Let’s keep this simple. If your sales add up to more than $30,000 over any 12-month period, you’re expected to register for GST/HST. That rule applies even if all your work is online.
It doesn’t matter whether you’re freelancing, consulting, selling access to software, or delivering files digitally. Once your total crosses the limit, registration kicks in. This is where people usually assume there’s a loophole. There isn’t, you can always consult with a bookkeeping specialist in this process.
Canada doesn’t have a separate tax rule just because a service is “digital.” Online work and in-person work are treated the same. The $30,000 limit is the same in both cases. Below, we’ll walk through what counts toward that total and when registration actually starts. No jargon. Just the rule, explained clearly.
What Counts as Digital Services for Tax Purposes?
Canada’s Digital Services Tax (DST) was a 3% tax on revenues large digital companies earned from Canadian users. It took effect January 1, 2022 (despite the law passing in 2024). Companies had to track Canadian-sourced income and pay the 3% if they met revenue thresholds, per CRA rules.
It applied only to these four service types:
- Targeted online advertising
- Social media platforms
- Online marketplaces connecting buyers and sellers
- Sale or licensing of user data from Canadians
For e-commerce businesses which need tracking tax data, the DST meant extra revenue tracking, compliance, and record-keeping adjustments.
In June 2025, the government fully repealed the DST. As of 2026, the tax is eliminated—no filings, payments, or obligations remain. The repeal is being finalized (via Bill C-15 and related steps) with retroactive effect to mid-2024.
Any early payments will be refunded by the CRA with interest; penalties and collections are suspended.
If your e-commerce business needs to review past tax accounting impacts, check for refunds, or update digital tax strategies post-repeal, consult an experienced ecommerce tax accountant for clear, tailored guidance.
Types | Examples | GST/HST Applies |
|---|---|---|
Digital services | Freelancing, consulting, coaching, SaaS access | Yes |
Digital products | Ebooks, templates, downloads, and streamed content | Yes |
Mixed | Apps with subscription + downloadable content | Yes |
What Is the Small Supplier Tax Threshold in Canada?
If your total taxable sales are $30,000 or less over 12 months, you are considered a small supplier in Canada. This is gross revenue, not profit, and includes sales to clients worldwide.
Example:
From January to December, you earn $2,500 per month from online coaching.
After 12 months, your total is $30,000.
You now must register for GST Canada to stay compliant.
Check CRA digital services tax rules for details.
Does the Tax Threshold Apply Differently to Digital Services?
No, digital services do not have a separate tax threshold in Canada. Whether you deliver your work through Zoom coaching, app subscriptions, SaaS platforms, or other online tools, the same $30,000 small supplier threshold applies. GST/HST rules are the same for all of these services.
How you provide the service does not change your tax obligation. Once your total taxable sales go over the threshold, registration for GST/HST is required.
Many people think digital services have a different threshold, but they don’t. The best way to stay on top of it is to keep a simple running total of all your sales — online or offline. Helping you avoid surprises and know when to register.
Pro Tip: To keep numbers building up, keep a little notebook or a simple spreadsheet handy and jot down every sale, even the tiny ones, to prevent surprises.
When do digital service providers need to sign up for GST/HST?
You have to sign up for GST/HST if you make more than $30,000 in taxable sales in a year. This law applies to freelancers, consultants, digital items, and even people who don’t live in Canada but sell to Canadian customers.
The day after you cross the threshold is when your registration starts. You have to charge GST/HST on all taxable sales from that day on. If you wait too long to register or forget to charge tax, the CRA might charge you interest and penalties later.
Tip: At the conclusion of each month, immediately tally up your sales and jot down the total. It’s time to sign up when you get near $30,000, so you don’t miss anything.
The CRA’s digital services GST/HST guideline page clearly outlines how to double-check the laws. Following the instructions early keeps your records clean and stops problems from happening later.
What If You Are a Freelancer or Consultant?
If you work as a freelancer or consultant in Canada, the tax rules are straightforward. As long as your total sales stay under $30,000 over a 12-month period, you can invoice clients without charging GST/HST.
Once your sales go past that amount, you must register and start charging GST/HST on all taxable work. This includes online services, digital products, and work done for Canadian clients, even if you’re based elsewhere.
Example: Alex is a freelance designer earning $3,000 a month online. After ten months, her total sales reached $30,000. She registers right away, starts charging GST, and avoids any penalties.
A common mistake freelancers make is waiting too long to register or forgetting to include side income when adding up their sales. That’s often how problems with CRA start.
Tip: Keep a simple monthly total of everything you earn. When you see it getting close to $30,000, it’s time to register.
What About Non-Residents Selling Digital Services to Canadians?
Thinking about selling digital services to Canadians? Even if you live outside Canada, you still have to follow GST/HST rules.
If your sales to Canadians go over $30,000 in any 12-month period, you must register for GST/HST. Some non-residents can use a simpler registration process to make it easier. After you register, you have to charge GST/HST on all sales to Canadian clients, including digital services and online products.
Getting advice from someone who knows the rules, like SAL Accounting, can save you time and stop mistakes before they happen.
Tip: Keep a quick record of every sale to Canada. Even the occasional sale adds up toward the $30,000 limit. Add them up each month so you know when it’s time to register and don’t run into problems.
How SAL Accounting Helps Digital Service Providers Stay Compliant
It can be hard to understand taxes for digital services. That’s when we come in.
We at SAL Accounting will make sure you know when to sign up for GST/HST and how to maintain track of your sales. We can help with:
- Charging the right amount of GST/HST for digital services and commodities
- Handling sales from outside of Canada
- Keeping track of your overall income so you don’t go over the registration limit
- If you let us help you, you can focus on your business and avoid fines and surprises.
If you need help with your digital service taxes in Canada, contact them now.
Final Thoughts
If you sell digital services in Canada, the rules are simple: once your sales pass $30,000 in a year, you need to register for GST/HST. This is true whether you’re a freelancer, selling online products, or even living outside Canada. Keep track of every sale, month by month, so you know when to act. With SAL Accounting helping you, staying compliant is easy, and you can focus on running your business without worrying about penalties.
Digital Services GST Threshold in Canada: Frequently Asked Questions
1. What is the GST limit for freelancers in Canada?
If you’re a freelancer or independent contractor, you must sign up for GST/HST once your total taxable sales to Canadian clients go over $30,000 in any 12-month period. Including services like digital products and even sales from outside Canada. Check the CRA digital services tax rules for details
2. Does the $30,000 limit apply to online services?
Yes. Services delivered online, for e.g. SaaS subscriptions or coaching, apps, are included in that total.
3. Is the GST threshold based on revenue or profit?
It is based on total revenue, not profit. Every taxable sale counts, whether it comes from Canada or another country.
4. When should I start charging GST/HST?
You must start charging GST/HST the day after your total sales go over $30,000.
5. What if I reach the threshold in the middle of the year?
Registration kicks in immediately after you cross the $30,000 mark. From that day forward, GST/HST must be added to all taxable sales. Waiting could lead to penalties.
6. Do non-residents have to register too?
Yes. Even while living outside Canada, you must register if your Canadian sales pass the $30,000 limit. Some non-residents can use a simpler registration process.
7. How do I know when to register?
Keep a simple monthly record of all your sales. Once it starts getting close to $30,000, it’s time to register. You can also talk to SAL Accounting for guidance to avoid mistakes and stay on track.
