Do You Need to Charge HST on Your Handmade Products in Canada?
Tax questions make most makers uncomfortable, so they either ignore them entirely or overcomplicate them. The rules around HST for small Canadian businesses are actually straightforward once you understand the threshold and what triggers registration. Here's what you need to know.
The $30,000 Threshold Rule
In Canada, you are not required to register for and collect HST (Harmonized Sales Tax) until your business earns more than $30,000 in taxable sales in a single calendar quarter or over four consecutive calendar quarters.
This $30,000 figure refers to your total revenue from taxable goods and services, not your profit. It's the gross sales number.
If you're selling handmade goods at Toronto markets and your annual revenue is under $30,000, you are considered a "small supplier" under the Excise Tax Act and do not need to register for an HST number or collect HST from your customers. You also cannot claim input tax credits (meaning you can't recover the HST you pay on your business supplies).
Once you cross the $30,000 threshold, or reasonably expect to cross it, registration is mandatory. You have 29 days from the day you exceed the threshold to register.
You can also register voluntarily before hitting $30,000. Some makers do this to claim input tax credits on materials and equipment, which can reduce costs if you're spending significantly on production supplies.
What's Taxable vs. What's Exempt
Most handmade products sold at craft markets are taxable supplies, meaning HST applies once you're registered. This includes:
- Jewelry, ceramics, candles, clothing, accessories
- Art prints, cards, stationery
- Soaps, bath products, beauty items
- Home goods, textiles, furniture
Food products have different rules. Basic groceries are generally zero-rated (HST applies at 0%, meaning no HST collected but you can still claim input tax credits). However, prepared foods, snacks, and some specialty food items are taxable at the full rate. If you sell food products, check the CRA's guidance on zero-rated vs. taxable food categories specifically, as the distinctions are detailed.
How to Register for an HST Number
Register through the CRA's Business Registration Online portal at canada.ca, or by calling the CRA Business Enquiries line.
You'll need:
- Your Social Insurance Number (if registering as a sole proprietor) or your Business Number if you're already incorporated
- Your business name and address
- An estimate of your annual sales
Once registered, you'll receive a Business Number with an RT suffix (e.g., 123456789 RT 0001). This is your GST/HST account number.
After registration, you collect HST on every taxable sale. In Ontario, that's 13%. You report and remit that collected HST to the CRA on a schedule determined by your sales volume (monthly, quarterly, or annually). You also subtract the HST you paid on business expenses (input tax credits) from what you owe.
What to Do at Markets Before and After Registration
Before registration (small supplier): You don't collect HST. Your prices are your prices. You don't need to display HST numbers or add tax at checkout. Keep records of your sales anyway, because you need to track whether you're approaching the $30,000 threshold.
After registration: Your prices need to either include HST or have it added at the point of sale. Many makers build HST into their listed prices for simplicity at markets (so a $40 candle stays $40, and you remit the HST portion to CRA from that amount). Others add it separately, which is more transparent but adds a step at checkout.
For market sales, the built-in approach is cleaner. Calculate the HST-inclusive price: divide your before-tax price by 1.13 to find the pre-tax portion, and the difference is the HST you owe CRA.
Track every sale, keep all your purchase receipts for input tax credits, and file on time. Late filings attract penalties.
If you're uncertain about your specific situation, CRA's small business helpline is a legitimate resource, and a one-hour consultation with a Canadian accountant familiar with small business HST is worth the cost.
Find more resources for Toronto vendors at Daily Market Stories.
