1. What is Commission with GST/HST?

In Canada, commissions are typically subject to GST/HST when paid to independent agents or brokers. This calculator helps determine the total commission amount including the applicable sales tax.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( \text{Sale Price} \) — The total sale amount in Canadian dollars
• \( \text{Commission Rate} \) — The agreed commission percentage
• \( \text{GST/HST Rate} \) — The applicable tax rate in your province

Explanation: The calculator first calculates the base commission, then adds the applicable GST/HST to determine the total amount payable.

3. Importance of Including GST/HST

Details: In Canada, commission payments to independent agents or brokers are generally considered taxable supplies and subject to GST/HST. Proper calculation ensures compliance with tax regulations.

4. Using the Calculator

Tips: Enter the sale price in CAD, commission rate as a percentage (e.g., 5 for 5%), and the applicable GST/HST rate for your province (e.g., 13 for Ontario's HST).

5. Frequently Asked Questions (FAQ)

Q1: What GST/HST rate should I use?
A: Use the rate applicable in your province: 5% (GST only), 13% (Ontario HST), 15% (Nova Scotia, New Brunswick, etc.).

Q2: Are all commissions subject to GST/HST?
A: Generally yes, when paid to independent agents. Employee commissions are handled differently through payroll.

Q3: Who pays the GST/HST on commissions?
A: The party paying the commission must add GST/HST if the recipient is GST/HST registered.

Q4: What if the agent is not GST/HST registered?
A: No GST/HST should be charged if the recipient is not registered, but they may need to self-assess.

Q5: How does this affect my tax filings?
A: The GST/HST collected on commissions must be reported and remitted to the CRA in your GST/HST return.