This sample invoice shows an example of billing for a product with Harmonized Sales Tax (HST) being sold by an Ontario business. The HST is charged in provinces that have merged their provincial sales tax (PST) and the federal Goods and Services Tax (GST) into a single tax. Businesses that are do not qualify for the Small Suppliers exemption must charge HST or GST/PST, depending on the province.
Feel free to use this as an invoice template for your own small business; just change the HST rate to the HST rate applicable to your province if necessary.
HST Rates for Various Provinces
Note that this invoice sample is set up for a business in the province of Ontario where the HST rate is 13%. Change the HST rate according to the rate applicable in your province. There are currently five provinces that charge HST:
- Ontario – HST 13%
- Nova Scotia – HST 15%,
- New Brunswick – HST 15% (as of July 1st, 2016)
- Newfoundland/Labrador – HST 15% (as of July 1st, 2016)
- Prince Edward Island – HST 14%.
For tax rates for other provinces that charge PST and GST separately see PST for Small Business.
Information that Has to Be On Your Invoice
Generally, customers need to be informed of the price of the goods and/or services they are purchasing and the amount of the GST/HST they are paying on those goods and/or services. HST, as you see in the sample invoice below, should be listed as one tax rather than broken into its federal and provincial portions.
Invoices for GST/HST registrants need to include more information (so registrants can use them to verify their ITC claims).
According to the Canada Revenue Agency, (RC4022 – General Information for GST/HST Registrants), invoices for goods and/or services for sales between $30 and $149.99 must include:
- your business name
- the date of the invoice
- your Business Number (sometimes called the GST Registration Number)
- the total amount paid or payable
- the total amount of GST/HST charged (except for zero-rated goods and/or services), or a statement that the GST/HST is included and the total rate of tax
- an indication of which items are taxed at the GST rate and which are taxed at the HST rate when you supply some items that are taxable at the GST rate and others that are taxable at the HST rate
Invoices for goods and/or services for sales between $150 or more must also include:
- the purchaser's name (or trading name or the name of their authorized agent)
- a brief description of the goods or services performed
- the terms of payment
Sample Invoice with HST
|From: Cypress Technologies||Invoice Number:||________________|
|Suite 7, 140 Atlantis Drive||Invoice Date:||mm/dd/yyyy|
|Orillia, Ontario L3V 0A8||HST Registration No:||________________|
|To: Sarah's Computer Bin|
|8424 Traders Boulevard E|
|Mississauga, Ontario, L4Z 2H7|
|Attn: Sarah Norgaard|
|HP OfficeJet Inkjet Color Printer||$583.97||1||$583.97|
|Payment Terms: To be paid within 30 days of Invoice Date|
To use this invoice sample, just copy it into Word or some other word processor or spreadsheet application (select the text in a browser and under Windows type CTRL-C to copy and CTRL-V to paste).
You can then substitute your relevant data, using your own customized business letterhead, if you like, and formatting as you desire.
This is a product invoice from one business to another in the same province; if you provide services, rather than sell products, you may wish to use the subheading 'Description of the Work Performed' along with the 'Invoice For' heading.
Make Sure You Specify Payment Terms
Note the statement at the bottom of the invoice, saying that the invoice amount is due within 30 days. You'll often see invoices that say, 'Payable Upon Receipt', but that's just asking for trouble, because you don't necessarily know when your customer or client is seeing the invoice – even if you've emailed it.
Using a specific terms statement like the one on this invoice gives your customer a due date, and helps you to avoid collection problems.
State Your Return Policy if Applicable
If you are selling returnable products you should mention the return policy on the invoice. The return policy should specify:
- whether or not an invoice must accompany returns
- whether the product can be refunded and/or exchanged
- any conditions that apply to damaged or defective goods
- the time limit for returns, for example "items can be returned within 30 days from the date of purchase"
Accounting Software Makes Invoicing Easy
Invoices are even easier to do if you use accounting software. Accounting software designed for small businesses can not only be used as POS (Point of Sale) systems and print out invoices on the spot, but make it easier to calculate and keep track of taxes, such as the GST/HST. There are a number of inexpensive, easy to learn, cloud-based accounting packages available for small businesses.
Other Sample Invoices
- How to Invoice Selling Products With No Taxes (Simple Invoice Sample)
- How to Invoice Selling Services With No Taxes (Simple Invoice Sample)
- How to Invoice With GST (Goods and Services Tax) & PST (Provincial Sales Tax)
For more information on GST/HST, see:
Grappling with the GST/HST
What You Need to Know About Ontario HST
GST/HST Zero-Rated vs. Exempt Goods and Services
HST & Intangible Personal Property
Charging HST on Services