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 2023 you received a GST/HST rebate that you claimed for the 2022 tax year, you have to include it on line 10400 of your 2023 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.
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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 2022) that is included on his T4 slip for 2023. 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. Because of space limitations, the entire form is not reproduced.
Statement of Employment Expenses 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 below)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 (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 $1,000) 1770 9 Apprentice mechanic tools expenses 9131 10 Labour mobility deduction (see chart for line 11 on page 2) (maximum $4,000) 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
(see chart for 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 Line 3 – Calculation of allowable motor vehicle expenses Description of the vehicle and expenses Amount Line Enter the make, model and year of motor vehicle used to earn employment income Dodge 2020 n/a Enter the number of kilometres you drove in the tax year to earn employment income 22,500 18 Enter the total number of 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 electricity3,230.55 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 Enter the motor vehicle expenses you paid for: Capital cost allowance (see Parts A and B) 8,644.50 25 Enter the motor vehicle expenses you paid for: Interest expense 1,850.19 26 Enter the motor vehicle expenses you paid for: Leasing costs n/a 27 Enter the motor vehicle expenses you paid for: Other expenses (please specify) 84.50 28 Add lines 21 to 28 15,737.41 29 Employment-use portion
Line 20 multiplied by line 29=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 above11,803.06 32 Part B – Class 10.1 (list each passenger vehicle on a separate line)
Date acquired
Cost of vehicle1
Class number2
UCC at the
start of the year3
Cost of additions
in the year4
Proceeds of disposition
in the year5
Base amount for
CCA6
CCA Rate %7
Capital cost allowance
for the year
(col. 5 multiplied by col. 6, or a lower amount)TOTAL
8
UCC
at the end of the year
(col. 2 minus col. 7, or col. 3 minus col. 7)TOTAL
2022-12-31 34,000.00 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, 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:
Chart 1 – Eligible expenses (other than CCA) on which you paid GST/HST 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% HSTAccounting 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 (for employees) 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: Fuel3,230.55 807.64 1
2,422.91 Maintenance and repairs 467.67 116.92 2 350.75 Insurance, licence, registration, and interest 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 Chart 2 – GST/HST paid on expenses on which you claimed Capital Cost Allowance (CCA) 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% HSTCapital Cost Allowance (CCA) on motor vehicles, musical instruments, and aircraft
8,644.50 2,161.13 4 6,483.37 Total of eligible expenses (other than CCA) in column 3 = 4,418.25.
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) = $2,161.13
Sam did not enter any amounts in the black areas, since these expenses are not eligible for the rebate.
Sam copies the amounts from the "Total eligible expenses" lines of column 3B of Chart 1 to column 3B of line 5 in Part B of Form GST370, and column 3B of Chart 2 to column 3B of line 6 in Part B, and completes it as follows:
GST rebate for eligible expenses on which you paid GSTEligible expenses, other than CCA, on which you paid the GST (total of column 3A of Chart 1 on page 4 of this form)$ Blank space for dollar valueLine 1Eligible CCA on motor vehicles, musical instruments, and aircraft for which you paid the GST (from column 3A of Chart 2 on page 5 of this form)$ Blank space for dollar valueLine 2Total expenses eligible for the GST rebate (line 1 plus line 2)Line 64850$ Blank space for dollar valueLine 3Eligible GST - multiply line 3 by 5/105$ Blank space for dollar valueLine 4HST rebate for eligible expenses on which you paid the HST3B - 13% HST3C - 15% HSTEligible expenses, other than CCA, on which you paid the HST (totals of each of columns 3B, and 3C, of Chart 1 on page 4 of this form)$4,418.253C - 13% HST column Line 5Eligible CCA on motor vehicles, musical instruments, and aircraft for which you paid the HST (columns 3B, and 3C, of Chart 2 on page 5 of this form)$6,483.373C - 13% HST column Line 6Total (add lines 5 and 6 in each of columns 3B, and 3C)$10,901.623C - 13% HST column Line 7Total eligible expenses for the HST rebate (add the totals of column 3B, and 3C together from line 7)Line 64857$10,901.62Blank space for dollar valueLine 8Multiply column 3B line 7 by 13/113$1,254.17Line 9Multiply column 3C line 7 by 15/115$ Blank space for dollar valueLine 10Total (add lines 9, and 10). For more information to complete this section, see GST/HST rebate for employees and partners or Guide T4044.$1,254.17Line 11Total expenses eligible for the HST rebate (from line 4 in Chart 3 on page 5)Line 64860Blank space for dollar valueLine 12Rebate for property and services brought into a participating province Enter the result from line 9 in Chart 3 on page 5 of this form.$ Blank space for dollar valueLine 13Employee and partner GST/HST rebate (add lines 4, 11 and 13). Enter the result on line 14, and enter that amount on line 45700 of your income tax and benefit return.$1,254.17Line 14Since 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 2023 income tax and benefit return. He also attaches Form GST370 to his tax return.
On his 2024 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 2024 that relates to eligible expenses other than CCA. He will then reduce his UCC at the beginning of 2024 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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