Invoicing as a freelancer in Canada

Most of the confusion about freelance invoicing in Canada comes down to one question: do I charge tax, and at what rate? The answer depends on how much you earn, where your client is, and occasionally what you sell. It is genuinely simpler than it looks once the pieces are laid out.

This is general information, not tax advice. Rates and thresholds change, and your situation may have wrinkles this page cannot know about. Confirm anything that matters with an accountant or with the CRA directly.

The $30,000 threshold

You must register for GST/HST once your worldwide taxable revenue passes $30,000 in a single calendar quarter, or across four consecutive quarters. Below that you are a “small supplier” and you are not required to register.

Two things people get wrong about this. First, it is a rolling four-quarter test, not a calendar year — you can cross it in July. Second, it is revenue, not profit; expenses do not come off before the test.

Should you register before you have to?

Often, yes. Registering lets you claim input tax credits — the GST/HST you pay on your own business purchases comes back to you. If you buy cameras, computers, software or anything else with tax on it, that can be worth more than the administrative cost.

The argument against: if your clients are consumers rather than businesses, adding tax makes you more expensive to them, because they cannot reclaim it. If your clients are businesses, the tax is neutral to them and registering is close to free money.

Which rate to charge

This is the part that surprises people: the rate follows your client’s province, not yours.These are the “place of supply” rules. A designer in Calgary billing a client in Toronto charges Ontario’s 13% HST, not Alberta’s 5% GST.

Provinces with a separate provincial sales tax — BC, Saskatchewan, Manitoba and Quebec — may also require you to register for and charge that tax on top, depending on what you sell and whether you have a presence there. Quebec’s QST is administered by Revenu Québec rather than the CRA and is its own registration.

Invoicing a client outside Canada

Services supplied to a non-resident client who is outside Canada are generally zero-rated — you charge 0% GST/HST. That is not the same as being exempt: zero-rated means you still report the sale and you still claim your input tax credits, which is the better outcome.

Put a line on the invoice saying so — “Zero-rated export of services, GST/HST 0%” — rather than silently omitting tax. An invoice with no tax line and no explanation looks like an oversight to whoever reviews it, and to the CRA later.

Getting paid in US dollars

Bill in the currency you agreed and name it explicitly on the invoice — USD, not just $. You report the income in Canadian dollars using the exchange rate on the transaction date. Keep the record of which rate you used; reconstructing it two years later is miserable.

Watch the conversion spread. Banks routinely take 2–3% on an incoming US payment, which on a $5,000 invoice is more than most people’s monthly software costs. A multi-currency account is usually worth the twenty minutes it takes to open.

What a Canadian invoice must show

Once you are registered, your client needs specific information to claim their own input tax credit. For invoices of $30 or more:

• Your business name and the date
• The total amount
• Your GST/HST registration number — the nine-digit business number followed by RT0001
• The amount of tax charged, or a statement that the price includes it

For $150 or more, add the client’s name, the terms of payment, and a description of what was supplied. Leaving the registration number off is the common failure — without it your client cannot reclaim the tax, and they will come back to you for a corrected invoice.

Set money aside as it arrives

The tax you charge is not your money. It is collected on the CRA’s behalf and you remit it — monthly, quarterly or annually depending on your revenue. Freelancers who spend it and find the bill later is the most common way a good year becomes a bad one.

A separate account, funded the day each payment lands, solves it permanently. Put the GST/HST in there and your income tax instalments too.

Late payment is the real problem

Tax is administration. Cash flow is survival. The things that actually move a Canadian freelance invoice from 60 days to 15:

• An explicit due date, written as a date
• A payment link on the invoice, so paying is one press rather than a bank transfer
• An invoice number they can quote back to you
• Sending it the day the work finishes, not at the end of the month

The Bindery invoice generatorhandles Canadian tax the way it should be handled — you name the tax and set the rate yourself, so it is right for your client’s province rather than guessed. It is free, needs no account, and the invoice is built in your browser rather than uploaded anywhere.