Do I Need to Charge HST as a Coach in Canada (And What Happens If I Don't)

Let's get real for a minute.

You didn't become a coach to become an accountant. You became a coach to help people, and yet here you are, trying to figure out if you need to charge HST in Canada before you accidentally trigger an audit.

If the words CRA, HST threshold, or small supplier exemption make you want to run for the hills, you're not alone. Most new coaches, especially women building online, service-based businesses, find this part of entrepreneurship overwhelming and confusing.

Here's the good news: you don't need a finance degree to get it right. You just need to understand a few key rules that determine when to register for HST, how to stay compliant, and what happens if you don't.

Let's break it down, minus the jargon.

What Is the HST Registration Threshold in Canada?

The HST registration threshold in Canada is $30,000 in total taxable revenue over four consecutive calendar quarters (that's 12 months).

Here's what that really means:

• It's not about your profit. It's your gross sales before expenses.

• It's cumulative. The CRA looks at a rolling 12-month period, not just your January-to-December calendar year.

• It applies to most service-based businesses, including life coaches, business coaches, consultants, and online service providers.

So if you've made $10,000, then $8,000, then $7,000, and then $6,000 in the last four quarters, that totals $31,000, and you're over the line.

Once you exceed the $30,000 small supplier threshold, registration becomes mandatory the day after you pass that amount. You must begin charging GST/HST on that day’s sale and all sales that follow.If you haven't hit $30K yet, keep reading. The small supplier exemption might apply to you.

Do I Qualify for the Small Supplier Exemption?

Here's where many new coaches breathe a sigh of relief.

If your total worldwide taxable revenue (that means all sales before expenses, not just Canadian clients) is under $30,000 in any 12-month period, you are considered a small supplier by the CRA.

This total includes all taxable and zero-rated sales across any business activities you operate under the same ownership, but not exempt income such as employment income or certain health-related services.

This means:

• You don't have to register for HST yet.

• You can register voluntarily if you want (more on that in a bit).

• You should track your revenue carefully because once you cross that $30K threshold, registration becomes mandatory.

Think of it as your "grace period," but one that comes with fine print.

Even if you qualify for the small supplier exemption, it's smart to start preparing early:

• Keep track of your total income. Use a simple spreadsheet or free bookkeeping software.

• Learn how to invoice properly, even before adding tax.

• Understand that once you cross the line, there's no "grace sale." You must charge HST starting with the very next client payment.

The $30,000 threshold doesn’t reset each calendar year. The CRA calculates it using a rolling total across any four consecutive quarters, meaning you must always look at your most recent 12 months of revenue. That means if you earn $5,000 in Q1, $8,000 in Q2, $10,000 in Q3, and $8,000 in Q4, you've hit $31,000, and you're required to register.

It's also important to note that this threshold includes all your taxable revenue, not just coaching income. If you sell digital products, offer consulting, run workshops, or provide any other taxable service, it all counts toward that $30,000 limit.

Pro tip: Start tracking your income from day one, even if you're nowhere near $30,000. It makes life so much easier when you do cross the threshold, and it helps you stay aware of your revenue trends.

When Should You Register for HST in Canada?

Short answer: As soon as you exceed $30,000 in revenue over four consecutive quarters.

Long answer: There are strategic reasons to register voluntarily before you hit the threshold, especially if you're investing in your business.

Here's why some coaches choose voluntary HST registration in Canada:

• You can claim Input Tax Credits (ITCs) on business expenses like Zoom, Canva Pro, website hosting, or software tools. This means you can recover the HST you've already paid on those purchases.

• You'll look more professional, especially if you're invoicing corporate or government clients who expect to see HST numbers.

• You'll avoid scrambling mid-year once you cross the line.

However, voluntary registration means extra admin: filing returns (quarterly or annually), tracking HST collected versus paid, and remitting it to the CRA.

So, if you're brand new, working with only a few clients, or still setting up, it's totally fine to wait. Just monitor your income closely and set a reminder to register once you approach $25K so you don't miss the mark.

When you register, you’ll receive a GST/HST account number, which is linked to your Business Number (BN). It’s the same 9-digit BN followed by “RT0001”. You’ll include this number on every invoice you send to Canadian clients...it’s how the CRA tracks the tax you collect and remit.

Registration can be done online through the CRA's Business Registration Portal, and it typically takes just a few minutes if you have your business information ready.

What Happens If You Don't Charge HST in Canada?

This is where things get real.

If you should have been charging HST but didn't, the CRA will expect you to pay the tax you should have collected, out of yIf you should have been charging HST but didn’t, the CRA can require you to pay the uncollected tax from your own funds, even if your clients already paid the full invoice.our own pocket.

Yep. Even if your clients already paid you. That 13% becomes your responsibility.

Let's say you made $40,000 and didn't register. At a 13% HST rate, you could owe $5,200 to the government, plus potential penalties and interest.

The CRA doesn't play around with sales tax, and they're especially strict with service-based businesses (like coaches, consultants, and designers) who work online.

Here's what can happen if you don't charge HST when required:

• You'll need to register retroactively, often backdated to when you exceeded the $30K threshold.

• You may owe HST on past sales, even if you didn't collect it.

• You might face interest or late filing penalties.

The CRA may review or audit your business if they notice discrepancies or missing filings. If they find that you’ve exceeded the threshold without registering, they can backdate your registration, assess interest on unpaid amounts, and require repayment of the tax that should have been collected. They can apply interest (compounded daily) and late-filing penalties if returns or payments are missed. Rates vary by year, so it’s best to file promptly to avoid extra costs.

The takeaway? It's always cheaper to stay compliant than to fix it later.

Many coaches say, “But I didn’t know!” Unfortunately, the CRA doesn’t accept that as a defence. As a business owner, you’re expected to understand the basics of your tax obligations. Learning them early, even if it feels intimidatingprotects you from costly mistakes later.

How GST/HST Works for Online Coaches in Canada

If you're an online coach serving clients across Canada (or internationally), HST can feel like a mystery. Let's simplify:

Clients in your home province

Charge the HST or GST rate for your province. For example, if you live in Ontario, it's 13%. If you're in Alberta, it's 5% GST only.

Clients in other provinces

You charge the rate for their province, not yours. That's because HST is destination-based, meaning it depends on where your client resides.

For example:

• A coach in Ontario invoicing a client in British Columbia charges 5% GST (BC's rate).

• A coach in Nova Scotia invoicing a client in Ontario charges 13% HST (Ontario's rate).

This can get tricky if you have clients across multiple provinces, but most invoicing software (like Wave, FreshBooks, or even Stripe) can automate this for you once you input your client's location.

Current GST/HST rates by province (2025):

• Ontario: 13% HST

• Nova Scotia, New Brunswick, Newfoundland & Labrador, PEI: 15% HST

• Quebec: GST 5% + QST 9.975%

• Alberta, BC, Saskatchewan, Manitoba, Territories: 5% GST

Clients outside Canada

You generally don't charge HST on sales to clients outside Canada. However, you should still record these transactions as zero-rated exports so you can claim ITCs on related business expenses.

This is where the GST/HST for online coaches in Canada gets confusing, but remember, the CRA sees no difference between an "online" business and a traditional one. If you're coaching Canadian clients and earning over $30K, you're expected to register.

If this makes your head spin, you're not alone. And this is exactly why I built the Coaching to Cash Flow programme: to help coaches set up their businesses right from the start.

Pro Tips to Make HST Less Painful

Here's what I tell every coach I work with:

• Set aside 13% of every payment into a separate savings account. That way, you won't panic at filing time. Treat it like it's not your money, because technically, it's not. You're just holding it for the CRA.

• Track revenue monthly so you know when you're nearing the $30K line. Use a simple spreadsheet, Google Sheets, or free software like Wave.

• Use free or low-cost tools. Wave, Google Sheets, or Notion work just fine for tracking income and expenses in the early stages. You don't need expensive accounting software right away.

• Hire an accountant who understands coaching businesses. Bonus points if they're menopause-aware and get the realities of running a service-based business in midlife.

If you're already over the threshold, don't panic. Register online through the CRA's Business Registration Portal, start charging HST, and file going forward. You'll sleep better at night.

You can also reach out to the CRA directly if you're unsure about your situation. They have a Business Enquiries line, and while wait times can be long, their agents are usually helpful and can walk you through your specific scenario.

Final Thoughts: The Smart Way to Stay Profitable (and Peaceful)

You don't need to be afraid of taxes. You just need to understand them. Charging HST as a coach in Canada isn't about giving more money away; it's about building a business that runs legitimately, profitably, and sustainably.

When you understand the rules, you gain power. Power to price confidently. Power to plan ahead. Power to stop worrying about what you "might" be doing wrong.

And that's what we're really after: peace of mind with profit.

Next Step:

Feeling overwhelmed by HST, pricing, and the financial side of your coaching business?

👉 Inside my Coaching to Cash Flow Program, I walk you through exactly when and how to register for HST, how to set up your invoicing system, and how to stay compliant without the stress. Plus, you'll learn how to price confidently, pay yourself properly, and build simple systems that actually work for your business and your life. Join now and get the clarity and support you need to run a profitable, legitimate coaching business in Canada.

Disclaimer:The information provided in this article is for educational and informational purposes only and should not be construed as financial, tax, or legal advice. While I am a CPA, I am not YOUR CPA. Tax laws, GST/HST regulations, and business requirements vary by province and individual circumstances. Please consult with a qualified accountant or tax professional regarding your specific situation before making any financial decisions for your coaching business.

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