How to Set Up HST or GST in QuickBooks Online?

How to Set Up HST or GST in QuickBooks Online?

HST or GST is the sales tax code that can be set up in QuickBooks Online. If your client wants to track a rebate portion of the HST paid for several expenses, setting up the sales tax code can be a smart idea. As you enable the sales tax feature, QuickBooks automatically calculates the sales tax on the receipts and invoices. By setting up the sales tax in QuickBooks, you can easily be aware of the due tax payments. In addition, you can file taxes on time to avoid charges. To take advantage of the sales tax feature, learn with us how to set up HST in QuickBooks Online.

The following discussion will explain how to set up HST in QuickBooks Online using different options. In addition, you will learn to enable the Transfer Sales Tax feature, add custom sales tax rate for agencies, and run HST Detail Report to know how much sales tax you owe.

Set Up HST in QuickBooks Online

In QuickBooks Online, you can set up the sales tax codes (HST) for the non-profit entities similarly as you set up for any profitable business. To get started, you are required to go to the Taxes menu. From there, you can move to the Sales Tax section to manage the sales tax. Thereafter, you can add the type of tax in QuickBooks. We can also go through the following steps to learn how to set up HST in QuickBooks Online:

  • Login to your “QuickBooks Online”.
  • Then, go to the “Taxes” menu located on the left.
  • Here, you can click on the “Sales Tax”.

Note: If you are using Payroll in QuickBooks Online, you should select the Sales Tax option as opposed to the Payroll Tax.

  • Now, click on the “Manage sales tax” option.
  • After this, select the “Add tax” button.
  • You can click on the “Add” button from the “What type of tax do you want to add?” section.
  • At this point, you have to choose any of the options available such as:
    • Group Rate
    • Provincial
    • Custom

Group Rate

  • Businesses may require to group several sales tax items. By selecting this option, you can combine any tax codes that are existing into a combo rate.
  • You can choose this option to set up the sales tax group rate from the “Taxes” menu.
  • If required, you can set up the sales tax rate for Entertainment and Meals as well.

Provincial

  • If you select this option, QuickBooks will set up the new agencies automatically, for example, PST agencies which is the most common code for territory or province.
  • As you choose this option, it prompts you to select the territory or province which can be done by using the drop-down menu. Please note that the province you have not set up yet will be listed.

Custom

  • This is the rarely used option because setting up this type of sales code will not report to any Provincial or Federal Tax Agencies such as Receive General, Canada Revenue Agency, and others. In addition, this option will not be able to help with reporting or filing to these agencies.
  • However, if you choose this option you can easily add a tax code specific to the industry including hotel, gasoline, or tobacco. In addition, you can use this option to track your sales to United States customers.
  • This option can also be used to set up the tax code called “out-of-scope”. This will help in indicating that your expense or sale does not fall under any kind of tax.
  • Please note that the format of custom tax should be in a percentage (%), not in a dollar amount ($).

Once done adding up the HST in QuickBooks Online, you can continue following the instructions displayed on your screen to complete the HST setup.

Enable Transfer Sales Tax Feature in QuickBooks Online

When you successfully set up the sales tax in your account, you are required to enable the Transfer Sales Tax feature. By turning this feature on, you can view the tax details in the transfers. This can be done through the Commerce Sync account. Here are the steps for that:

  • Log in to the “Commerce Sync” account.
  • On the dashboard, you will see the “View” option from the “Settings” section.
  • Now, scroll down and select the “Transfer Sales Tax” option.
  • Here, you need to scroll down to find the “Save” button located at the bottom right.

This should be noted that the tax rate from the Point of Sale will only be mapped to the matching sales tax rate in your QuickBooks Online account. If you are planning to add multiple tax rates on the invoice, you won’t be able to do so because this feature is not supported by QuickBooks Online.

Enter the Custom Sales Tax Rate for the Existing Sales Tax Agency

Users can also manually set up the sales tax rate for the existing sales tax agency such as Canada Revenue Agency, Receiver General, etc. However, there are a few things you need to keep into consideration. For instance:

You can use the custom sales tax rate for the special tax rates and tax rate changes.
It is also suggested to enter the additional tax code instead of changing the existing one. By doing so, you will see all the sales tax rates for a particular agency on the same return.

Now, if you wish to enter the sales tax rate manually for a specific tax agency then you can pursue the steps mentioned below:

  • Navigate to the “Taxes” menu on the left.
  • Then, choose the “Sales Tax” option from the top. If you are using the payroll in your QuickBooks Online account then make sure you choose the “Sales Tax” against the “Payroll Tax”.
  • Here, you need to choose the “Manage sales tax” option.
  • After that, search for the tax agency for which you want to add the new tax rate.
  • Once selected, click on the “Add custom rate” button.

By following the aforementioned steps, you can easily set up the new sales tax code manually for the existing sales tax agency.

Run HST Detail Report to Find Out How Much Sales Tax You Owe

The HST/GST Detail report shows a summary of the taxable sales and non-taxable sales. It also helps you to know the total sales tax collected from your customers. By running the GST/HST Detail report, you can easily know how much sales tax you owe and why you are owing to it. All you have to do is run the report and get the details of your sales tax in QuickBooks Online. This will also help you to ensure that the details are accurate before filing the return to the tax agency.

To run the HST/GST Detail report, you are required to open the Reports section so that you can search for the HST/GST Detail report. After that, you can use the drop-down menus to select the date range and tax agency to run the report. This will show you the total tax amounts with other relevant details. Follow the steps to understand clearly:

  • Click on the “Reports” menu.
  • Then, go to the “Find report by name” field.
  • Here, find the “GST/HST Detail” report”.
  • Once you find it, choose the report.
  • Now, you can click on the “Report Period” drop-down menu. Doing so, you can select the correct range of date, however, it is based on how often the tax has been filed by you.
  • Move on to the “Tax Agency” drop-down menu. Then, click on the “All” button. Alternatively, you can select any one GST agency.
  • Once done, hit the “Run Report” button.
  • At this point, you are supposed to be in the “Tax Amount” column. This column contains the total tax amounts you have collected from the customers. Please note that the total tax amount includes local, regional, or federal tax rates such as county, city, and province.

If you want to view the detailed information for what you owe, you can click on any tax amount. By doing so, you will see a transaction report where you can find out how much tax you have charged for each sale. It also includes other information such as transaction dates, customers, and tax rates.

Winding Up!

QuickBooks automatically perform the sales tax calculation on the receipts and invoices. Such smart features provided by QuickBooks help you with accurate filings. We have already shown you how to set up HST in QuickBooks Online with easy steps. Along with this, we have discussed other information regarding custom sales tax rates and the HST Detail report.

Do you want to know how to use undeposited funds in QuickBooks Online? Read this guide for a better understanding.

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