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How to Set Up Sales Taxes in QuickBooks Online

Step-by-step instructions for setting up GST/HST, PST, and QST in QuickBooks Online for Canadian businesses.

QBO has a built-in sales tax centre for Canadian businesses that tracks what you collect, what you owe, and helps you file. This article walks through setting it up correctly for your province.

What You Will Need

  • Access to QuickBooks Online
  • Your GST/HST registration number (from your CRA Business Number confirmation)
  • Your PST/QST registration number, if applicable (from your provincial registration)
  • Knowledge of which province(s) your customers are in

Normal Procedure


Step 1: Open the Sales Tax centre

  1. Go to Taxes in the left menu.
  2. Click Set up sales tax if you have not configured it yet, or Manage sales tax if you are editing an existing setup.

Step 2: Add your GST/HST registration

  1. Click Add tax or Edit next to your existing federal tax setting.
  2. Select your province — QBO will automatically populate the correct rate (GST only, or HST at the blended rate).
  3. Enter your GST/HST registration number.
  4. Set your filing frequency (monthly, quarterly, or annually — match this to what the CRA has on file for you).
  5. Set your filing period start date.
  6. Click Save.

Step 3: Add PST/QST if applicable

If you are in BC, Saskatchewan, Manitoba, or Quebec:

  1. In the Sales Tax centre, click Add tax again.
  2. Select the provincial tax type (PST, RST, or QST).
  3. Enter your provincial registration number.
  4. Set the filing frequency and start date for the provincial return.
  5. Click Save.

Step 4: Confirm tax codes on your products and services

QBO applies tax codes to transactions based on your product and service items. After setting up your tax rates:

  1. Go to Settings > Products and Services.
  2. Open each item and confirm the correct tax code is applied (e.g., taxable, zero-rated, or exempt).
  3. QBO will use these codes to calculate tax automatically on invoices and bills.

Abnormal Procedures

You have been issuing invoices without tax and need to go back and add it.

This is a significant correction and should be handled carefully. The invoices you have already sent to clients may need to be re-issued. Your Mesa CPA bookkeeper and advisor will determine the best approach, including whether back-remittances are owed to the CRA.


You sell to customers in multiple provinces with different tax rates.

QBO can handle multi-provincial tax if configured correctly. The tax applied depends on where the customer is located (the "place of supply" rules). This setup is more complex — work with your Mesa CPA team rather than configuring it yourself.


Your province charges PST on some items but not others.

PST rules vary widely by province and by what you are selling. Configure product-level tax codes carefully and confirm with your Mesa CPA advisor which of your products or services are subject to PST.


Your QBO tax settings do not match what you registered with the CRA.

The filing frequency and start date in QBO must match your CRA registration exactly. If they are off, your QBO returns will not reconcile with what the CRA expects. Contact your Mesa CPA bookkeeper to realign them.


FAQ

Does QBO file my returns automatically?

No. QBO tracks and calculates what you owe, but you still need to log in, review the return, and submit it (either through QBO's built-in filing or directly on the CRA portal). Your Mesa CPA team handles this for you.


What is a tax code vs. a tax rate?

A tax rate is the percentage (e.g., 5% GST). A tax code is a label that tells QBO how to treat a transaction (e.g., "Taxable," "Zero-Rated," "Exempt," "Out of Scope"). When you enter a transaction, QBO uses the tax code to determine which rate (if any) to apply.


I forgot to add my GST/HST number to past invoices. Does that matter?

For registered businesses, your GST/HST number must appear on invoices over $30. If it is missing from past invoices, you can update your QBO settings so it appears going forward. For past invoices that were already sent, you may want to resend corrected copies — especially for B2B clients who need your number to claim their ITCs.


Can I use QBO to file my PST return as well?

It depends on the province. QBO supports CRA integration for GST/HST filing. For provincial taxes (BC PST, Manitoba RST, etc.), you typically file directly with the province — QBO helps you track the amounts but filing happens on the provincial website.