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Payroll and the HST

Some of the individuals who receive payment for services from the University will be required to collect the Harmonized Sales Tax (HST) in respect to those payments.

This section identifies those payroll transactions for which the collection of HST is not required, and those for which it is.

Payments Not Subject to HST

Payments Subject to HST

HST Implications

More on the HST and Contact Information


Payments Not Subject to HST

  • employment income
    • salaries
    • wages
    • overtime payments
    • stipends
    • bonuses
  • scholarships, fellowships and bursaries


Payments Subject to HST

Individuals providing the following services are required to collect and remit HST to the Canada Revenue Agency in respect to those services unless the individual is a small trader as defined under the GST Act (see Small Trader’s Certificate):

  • Contract services:
    • short courses, seminars
    • consultant’s services
    • performances
    • guest lectures (including non-residents)
    • other services
  • Research payments:
    • U of T research grants (self-funded research not to be confused with external research grants)
    • secondary research contracts
  • Royalties


HST Implications

If the individual is required to collect and remit HST, the amount paid to the individual will have to include GST.

If the individual is being paid $10,000 for services, the cheque paid to the individual will be $11,300 ($10,000 plus 13% HST). The charge to the paying department, however, will be net of the GST and OVAT rebates to which the University is entitled:

$10,341: $10,000 + (1300 – 335-624)

Small Trader Threshold
If the individual’s annual Canadian taxable and zero-rated sales do not exceed $30,000, the individual is not required to collect HST, unless the person has otherwise elected to register and collect HST.

Small Trader’s Certification Form is required to be completed and kept on file.

Where the individual’s annual Canadian HST taxable and zero-rate sales exceed $30,000, the individual is required to register with Canada Revenue Agency, and collect and remit HST. To register for a Business Number and one or more Canada Revenue Agency accounts, see the CRA website:



More on HST and Contact Information

For a more detailed treatment of HST on payments made through the payroll system, please refer to the U of T GST Manual, Section XI (treatment of HST and GST is, for the most part. very similar)

For more information on the HST, please contact Accounting Services, Financial Services Department at 416-978-8185.

Last revision June 2010