Reference
Canadian tax glossary
The sales tax and income tax terms used across GSTAPP.CA, in plain language.
- Average tax rate
- Your total income tax divided by your total income. It is always lower than your marginal rate because lower brackets are taxed at lower rates. Learn more
- Basic personal amount (BPA)
- The amount of income everyone can earn before paying income tax. The federal BPA for 2026 is $16,452, reduced to $14,829 for high incomes; each province sets its own. Learn more
- Business number (BN)
- The 9-digit number the CRA gives a business. Your GST/HST account adds RT and a 4-digit reference, for example 123456789 RT0001. Learn more
- Canada Groceries and Essentials Benefit (CGEB)
- The tax-free quarterly payment that replaced the GST/HST credit in July 2026, for individuals and families with low and modest incomes. Learn more
- CPP and CPP2
- Canada Pension Plan contributions taken from employment income. In 2026, CPP is 5.95% of earnings between $3,500 and $74,600, and CPP2 is 4% of earnings between $74,600 and $85,000. Learn more
- Employment Insurance (EI)
- Premiums deducted from pay that fund EI benefits. The 2026 employee rate is 1.63% on earnings up to $68,900 (1.30% in Quebec). Learn more
- Exempt supply
- A sale with no GST/HST where the seller also cannot claim input tax credits, such as long-term residential rent, most health care and most financial services. Learn more
- GST (Goods and Services Tax)
- The 5% federal sales tax charged on most goods and services across Canada. In French, TPS. Learn more
- HST (Harmonized Sales Tax)
- A single sales tax combining the 5% GST with a provincial part, used in Ontario (13%), Nova Scotia (14%), and New Brunswick, Newfoundland and Labrador and P.E.I. (15%). Learn more
- Input tax credit (ITC)
- GST/HST that a registered business paid on purchases for its commercial activities and can recover by subtracting it from the tax it collected. Learn more
- Land transfer tax
- A one-time tax paid when you buy property. Ontario charges it on all purchases, and Toronto adds a municipal land transfer tax. Learn more
- Marginal tax rate
- The combined federal and provincial tax rate on your next dollar of income. Deductions like RRSP contributions save tax at roughly this rate. Learn more
- Net tax
- On a GST/HST return, the tax you collected minus your input tax credits. A positive amount is remitted to the CRA; a negative amount is refunded. Learn more
- Place of supply
- The rules that decide which province's GST/HST rate applies to a sale — generally where the customer receives the goods or services. Learn more
- Point-of-sale rebate
- An instant rebate of the provincial part of the HST on certain items, such as children's clothing and books in Ontario, so only the 5% federal part is charged. Learn more
- PST (Provincial Sales Tax)
- A separate provincial sales tax charged next to GST in British Columbia (7%) and Saskatchewan (6%). Manitoba's version is the RST (7%). Learn more
- QPP and QPIP
- Quebec's pension plan (6.30% employee rate in 2026) and parental insurance plan (0.430%), which replace CPP and part of EI for Quebec workers. Learn more
- QST (Quebec Sales Tax)
- Quebec's 9.975% sales tax, charged next to the 5% GST on the price before tax. In French, TVQ. Learn more
- Quick Method
- An optional way for small businesses to calculate GST/HST owed by applying a lower fixed rate to tax-included sales instead of tracking input tax credits on expenses. Learn more
- Reporting period
- How often you file GST/HST returns — monthly, quarterly or annually — assigned by the CRA based on your annual taxable sales. Learn more
- RRSP
- A Registered Retirement Savings Plan. Contributions are deducted from income, saving tax at your marginal rate; the 2026 dollar limit is $33,810. Learn more
- RST (Retail Sales Tax)
- Manitoba's 7% provincial sales tax, calculated on the price before GST. Learn more
- Small supplier
- A business with $30,000 or less of taxable sales over four consecutive calendar quarters. Small suppliers do not have to register for GST/HST. Learn more
- Zero-rated supply
- A taxable sale at a 0% rate, such as basic groceries, prescription drugs and exports. The seller charges no tax but can still claim input tax credits. Learn more