontario will automatically calculate HST and the total price after taxes.

The reverse HST calculator Ontario is helpful in finding out the amount before sales tax are applied. Just choose the Ontario for the province or territory and input the total after taxes amount and you will get the amount before taxes.

Sales tax automation tools, like Kintsugi, come with their own sales tax calculators. Kintsugi accurately calculates Ontario sales tax by applying the correct tax rates. With Kintsugi, you do not need to worry about your HST in Ontario because its Kintsugi’s expertise.

Sales Tax Compliance for Ontario Businesses

Sales tax compliance in Ontario is pretty straightforward because the province uses a single Harmonized Sales Tax (HST) rate of 13%. However, the process can also be complex depending on the nature and size of the business. In this section, we will give you an overview of the process of sales tax compliance in Ontario.

HST Ontario Registration, Collection, and Remittance Essentials

The CRA is the federal government body responsible for administering Ontario sales taxes. It oversees the registration, collection, filing, and remittances of sales taxes. CRA also administers, audits, and enforces compliance. Additionally, it processes refunds, rebates, and Input Tax Credits.

Here are some of the requirements needed during registration.

• Business Number (BN) and HST Account
• Business Registration Documents (Legal and trade name of the business, type of business structure, business address, contact information, etc.)
• Banking Information
• Sales records (Invoices and receipts)
• Input Tax Credit Records
• GST/HST Returns
• Payment Records

Here's an overview of the process once you have set up your business and reached nexus.

1. Register for a Business Number (BN) with CRA.
2. Open an Ontario HST program account
3. Keep business registration documents.
4. Charge the correct Ontario HST rate on taxable goods and services.
5. Keep records of all sales and purchase transactions.
6. Maintain receipts and proof of Ontario HST paid on business expenses for ITC claims.
7. File Ontario HST returns based on the assigned filing frequency (monthly, quarterly or annually).
8. Remit collected Ontario HST to the CRA.
9. Claim ITC to recover Ontario HST paid on business expenses.

Reconcile sales tax records and tax remittances regularly for audit. Also, renew or update your CRA account information if there are changes to your business.

Frequently Asked Questions

How much is sales tax in Ontario?

The total sales tax in Ontario is 13%.

How much is HST tax in Ontario?

The HST rate in Ontario is 13%.

What is the sales tax in Ontario?

Ontario follows the Harmonized Sales Tax (HST) system, which charges 13% (federal rate 5% + provincial rate 8%) on most goods and services.

What is PST in Ontario?

Ontario does not have a separate PST; it is included in the HST.

How much is PST in Ontario?

The provincial portion of HST is 8%.

How much is the GST in Ontario?

The federal GST portion in Ontario's HST is 5%.

How to calculate tax in Ontario?

Multiply the amount before taxes by 0.13 to calculate Ontario sales tax.

How to add tax to price?

Multiply the amount before taxes by 1.13 to get the total price with tax.

How to calculate HST from total?

Divide the total after taxes amount by 1.13 to find the pre-tax price, then subtract it to the total after taxes amount to find the HST. The HST reverse calculator will be helpful for this.

HST Ontario Key Points

• Ontario HST is 13% combining 5% federal GST and 8% provincial tax, on most goods and services sold or consumed in the province.
• Businesses must register with the Canada Revenue Agency (CRA) for an Ontario HST account once their taxable sales exceed $30,000 annually. Then they can charge, collect, and remit HST on taxable transactions in Ontario.
• HST Ontario applies to retail goods, professional and personal services, restaurant meals, digital products, accommodations, and more. Some goods (like basic groceries, prescription drugs, and medical devices) are zero-rated or exempt.
• Registered businesses can claim ITCs to recover HST in Ontario paid on eligible expenses.

Next Steps & Essential Resources for HST Ontario

Learn more about HST Ontario sales tax by visiting the following websites.

• Canada Revenue Agency (CRA)
• CRA Account
• Ontario Ministry of Finance

You can simplify the whole process by using a sales tax automation tool like Kintsugi, which comes with its own Ontario sales tax calculator. Kintsugi is easy to use, calculates accurate taxes, keeps up with CRA rules, rate changes or exemptions, and seamlessly integrates with Shopify, Big Commerce and Amazon Sign up or book a demo now for stress-free Ontario tax compliance.