For those who are hiring contractors to carry out a specific job, one question that often comes up is whether or not the contractor charges HST. In Canada, the Harmonized Sales Tax (HST) is a value-added tax that is applied at a rate of 13% to most goods and services offered by businesses.
The answer to whether or not contractors charge HST is not a straightforward one. It largely depends on the type of work that the contractor is doing and the size of their business.
For smaller businesses, those with less than $30,000 in annual sales, they are not required to charge HST. If the contractor you are hiring falls into this category, you will not be charged any HST on the work they carry out for you.
However, for larger businesses, those with more than $30,000 in annual sales, they are required to charge HST on their services. If the contractor you are hiring falls into this category, they will add the 13% HST charge onto their invoice.
It is worth noting that there are some exceptions to this rule. For example, if the contractor is providing services that are exempt from HST, such as some medical or educational services, they would not be required to charge HST.
If you are unsure whether or not the contractor you are hiring charges HST, it is important to ask them directly. They should be able to tell you whether or not they are required to charge HST, and if so, what the amount will be.
In summary, whether or not contractors charge HST largely depends on the size of their business and the type of work they are carrying out. As a customer, it is important to be aware of whether or not you will be charged HST so that you can factor that into your budget and avoid any surprises when you receive the invoice.