Employee GST/HST rebate
Topics
New Brunswick, Nova Scotia, Newfoundland and Labrador, Ontario, and Prince Edward Island (PEI) have harmonized their respective provincial sales taxes with the goods and services tax (GST) to create the harmonized sales tax (HST) in each of these provinces. For the rest of this section, the CRA refers to these provinces as the participating provinces.
As an employee, you may have incurred expenses in the course of your employment duties. Some of these expenses you paid may have included GST or HST. If you deducted these expenses from your employment income, you may be able to get a rebate of the GST or HST you paid on these expenses. Complete Form GST370, Employee and Partner GST/HST Rebate Application, and claim the rebate on line 45700 of your income tax and benefit return. For more information, see How to complete Form GST370, Employee and Partner GST/HST Rebate Application.
It is important for you to keep proper records to support your claim for a GST/HST rebate. For more information, see Keeping records.
How a rebate affects your income tax
When you receive a GST/HST rebate for your expenses, you have to include it in your income for the year you received it. Report the amount on line 10400 of your income tax and benefit return. For example, if in 2022 you received a GST/HST rebate that you claimed for the 2021 tax year, you have to include it on line 10400 of your 2022 income tax and benefit return.
If any part of the GST/HST rebate is for a vehicle, an aircraft, or a musical instrument you bought, it will affect your claim for capital cost allowance (CCA) in the year you receive the rebate. If this applies to you, reduce the undepreciated capital cost (UCC) of your vehicle, aircraft or musical instrument by the amount of the rebate at the beginning of the year in which you receive the rebate and do not include that part of the rebate on line 10400 of your income tax and benefit return.
Example
Sam is a commissioned salesperson who negotiates contracts for his employer in Ontario which has an HST rate of 13%. Under his contract of employment, he has to pay his own expenses and is normally required to work away from his employer's place of business. His employer is a GST/HST registrant. Sam received a taxable allowance for the use of his motor vehicle (purchased in December of 2021) that is included on his T4 slip for 2022. Since the allowance is taxable, he can claim a rebate on certain expenses related to that allowance. His travel for work is restricted to Ontario and all of his expenses are incurred within the province.
To calculate his employment expenses, he completed Form T777, Statement of Employment Expenses, as shown below. As this is only an example, the entire form was not reproduced.
| Expenses | Line references |
Amounts | Line |
|---|---|---|---|
| Accounting and legal fees | 8862 | 1 | |
| Advertising and promotion | 8520 | 2 | |
| Allowable motor vehicle expenses (see chart for line 3 on page 2) |
9281 | 11,803.06 | 3 |
| Food, beverages, and entertainment expenses 1,559.68 x 50 % = | 8523 | 779.84 | 4 |
| Lodging | 9200 | 5 | |
| Parking | 8910 | 6 | |
| Office supplies (for example, postage, stationery, ink cartridges, etc.) | 8810 | 178.25 | 7 |
| Other expenses (employment use of a cell phone, long distance calls for employment purposes, etc.) (specify): Cell phone | 9270 | 623.13 | 8 |
| Tradesperson's tools expenses (maximum $500) | 1770 | 9 | |
| Apprentice mechanic tools expenses |
9131 | 10 | |
| Labour mobility deduction (see chart for line 11 on page 2) (maximum $4000) | 1771 | 11 | |
| Musical instrument expenses | 1776 | 12 | |
| Capital cost allowance (CCA) for musical instruments (see « Part A » of this form) |
1777 | 13 | |
| Artists' employment expenses | 9973 | 14 | |
| Add lines 1 to 14 | Subtotal | 13,384.28 | 15 |
| Work-space-in-the-home expenses Enter whichever is less: the amount from line 16 on page 3) |
9945 | 16 | |
| Total expenses Line 15 plus line 16.(Enter this amount on line 22900 of your return) |
9368 | 13,384.28 | 17 |
| Description of the vehicle and expenses | Amount | Line |
|---|---|---|
| Enter the make, model and year of motor vehicle used to earn employment income | Dodge 2019 | n/a |
| Enter the kilometres you drove in the tax year to earn employment income | 22,500 | 18 |
| Enter the total kilometres you drove in the tax year | 30,000 | 19 |
| Line 18 divided by line 19 | = 0.75 | 20 |
| Enter the motor vehicle expenses you paid for: Fuel (gasoline, propane, oil) and electricity |
3,230.55 | 21 |
| Enter the motor vehicle expenses you paid for: Maintenance and repairs | 467.67 | 22 |
| Enter the motor vehicle expenses you paid for: Insurance | 1,200.00 | 23 |
| Enter the motor vehicle expenses you paid for: License and registration | 260.00 | 24 |
| Capital cost allowance (see Parts A and B) | 8,644.50 | 25 |
| Interest expense | 1,850.19 | 26 |
| Leasing costs | n/a | 27 |
| Other expenses (please specify): | 84.50 | 28 |
| Add lines 21 to 28 | 15,737.41 | 29 |
| Employment-use portion Line 29 multiplied by line 20 |
=11,803.06 | 30 |
| Enter the total of all rebates, motor vehicle allowances, and reimbursements for motor vehicle expenses you received that are not included in income. Do not include any repayments you used to calculate your leasing costs on line 27. | 31 | |
| Allowable motor vehicle expenses (line 30 minus line 31) Enter the amount on line 3 above |
11,803.06 | 32 |
Date acquired |
Cost of vehicle |
1 Class number |
2 UCC at the start of the year |
3 Cost of additions in the year |
4 Proceeds of disposition in the year |
5 Base amount for CCA |
6 CCA Rate % |
7 TOTAL |
8 TOTAL |
|---|---|---|---|---|---|---|---|---|---|
| 2021-12-31 | 32,000.00 | 10.1 | 28,815.00 | 0 | 0 | 28,815.00 | 30% | 8,644.50 | 20,170.50 |
Sam is now ready to calculate his GST/HST rebate. To claim the rebate, he has to complete Form GST370, Employee and Partner GST/HST Rebate Application. Sam completes Part A. Before he can complete Part B, he has to complete Chart 1 of Form GST370 to calculate his HST eligible expenses. He also must complete Chart 2 because he is claiming CCA on his motor vehicle. Using the information in Guide T4044, Employment Expenses 2022, he calculates and reports the expenses not eligible for the rebate in column 2B of Chart 1. To calculate the personal-use portion of his motor vehicle expenses, Sam uses the fraction 7,500/30,000. This is the personal kilometres driven (30,000 – 22,500) over the total kilometres driven. He enters this non-eligible portion of CCA in column 2B of Chart 2. He completes Chart 1 and Chart 2 on his Form GST370 as follows:
| Type of expenses Expenses other than CCA |
(1) Total expenses 13% HST |
(2) Non-eligible portion of expenses 13% HST |
(3) Eligible expenses (col. 1 minus col. 2) 13% HST |
|---|---|---|---|
| Accounting and legal fees | 0 | 0 | 0 |
| Advertising and promotion | 0 | 0 | 0 |
| Food, beverages and entertainment | 779.84 | 0 | 779.84 |
| Lodging | 0 | 0 | 0 |
| Parking | 0 | 0 | 0 |
| Supplies | 178.25 | 0 | 178.25 |
| Other expenses (please specify) | 623.13 | 0 | 623.13 |
| Tradesperson's tools expenses (for employees) | 0 | 0 | 0 |
| Apprentice mechanic tools expenses (for employees) | 0 | 0 | 0 |
| Labour mobility deduction | 0 | 0 | 0 |
| Musical instrument expenses other than CCA | 0 | 0 | 0 |
| Artists' employment expenses | 0 | 0 | 0 |
| Union, professional or similar dues | 0 | 0 | 0 |
| Motor vehicle expenses: Fuel |
3,230.55 | 807.64 1 |
2,422.91 |
| Maintenance and repairs | 467.67 | 116.92 2 | 350.75 |
| Insurance, licence, registration, and interest (not eligible for rebate) | 0 | 0 | 0 |
| Leasing | 0 | 0 | 0 |
| Other expenses (Car washes ) | 84.50 | 21.13 3 | 63.37 |
| Work space in home | 0 | 0 | 0 |
| Electricity, heat, water | 0 | 0 | 0 |
| Maintenance | 0 | 0 | 0 |
| Insurance and property taxes (not eligible for rebate) |
0 | 0 | 0 |
| Other expenses (please specify) | 0 | 0 | 0 |
Total of eligible expenses (other than CCA) in column 3 = 4,418.25.
| Type of expenses | (1) Total expenses 13% HST |
(2) Non-eligible portion of expenses 13% HST |
(3) Eligible expenses (col. 1 minus col. 2) 13% HST |
|---|---|---|---|
Capital Cost Allowance (CCA) on motor vehicles, musical instruments, and aircraft |
8,644.50 | 2,161.13 4 | 6,483.37 |
1. $3,230.55 × (7,500/30,000) = $807.64
2. $467.67 × (7,500/30,000) = $116.92
3. $84.50 × (7,500/30,000) = $21.13
4. $8,644.50 × (7,500/30,000) = $2,161.13
Sam did not enter any amounts in the black areas, since these expenses are not eligible for the rebate.
Sam copies the amounts from the "Total eligible expenses" lines of column 3B of Chart 1 to column 3B of line 5 in Part B of Form GST370, and column 3B of Chart 2 to column 3B of line 6 in Part B, and completes it as follows:
Since Sam is claiming a rebate for his motor vehicle expenses for which he received a taxable allowance, an authorized officer of Sam's employer has to complete and sign Part C.
Sam enters $1,254.17 on line 45700 of his 2022 income tax and benefit return. He also attaches Form GST370 to his tax return.
On his 2023 income tax and benefit return, Sam will include $508.29 ($4,418.25 x [13/113]) on line 10400. This amount is the part of the rebate he will receive in 2023 that relates to eligible expenses other than CCA. He will then reduce his UCC at the beginning of 2023 by $745.87 ($6,483.37 x [13/113]).
Do you qualify for the rebate?
As an employee, you may qualify for a GST/HST rebate if all of the following conditions apply:
- you paid GST or HST on certain employment-related expenses and deducted those expenses on your income tax and benefit return
- your employer is a GST/HST registrant
You do not qualify for a GST/HST rebate in either of the following situations:
- your employer is not a GST/HST registrant
- your employer is a listed financial institution as defined in the Excise Tax Act (for example, an entity that was at any time during the year a bank, an investment dealer, a trust company, an insurance company, a credit union, or a corporation whose principal business was lending money)
Filing deadline
You should file your Form GST370, Employee and Partner GST/HST Rebate Application, with your income tax and benefit return for the year in which you deduct the expenses.
If you do not file your rebate application with your income tax and benefit return, send it along with a letter to your tax centre. Include details such as your social insurance number and the tax year to which the application relates.
You have up to four years from the end of the year to which the expenses relate to file an application for a GST/HST rebate.
Rebate restriction
You can only file one Form GST370, Employee and Partner GST/HST Rebate Application, for each calendar year.
You cannot get a rebate of an amount if any of the following apply:
- the CRA previously refunded, remitted, or credited the tax to you
- you received or are entitled to receive a rebate, refund, or remission under any other section of the Excise Tax Act or any other act of Parliament for the same expense
- you received a credit note, or you issued a debit note, for an adjustment, refund, or credit that includes the amount
- the deadline for filing the rebate has passed
Overpayment of a rebate
If you receive an overpayment of a GST/HST rebate, you have to repay the excess. The CRA charges interest on any balance you owe.
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