Charity expenses in Canada: the complete GST/HST guide for registered charities

A Canadian registered charity recovers GST/HST differently from a business. Most of what a charity supplies is exempt, so most of what it buys can’t support a full input tax credit. Instead, the charity claims the public service bodies’ rebate: half of the GST and federal HST, plus a provincial share that ranges from 50% to 82%. A registered charity also uses a special net tax calculation, remitting 60% of the tax it charges and claiming input tax credits only in limited cases. Get the registration test, the rebate and the net tax method right and the rest is ordinary bookkeeping. This guide walks through the whole ledger with a verdict before the detail. Every figure is sourced to the CRA in the Sources section, retrieved 10 October 2026.

What this guide covers: the small supplier tests, exempt and taxable supplies, donations, the net tax calculation, the public service bodies’ rebate by province, contractor reporting, payroll, and records.

The charity’s ledger at a glance

The rest of this guide walks through each row, and every section opens with its verdict.

Where ExpenseFlow fits

A charity’s purchase ledger is program supplies, rent and utilities, printing for campaigns, event costs and contractor invoices. ExpenseFlow captures each document (email forward, upload or phone), reads the line items and the GST/HST, codes each line with a written reason, and routes anything uncertain to a person before it posts. Its nonprofit check comes from the rules on this page: a line or account that reads as grant-funded, fundraising, appeal, donor-funded, bursary, outreach or beneficiary support is flagged, because a registered charity generally recovers GST/HST through the 50% public service bodies’ rebate rather than full input tax credits, so the line should not be coded as fully claimable. After approval the bill syncs to Xero with the source document attached, or to QuickBooks Online as a coded bill.

What it does not do: it never computes the rebate, never applies the 60% net tax calculation and never decides which supplies are exempt.

The ExpenseFlow for charities and nonprofits page covers these checks across all five countries.

Registration and the small supplier tests

A charity only needs to meet one of two tests to be a small supplier: the $250,000 gross revenue test or the $50,000 taxable supplies test ^[1] . A small supplier generally doesn’t have to register, but may choose to ^[1] . A charity doesn’t need to be registered to claim the public service bodies’ rebate ^[2] , so registration is mainly about the charity’s taxable sales.

Exempt supplies and donations

Most property and services that charities supply are exempt from GST/HST, though some are taxable, including restaurant operations, professional theatre subscriptions and certain admissions ^[1] . GST/HST does not apply to donations and gifts, and a charity can issue official donation receipts for income tax purposes ^[1] . Because exempt supplies don’t support input tax credits, the rebate is how most of a charity’s tax on costs comes back.

The net tax calculation

Registered charities generally remit 60% of the GST/HST they were required to charge, and their input tax credits are limited; for example, they apply to capital or real property used primarily, meaning more than 50%, in the charity’s commercial activities ^[1] . Real property used 50% or less in commercial activities generally gets no input tax credit ^[1] . You can’t claim a rebate on tax for which you claim an input tax credit ^[1] .

The public service bodies’ rebate

Charities can recover 50% of the GST and the federal part of the HST paid or payable on eligible purchases and expenses ^{[1] [2]} . The provincial part rebate is 82% in Ontario and 50% in Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island ^[2] . The rebate covers tax on purchases you can’t claim input tax credits for, not tax on purchases used in commercial activities ^[2] . Claim on Form GST66, with Form RC7066-SCH for the provincial part, and file within four years ^[2] .

Contractors, payroll and records

Charities and non-profits are among those who must report fees for services over $500 in a calendar year, usually on the T4A slip; the CRA’s penalty moratorium for box 048 remains for all industries except trucking ^[3] . For 2026, CPP is 5.95% each for employer and employee on earnings between $3,500 and $74,600 ^[4] , and employers pay EI at 1.4 times the employee rate of 1.63% ^[5] . The GST/HST guide, return guide and record-keeping guide cover the rest.

Common mistakes

• Claiming full input tax credits on program costs ^[1] .
• Missing the 82% Ontario provincial rebate, or applying it in a province where it’s 50% ^[2] .
• Claiming both an input tax credit and the rebate on the same tax ^[1] .
• Registering when the charity is a small supplier with nothing taxable to sell ^[1] .
• Charging GST/HST on donations ^[1] .
• Letting rebate claims lapse past four years ^[2] .