Run a restaurant in Canada and you're already fluent in one alphabet soup — GST, HST, PST, QST. You collect it on almost every sale, hold it, and hand it to the government. Get the rate wrong or tax the wrong thing, and the Canada Revenue Agency (CRA) still wants its cut — out of your own pocket, not the customer's. For an owner already watching labour and food costs, sales tax is one of the most avoidable mistakes on the books, and one of the easiest to fix once you know what the letters actually mean.
This guide explains it in plain terms: what HST is, how it differs from GST, PST and QST, the rate you charge in your province, why the sandwich you serve is taxed but the loaf you sell to take home isn't, and when a new restaurant has to register.
Key takeaways
- HST (Harmonized Sales Tax) combines the 5% federal GST with a province's sales tax into a single rate. It applies in Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island (Canada Revenue Agency, 2025).
- GST is 5% and applies across Canada. In provinces without HST, you charge that 5% GST and, in most, a separate provincial tax on top (Canada Revenue Agency, 2025).
- The rate you charge depends on your province — the CRA calls it the place of supply. It ranges from 5% in Alberta to 15% in the Atlantic HST provinces (Canada Revenue Agency, 2026).
- Prepared food you serve is taxable; basic groceries are zero-rated at 0%. A hot sandwich is taxed; a sealed bag of beans to take home may not be (Canada Revenue Agency, 2010).
- You must register once your taxable sales top C$30,000 over four consecutive calendar quarters — a bar most restaurants clear quickly (Canada Revenue Agency, 2026).
What is HST?
HST stands for Harmonized Sales Tax. It's a single combined sales tax that merges the 5% federal GST with a province's own sales tax into one rate, collected together and reported to the CRA on one return. "Harmonized" is the key word: instead of charging a federal tax and a provincial tax as two separate lines, provinces that joined the HST rolled both into a single percentage.
Five provinces use the HST: Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island (Canada Revenue Agency, 2025). Inside each HST rate sits the same 5% federal part; the rest is the province's share. Ontario's 13% HST, for example, is made up of a 5% federal part and an 8% provincial part (Canada Revenue Agency, 2010).
For you as the operator, the practical benefit is simplicity: in an HST province you deal with one rate, one tax authority, and one return. On the receipt, you show the total HST rate — the CRA is explicit that you should "show the total HST rate" and "do not show the federal and provincial parts separately" (Canada Revenue Agency, 2026).
GST vs HST vs PST vs QST — what's the difference?
The confusion comes from the fact that Canada runs three different sales-tax systems at once, and which one you're in depends entirely on your province. Here's what each acronym means for a restaurant.
- GST — Goods and Services Tax. The 5% federal tax that exists everywhere in Canada. In HST provinces it's baked inside the HST; in the rest, it's charged on its own or alongside a provincial tax.
- HST — Harmonized Sales Tax. GST plus a provincial part, combined into one rate, in the five provinces listed above. One return to the CRA.
- PST / RST — Provincial (or Retail) Sales Tax. A separate provincial tax charged on top of the 5% GST, administered by the province, not the CRA. British Columbia (7% PST), Saskatchewan (6% PST) and Manitoba (7% RST) work this way (Canada Revenue Agency, 2025).
- QST — Quebec Sales Tax. Quebec's own 9.975% tax, charged on top of the 5% GST and administered by Revenu Québec rather than the CRA (Canada Revenue Agency, 2025).
And then there's Alberta, plus the three territories (Northwest Territories, Nunavut and Yukon), which charge the 5% GST and nothing else — no provincial sales tax at all (Canada Revenue Agency, 2025).
The upshot: an HST or GST-only province means one federal return; a PST/RST province means a federal return plus a separate provincial one; and Quebec means dealing with Revenu Québec. Knowing which bucket you're in tells you how many tax accounts you actually have to run.
What GST/HST rate do restaurants charge by province?
The rate you charge is set by where your restaurant is — what the CRA calls the place of supply: "the rate of tax to charge depends on the place of supply. This is where you make your sale, lease, or other supply" (Canada Revenue Agency, 2026). For a restaurant serving guests on-site, that's simply your own province.
| Province / territory | GST or HST you charge | Separate provincial tax |
|---|---|---|
| Alberta | 5% GST | None |
| British Columbia | 5% GST | 7% PST |
| Saskatchewan | 5% GST | 6% PST |
| Manitoba | 5% GST | 7% RST |
| Quebec | 5% GST | 9.975% QST |
| Ontario | 13% HST | — |
| Nova Scotia | 14% HST | — |
| New Brunswick | 15% HST | — |
| Newfoundland and Labrador | 15% HST | — |
| Prince Edward Island | 15% HST | — |
| Northwest Territories, Nunavut, Yukon | 5% GST | None |
Source: Canada Revenue Agency, 2025.
One recent change is worth flagging: Nova Scotia's HST dropped to 14% on April 1, 2025, when the province cut its provincial portion to 9% — "the Government of Nova Scotia decreased the provincial portion of the HST to 9%, resulting in an HST rate of 14% in Nova Scotia" (Canada Revenue Agency, 2026). If your point-of-sale (POS) system still has the old 15% loaded, you're over-charging customers.
Do restaurants charge tax on food? Prepared vs basic groceries
Here's the distinction that trips owners up: not all food is taxed the same way. Basic groceries are zero-rated — "basic groceries are taxable at the rate of zero (0% GST/HST) in every province and territory" (Canada Revenue Agency, 2026). But the moment food is prepared and served for immediate eating, it becomes taxable.
The CRA's own examples make the line clear. "Food or beverages heated for consumption," "sandwiches and similar products other than when frozen," and even "a sale of a bagel or a plain croissant in a restaurant" are all treated as taxable prepared food (Canada Revenue Agency, 2010). A hot coffee, a made-to-order sandwich, a single scoop in a cone — taxable. A sealed bag of coffee beans or a whole unheated loaf you sell to take home can land on the zero-rated side as a basic grocery.
For most sit-down or takeout restaurants this is clean — almost everything you serve is prepared food, so it's taxable. The errors creep in at the edges: a retail shelf of packaged goods, whole cakes or loaves sold to take home, catering, or a deli counter selling both hot and cold items. If that's you, sort your menu into "taxable prepared food" and "zero-rated grocery" once, in writing, and build it into your POS. Guessing item by item at the till is how you end up under-collecting — and owing the difference yourself. For the full walk-through, see our GST/HST compliance checklist for Canadian restaurants.
The Ontario small-order rebate
Ontario has one wrinkle worth knowing. The province gives a point-of-sale rebate of the 8% provincial part of the HST on "qualifying prepared food and beverages" that are ready for immediate consumption, where "the total price, excluding HST, must not be more than $4" (Canada Revenue Agency, 2010). In plain terms: a C$2.50 coffee or a C$4 muffin in Ontario should ring up at just the 5% federal part, not the full 13% HST. Most Ontario POS systems apply this automatically if it's switched on — check that yours does, because it's the customer's money, not yours.
Who collects HST — you or the CRA?
You do. As a registered business you charge the tax, collect it on every taxable sale, and send it to the government. But the money is never yours to spend: "you are responsible to hold the GST/HST in trust until you send it to the Canada Revenue Agency (CRA)" (Canada Revenue Agency, 2026). Treating it as trust money — not cash flow — is the single mental shift that keeps owners out of trouble.
Registration cuts both ways, though. You also claim input tax credits (ITCs) to recover the GST/HST you pay on business purchases — ingredients, packaging, equipment. What you remit each period is the tax you collected minus your eligible ITCs. Keep the records that back it all up: "usually, you must keep your records for six years from the end of the last year to which they relate" (Canada Revenue Agency, 2026).
Delivery-app orders add a twist: when a customer orders through SkipTheDishes, DoorDash or Uber Eats, you still account for the tax on the food you supplied, so reconcile each platform's payout statements against the orders you actually filled. (For what those platforms cost beyond tax, see how much delivery apps cost Canadian restaurants.) Running your own online-ordering page keeps those sales — and their tax records — clean and entirely under your control, which is part of what a tool like DineHere is built to do.
When does a restaurant have to register for GST/HST?
You have to register once you stop being a "small supplier" — that is, once your taxable revenues exceed C$30,000 over four consecutive calendar quarters, or in a single calendar quarter (Canada Revenue Agency, 2026). For any real restaurant that's a low bar; you'll likely need to register from close to day one. Once registered, you charge GST/HST on every taxable sale, full stop — there's no back-and-forth about which customers to charge.
Tax isn't the only CRA rule that catches restaurant owners off guard, either. How you handle tips is a separate trap worth understanding — see controlled vs direct tips in Canada for where payroll and the CRA collide.
Frequently asked questions
What is HST in simple terms?
HST (Harmonized Sales Tax) is a single sales tax that combines the 5% federal GST with a province's own sales tax into one rate. It's used in Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island (Canada Revenue Agency, 2025).
What is the difference between GST and HST?
GST is the 5% federal tax charged across Canada. HST is that same 5% federal tax combined with a provincial part into one harmonized rate, used only in the five HST provinces (Canada Revenue Agency, 2025).
What sales tax do restaurants charge in Ontario?
13% HST. Qualifying prepared food and drinks priced C$4 or less before tax get the 8% provincial part rebated at the till, so you collect only the 5% federal part on those items (Canada Revenue Agency, 2010).
What is the HST rate in Nova Scotia now?
14%. Nova Scotia lowered its HST to 14% on April 1, 2025 when it cut the provincial portion to 9% (Canada Revenue Agency, 2026).
Do restaurants charge tax on takeout food?
Yes. Prepared takeout food is taxed the same as dine-in, at your province's GST/HST rate, because it's ready for immediate consumption rather than a basic grocery (Canada Revenue Agency, 2010).
Is prepared restaurant food taxable when groceries aren't?
Yes. Basic groceries are zero-rated at 0%, but heated or prepared food ready for immediate eating — including non-frozen sandwiches — is taxable (Canada Revenue Agency, 2026).
Do I charge PST or QST on restaurant meals?
It depends on the province. In HST provinces the single HST rate covers everything. In British Columbia, Saskatchewan and Manitoba you charge 5% GST plus a separate provincial tax; in Quebec it's 5% GST plus 9.975% QST, administered by Revenu Québec (Canada Revenue Agency, 2025).
When does a restaurant have to register for GST/HST?
Once your taxable revenues exceed C$30,000 over four consecutive calendar quarters — or in a single quarter — you must register and start charging tax (Canada Revenue Agency, 2026).
Who keeps the HST I collect?
No one keeps it as income — you hold it in trust for the CRA and remit it each reporting period, minus the input tax credits you claim on business purchases (Canada Revenue Agency, 2026).
How should HST show on a receipt?
Show the total HST rate and the tax as a separate line or a clear statement that the price includes it; in an HST province, don't split out the federal and provincial parts (Canada Revenue Agency, 2026).
Once you know which system your province uses and where the taxable-versus-zero-rated line falls, the rest is routine: the right rate loaded everywhere you take money, a clean split between prepared food and groceries, and records that match what you remit. Set it up once across your POS, your card terminal and your own ordering page, and sales tax quietly takes care of itself — leaving you free to worry about the costs that actually need your attention.
