How to Recover Every Dollar of GST/HST on Your Business Expenses

Here’s something a lot of self-employed Canadians don’t fully appreciate: you can get back every dollar of GST/HST you pay on eligible business expenses. It’s called an Input Tax Credit (ITC), and it’s one of the most straightforward ways to reduce your tax burden.

The catch? You need to know exactly how much tax you paid, on which expenses, and you need receipts to back it up. Most self-employed people leave ITC money on the table because they don’t track tax separately from the total amount.

What Are Input Tax Credits?

When you’re registered for GST/HST (which you should be if your revenue exceeds $30,000, or voluntarily even below that), you charge tax to your customers and remit it to the CRA. But you also pay GST/HST on the things you buy for your business: software, office supplies, professional services, meals with clients.

ITCs let you deduct the tax you paid on business purchases from the tax you collected. If you collected $5,000 in HST from clients and paid $1,200 in HST on business expenses, you only remit $3,800 to the CRA.

That $1,200 is real money. And if you’re not tracking it, you’re paying it twice: once to the vendor, and again to the CRA because you didn’t claim the credit.

Why Most People Don’t Track It

The reason is simple: it’s tedious. Every transaction has a total amount and a tax amount, and they need to be tracked separately. On a credit card statement, the total is one number. The tax breakdown is on the receipt.

So to properly claim ITCs, you need to:

1. Know which expenses are business (not personal)
2. Know the tax rate that applies to each one
3. Calculate or record the tax amount separately
4. Categorize them in a way your accountant can use
5. Have receipts for amounts over $30 (CRA requirement for ITC claims)

Doing this manually for a year of transactions is exactly the kind of work that makes people give up and just claim a rough estimate. The CRA may accept that, until they don’t.

How AllExpensesPaid Makes It Automatic

This is one of the features where AllExpensesPaid really earns its keep.

3-tier tax hierarchy. You set tax rates at three levels: per category, per company, or per user. The system resolves them automatically, with the most specific level winning. Set “Software and Subscriptions” to 13% HST, set “Non-Taxable” categories to 0%, and set your default to your province’s rate. Every transaction gets the right tax calculation without you doing math.

Region presets. Instead of looking up rates, pick your province. Ontario? 13% HST. British Columbia? 5% GST + 7% PST. Alberta? 5% GST. Quebec? 5% GST + 9.975% QST. The presets handle it. US states and international regions are included too.

Business vs. personal separation. Only business expenses are eligible for ITCs. Since AllExpensesPaid organizes every category into Business, Personal, or Other groups, generating a report of just your business expenses with tax totals is one click.

Reports with tax summaries. When you generate a PDF or Excel report filtered to business expenses, it includes category-level tax totals. Your accountant can see exactly how much HST you paid on office supplies, how much on software, how much on meals (remembering that meals and entertainment ITCs are limited to 50%). No manual adding. No guessing.

Receipt attachments. For expenses where the CRA requires documentation (purchases over $30 for ITC claims), you can attach the receipt photo or PDF directly to the transaction. When your accountant needs backup, it’s right there.

A Real Example

Let’s say you’re a self-employed consultant in Ontario. In a typical year you might have:

That’s $1,586 you get back from the CRA. Not a deduction on your income. Actual money back. Every year.

If you’re not tracking tax per transaction, you’re not claiming all of this. You might claim some of it based on rough estimates, but you’re almost certainly leaving hundreds of dollars unclaimed.

Getting Started

1. Register for GST/HST if you haven’t already. It’s free, and you can register voluntarily even under the $30,000 threshold. This lets you claim ITCs.
2. Set your tax region in AllExpensesPaid. Pick your province and the rates are configured automatically.
3. Import your bank statements and let the AI categorize your transactions. Business expenses get tagged to business categories with the correct tax rate.
4. Attach receipts for significant purchases. The CRA requires documentation for ITC claims over $30.
5. Generate your report at tax time. Filter to business expenses, hand the PDF to your accountant. They’ll have category totals and tax summaries ready to plug into your return.

The whole process takes a few minutes a month. The payoff is real money back in your pocket.