If you are a Canadian Freelancer working for a domestic or foreign business - this is the article for you!
Please review the answers to your most pressing CA Sales Tax questions below:
How do I add sales tax to my bill?
Check out this step-by-step article on adding sales tax to your bill: https://help.worksome.dk/en/articles/4886808-us-canada-adding-sales-tax
How do I know when to charge CA Sales Tax to my bill?
The place of work determines whether CA sales tax should be added, or not. With this being said, domestic sales tax only applies domestically to the region that the freelancer is working for.
For example: As a Canadian Freelancer you can only charge CA Sales Tax when working, or offering your services to a Canadian based business/client. If you are a Canadian Freelancer working for a foreign business/client (US, UK, etc.) you must not charge Canadian sales tax. As long as your services are not re-entering Canada in any way, your foreign client would be exempt from paying Canadian sales tax.
Which percentage rate should I set my CA Sales Tax?
The place of supply will determine the percentage of your CA Sales Tax.
On Worksome, the place of supply is the 'place of work'. Please reference your contract to determine the place of work and adhere to the specific sales tax percentage based on the place of work. An overview over sales tax rates in the various territories can be found here: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-collect-which-rate.html
What's the difference between HST, GST, PST, and QST?
HST generally applies to the same base of goods and services as the GST. The participating provinces (New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island) harmonized their provincial sales tax with the GST to implement the HST.
GST applies to most goods and services made in Canada; however, certain exceptions may apply.
PST is a retail sales tax that is payable when a taxable good or service is acquired for personal or business use, unless a specific exemption applies.
QST is Quebec Sales Tax. The GST and QST are collected on the sale of most goods and services.