How to invoice the customers who buy your products and services depends on your Canadian small business's tax situation.
Because of the different tax requirements of various provinces and the rules surrounding the goods and Services Tax (GST) and Harmonized Sales Tax (HST), an invoice from a business that qualifies as a Small Supplier in Alberta has different requirements than an invoice from a business in Ontario that doesn't.
So I've put together a collection of invoice templates that provide models of the different invoices that different tax scenarios require. Just pick the one that matches the tax situation for your business.
Below the links to the different invoice templates, I've included a list of which provinces and territories charge which taxes for your convenience.
- How to Invoice Selling Products With No Taxes (Simple Invoice Template)
- How to Invoice Selling Services With No Taxes (Simple Invoice Template)
- How to Invoice With HST (Harmonized Sales Tax)
Canadian Taxes: Which Province Charges Which Taxes & How Much?
|BC||GST 5% & PST 7 %||As of April 1, 2013.|
|Saskatchewan||GST 5% & PST 5%|
|Manitoba||GST 5% & PST 7%|
|Quebec||GST 5% & QST 9.5%(Quebec Sales Tax)||As of January 1, 2013, the QST rate will be 9.975%, but will no longer be charged on GST. This results in no change to the total tax.|
|New Brunswick||HST 13%|
|Nova Scotia||HST 15%|
|Newfoundland & Labrador||HST 13%|
|Prince Edward Island||HST 14%||As of April 1, 2013.|
|Northwest Territories||GST 5%|
How to Invoice: Invoice Requirements
Generally, invoices need to inform customers of the price of the goods and/or services they are purchasing and the amount of tax they are paying on those goods and/or services.
If you are charging GST/HST on your goods and/or services, you need to follow the Canada Revenue Agency's requirements for what information has to be on your invoices. These are explained in detail in both How to Invoice With HST and How to Invoice With GST and PST.
How to Invoice: Rules for Charging PST
In Saskatchewan and Manitoba, PST, like GST, is charged on the total selling price of the merchandise.
Quebec and Prince Edward Island are the exceptions to this rule; in these two provinces, PST is charged based on the total of the selling price plus GST. For examples see How Do I Calculate GST/HST?
Accounting Software & Invoices
Accounting software makes doing invoices easy. Accounting software designed for small businesses can not only be used as POS (Point of Sale) systems and print out invoices on the spot, but makes it easier to calculate and keep track of taxes, such as the GST/HST.