Canada HST/GST Instructions

This page explains how to use Goldenseal accounting software for the Canadian GST, HST and PST sales taxes.

HINT-- These instructions also apply to most other countries that use a GST or VAT tax on sales and services.

Tax Agency Setup

If you collect HST, GST and/or PST tax or if you receive a credit for GST taxes paid on purchases, set up an Other Cost account for the tax agency. To do so, follow these steps:

  1. Choose Other Costs from the Accounts menu.
  2. Click the New button.
  3. Enter details for the tax agency.

HINT-- The Goldenseal starter files already include a Sales Tax account that you can use for GST.

Tax Setup

To enter GST, HST or PST taxes that you collect from customers, follow these steps:

  1. Choose Income Setup from the Income menu, and choose Sales Tax from the submenu.
  2. Click the New button.
  3. Enter the name of the tax, the tax percentage, and the agency to whom it is paid. NOTE-- For a multipart tax such as Canada HST, you can itemize the different components if you'd like.
  4. Click OK.
  5. If you collect more than one tax rate, repeat steps 2 to 4 for each rate.

NOTE-- Click here if you have to collect more than one sales tax and pay it to more than one agency.

To enter a GST, HST or PST tax that you pay to vendors, follow these steps:

  1. Choose Cost Setup from the Costs menu, and choose Vendor Sales Tax from the submenu.
  2. Click the New button.
  3. Enter the name of the tax and the tax percentage.
  4. Click OK.
  5. If you pay at more than one tax rate, repeat steps 2 to 4 for each rate.

To enter a credit that you receive for the GST you pay to vendors, follow these steps:

  1. Choose Cost Setup from the Costs menu, and choose Vendor Withholding from the submenu.
  2. Click the New button.
  3. Enter the name of the tax, the tax percentage, and the agency to whom it is paid.
  4. In the Calculation method, enter Credit To Agency.
  5. Click OK
  6. If you receive a credit at more than one tax rate, repeat steps 2 to 5 for each rate.

Account Setup

In each Customer and Project account, enter the GST or HST tax that you usually charge. Enter it into the Sales Tax Rate field.

In each Material Supplier, Subcontractor and Other Cost account, enter the GST tax that you usually pay on purchases-- enter it into the Sales Tax Rate field. If you get a credit for GST taxes paid, also enter it into the Withholding field.

GST on Sales

When you enter Sales transactions or project bills, Goldenseal automatically fills in the usual tax rate for that customer. You can change the rate if it is different for this transaction.

GST on Purchases

When you enter Material Purchases, Goldenseal automatically fills in the usual tax rate for that vendor. If you get a credit for GST, it also fills in the credit amount.

Paying Taxes/ Collecting Credits

Goldenseal automatically tracks the amount that you owe for GST collected from customers, and the credit that you receive for GST paid on purchase.

When you are ready to pay GST taxes, follow these steps for the tax that you collected from customers:

  1. Choose Pay Bills from the Bank menu.
  2. Enter Sales Tax into the popup field at upper right.
  3. You'll see a list of tax agencies, and the amount owed to each.
  4. Double-click on the agency to see a detailed list of sales, and taxes due.
  5. To pay taxes, click the Create Checks button. Do not enter a bank account-- just leave the Account field blank and click OK.
  6. Goldenseal will create an Other Cost transaction for the taxes due.

Next, enter the tax credits that you receive for purchases. Follow these steps:

  1. Choose Pay Bills from the Bank menu.
  2. Enter Vendor Withholding into the popup field at upper right.
  3. You'll see a list of tax agencies, and the amount of credit from each.
  4. Double-click on the agency to see a detailed list of purchases and credits.
  5. To enter the credit, click the Create Checks button. Do not enter a bank account-- just leave the Account field blank and click OK.
  6. Goldenseal will create an Other Cost transaction for the amount of the credit.

Finally, you can pay the combined amount of taxes and credits. Follow these steps:

  1. Choose Pay Bills from the Bank menu.
  2. Enter All Other Costs into the popup field at upper right.
  3. You'll see a list of Other Cost vendors.
  4. Click the Create Checks button. Enter a bank account, and click OK.
  5. Goldenseal will write a check for the tax agency, and mark the invoices as paid.