HST Calculator Ontario
Quickly and accurately calculate the Harmonized Sales Tax (HST) for goods and services in Ontario. Understand your total costs instantly.
functions Mathematical Formula
Formula for HST Calculation
The Harmonized Sales Tax (HST) is calculated based on the price of the good or service before tax and the applicable HST rate.
HST Amount = Price Before Tax × (HST Rate / 100)
Total Price = Price Before Tax + HST Amount
Understanding HST in Ontario
The Harmonized Sales Tax (HST) in Ontario is a consumption tax applied to most goods and services. It was introduced in 2010, combining the federal Goods and Services Tax (GST) and the provincial Retail Sales Tax (PST) into a single, unified tax. This means consumers pay one tax at the point of sale, simplifying the process for both buyers and sellers across the province.
How HST Works and its Current Rate
In Ontario, the current HST rate is 13%. This rate is comprised of a 5% federal portion (GST) and an 8% provincial portion (PST). When you purchase a taxable good or service, the HST is added to the price before tax. For example, if an item costs $100 before tax, an additional $13 HST will be charged, bringing the total to $113.
HST Exemptions and Zero-Rated Items
While HST applies to most transactions, there are important distinctions:
- Zero-rated items: These are taxable at 0%. Businesses don't charge HST, but can claim input tax credits. Examples include basic groceries, prescription drugs, and certain medical devices.
- Exempt items: These are not subject to HST, and businesses cannot claim input tax credits on related expenses. Examples include financial services, educational services, and used residential housing.
Impact on Consumers and Businesses
For consumers, the HST means a straightforward 13% tax on most purchases, affecting their overall cost of living. For businesses, HST streamlines tax collection and remittance, reducing administrative burdens associated with separate federal and provincial taxes. Registered businesses can claim input tax credits (ITCs) for the HST paid on their business expenses, offsetting the HST they collect from customers.
Frequently Asked Questions
Frequently Asked Questions about HST in Ontario
What does HST stand for?
HST stands for Harmonized Sales Tax. It is a consumption tax that combines the federal Goods and Services Tax (GST) and the provincial sales tax (PST) into a single tax.
What is the current HST rate in Ontario?
As of the current date, the HST rate in Ontario is 13%. This includes a 5% federal portion and an 8% provincial portion.
Are all goods and services subject to HST in Ontario?
No, not all goods and services are subject to HST. Some items are 'zero-rated' (taxed at 0%, like basic groceries and prescription drugs), while others are 'exempt' (not subject to HST, like financial services and residential rent).
How does HST affect businesses?
Businesses registered for HST collect the tax on their sales and can claim input tax credits (ITCs) for the HST they pay on their business purchases and expenses. They then remit the net amount (HST collected minus ITCs claimed) to the Canada Revenue Agency (CRA) on a regular basis.
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