Set up sales tax collection in Shopify
Shopify charges tax only in the regions where you turn collection on. Before you switch anything on, register with the tax authority for each region where you owe tax, so you have a tax number to enter. This tutorial turns on collection for a Canadian store, first for Canada and then for one province at a time.
Written · Shopify admin, desktop steps · 5 minutes read
The worked example
| Store | British Columbia, Canada |
| Step | Settings > Taxes and duties > Canada |
| GST/HST registration | Over $30,000 CAD in taxable sales |
| $120.00 order, British Columbia | GST $6.00 + PST $8.40 = $134.40 |
| $120.00 order, Ontario | HST $15.60 = $135.60 |
| $120.00 order, Alberta | GST $6.00 = $126.00 |
Download the record: tax-setup-checklist.csv (228 bytes).
A checklist of the regions in this tutorial, with the tax lines on a $120.00 order and the order total for each. Use it to confirm each region shows the right total before you start selling there.
1Decide whether you need to charge tax
If you are not sure whether you owe tax, ask your local tax authority or a tax professional. If you do need to charge tax, register with the tax authority for that region first. You only need to set up your tax regions in Shopify one time, after you have registered.
2Open Taxes and duties
From your Shopify admin, go to Settings > Taxes and duties. This is the page where every region, registration number, override, and exemption lives.
3Pick your country or region
In the Manage sales tax collection section, click your country or region. For this store, click Canada. The regions you collect in are listed here, and each one can be turned on separately.
4Click Collect sales tax and enter your tax number
Click Collect sales tax. In Tax number, enter your tax number. If you have applied for a tax number but do not have one yet, leave the field blank and update it when the number arrives.
5Click Collect tax
Click Collect tax. Shopify now calculates tax for orders shipped to that region. Repeat the same steps for each extra region where you are registered, such as a province with its own provincial tax.
6Check the total on a real order
Place a test order or open a recent order and confirm the tax lines match the rates for the shipping address. A $120.00 order shipped to British Columbia should show GST of $6.00 and PST of $8.40, for a total of $134.40. The same order shipped to Ontario shows HST of $15.60, for a total of $135.60.
The arithmetic
Tax follows the shipping address, so the same $120.00 order carries a different total in each province:
| Order shipped to | Tax lines | Tax | Customer pays |
|---|---|---|---|
| British Columbia, GST 5% + PST 7% | $6.00 + $8.40 | $14.40 | $134.40 |
| Ontario, HST 13% | $15.60 | $15.60 | $135.60 |
| Alberta, GST 5% | $6.00 | $6.00 | $126.00 |
| Saskatchewan, GST 5% + PST 6% | $6.00 + $7.20 | $13.20 | $133.20 |
A Canadian store generally needs a GST/HST account once taxable sales pass $30,000 CAD over the past four completed calendar quarters or over the current calendar quarter. Below that level, registration is usually not required. Check your own sales against that threshold before you collect.
Held at the counter
Tax collection is not automatic. Shopify charges tax only in the regions where you turn collection on. Until you add a region, orders shipped there carry no tax at all, even if your store charges tax everywhere else.
Register before you collect. You need a tax number from the authority for the region. You may leave the field blank while you wait for a number you applied for, but collecting tax without being registered is a problem you cannot fix by editing the setting later.
The rate follows the shipping address. An Ontario store shipping to Alberta charges 5% GST on that order, not 13% HST. The rate is decided by where the order goes, not by where your store sits.
Sources
- Setting up taxes — Shopify's help pages: the six setup steps, the tax number field, and the note that you only set up your tax regions one time.
- Basic Tax service in Canada — Shopify's help pages: the $30,000 CAD GST/HST registration threshold and the provinces that charge a separate provincial tax.