In Canada, a car repair is a taxable supply, so you charge tax on the whole invoice, both parts and labour. That’s the big difference from the United States, where many states exempt repair labour. Here, the labour is part of a taxable repair service, so it’s taxed right alongside the parts.
What changes from shop to shop is the rate, which depends on your province. 5% GST in Alberta and the territories, 13-15% HST in Ontario and Atlantic Canada, or GST plus a separate provincial tax in British Columbia, Saskatchewan, Manitoba, and Quebec.
Here’s how GST/HST on auto repair tax in Canada actually works, the current rate for every province, and what your invoices need to show to stay onside with the CRA.
The core rule: tax the whole repair
The Canada Revenue Agency treats car repairs as a taxable supply. Because the labour is part of that taxable service, GST/HST applies to the entire bill, the parts you install, and the work you do to install them. So on a brake job in Ontario, the 13% HST is calculated on parts and labour together, not just the pads and rotors.
This catches US-trained owners off guard. South of the border, repair labour is often exempt. In Canada, it isn’t. If you’re registered to collect GST/HST, you charge it on the full value of the repair.
The rate depends on your province
Canada runs three systems: a combined HST, GST plus a separate provincial sales tax, or GST on its own. Here are the current 2026 rates:
| Province / Territory | Tax type | Total rate |
| Alberta, Yukon, NWT, Nunavut | GST only | 5% |
| Ontario | HST | 13% |
| Nova Scotia | HST | 14% |
| New Brunswick | HST | 15% |
| Newfoundland & Labrador | HST | 15% |
| Prince Edward Island | HST | 15% |
| British Columbia | GST + PST (5% + 7%) | 12% |
| Saskatchewan | GST + PST (5% + 6%) | 11% |
| Manitoba | GST + RST (5% + 7%) | 12% |
| Quebec | GST + QST (5% + 9.975%) | ~14.975% |
Note Nova Scotia: Its HST dropped from 15% to 14% on April 1, 2025, the province’s first rate change in over a decade, so make sure your system is on the current number.
HST provinces vs. GST + PST provinces
In an HST province (Ontario, Nova Scotia, New Brunswick, Newfoundland & Labrador, or PEI), the federal and provincial portions are combined into one harmonized tax, collected and remitted to the CRA as a single amount. Cleaner to bill, cleaner to file.
In a GST + PST province (BC, Saskatchewan, or Manitoba) or in Quebec (GST + QST), you charge two taxes and, in most cases, remit them to two different authorities. There’s a catch worth knowing: the GST/HST you pay on business purchases is recoverable through input tax credits, but provincial PST on vehicle repairs generally is not. It’s a hard cost. That changes the real math on parts and supplies for auto repair shops in those provinces.
When you have to register and charge
An auto repair shop is required to register for GST/HST once its taxable sales pass the $30,000 threshold over four consecutive calendar quarters (or in a single quarter), the small-supplier threshold.
Below that, you can register voluntarily; above it, it’s mandatory. Once registered, you collect tax on every taxable repair and can claim input tax credits (ITCs) to recover the GST/HST you paid on parts, tools, and other business purchases.
What your invoice has to show
The CRA expects a few things on a tax invoice:
- Your GST/HST registration number.
- The tax is shown as a separate line or a clear statement that the total includes GST/HST.
- The usual repair details: see what goes on an auto repair invoice for the full field list.
Listing the tax clearly isn’t just compliance. It’s what lets a business customer claim their own input tax credit on the repair.
A couple of exceptions
- Vehicle modifications for persons with disabilities. Modification services and the related parts, like installing an auxiliary driving control, are zero-rated (taxed at 0%).
- Insurance. The insurance payout and your customer’s deductible aren’t taxed, but the repair the payout covers still is. The insurer typically pays the shop the repair cost plus tax directly.
How to set it up
The practical fix is simple: set your auto repair shop’s province once so the right rate applies automatically, show your GST/HST number on every invoice, and keep parts and labour itemized. When your auto repair invoicing software handles the provincial rate and the tax breakdown for you, every invoice is CRA-ready without manual math. (Operating in the US instead? See sales tax on auto repair in the US, where repair labour is treated differently.
Frequently asked questions
How do you charge GST on auto repair labour or HST on labour for auto repair in Canada?
Yes. A car repair is a taxable supply, so GST/HST applies to both the parts and the labour. Unlike many US states, Canada does not exempt repair labour.
What is the car repair sales tax in Canada?
It depends on your province: 5% GST in Alberta and the territories; 13% in Ontario, 14% in Nova Scotia, and 15% in New Brunswick, Newfoundland & Labrador, and PEI; and GST plus a provincial tax in BC (12%), Saskatchewan (11%), Manitoba (12%), and Quebec (about 14.975%).
When do I have to register to charge GST/HST?
Once your taxable sales exceed $30,000 over four consecutive calendar quarters or in a single quarter. Below that, you’re a small supplier, and registration is optional.
Can I claim back the tax I pay on parts?
You can recover the GST/HST on business purchases through input tax credits once registered. Provincial PST in BC, Saskatchewan, and Manitoba is generally not recoverable.
Does my invoice need my GST/HST number?
Yes. A compliant tax invoice shows your GST/HST registration number and the tax as a separate line or a clear statement that the total includes it.
