Employee GST/HST rebate
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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 purpose of the GST/HST rebate, 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 Whats records to keep.
What if you paid Quebec sales taxe?
Some of the expenses you paid to earn your employment income may have included Quebec sales tax (QST). If you deducted these expenses from your employment income, you may be able to receive a rebate of the QST you paid. This rebate also applies to the QST you paid on a musical instrument that you use to earn employment income. Claim the QST rebate on line 459 of your Quebec provincial income tax return.
If the QST rebate is for your employment expenses, include the rebate in your income for the year you received it. Report the amount on line 10400 of your federal income tax and benefit return.
If the QST rebate is for a vehicle or musical instrument you bought, it will affect your claim for capital cost allowance in the year you receive the rebate. If this applies to you, reduce the undepreciated capital cost (UCC) of your vehicle or musical instrument at the beginning of the year by the amount of the rebate. Do not include the rebate on line 10400 of your federal income tax and benefit return.
For more information about the QST rebate and Form VD-358-V, Québec Sales Tax Rebate for Employees and Partners, contact Revenu Québec.
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 2024 you received a GST/HST rebate that you claimed for the 2023 tax year, you have to include it on line 10400 of your 2024 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 2023) that is included on his T4 slip for 2024. 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 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
2023-12-31 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 2024 income tax and benefit return. He also attaches Form GST370 to his tax return.
On his 2025 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 2025 that relates to eligible expenses other than CCA. He will then reduce his UCC at the beginning of 2025 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)
Expenses that qualify for the rebate
You can only apply for a rebate of the GST or HST you paid on expenses that you can deduct on your income tax and benefit return. You must have paid the GST or HST before claiming the rebate.
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Non-eligible expenses
Non-eligible expenses include the following:
- expenses on which you did not pay GST or HST, such as:
- goods and services acquired from non-registrants (for example, small suppliers)
- most expenses you incurred outside Canada (for example, gasoline, accommodation, meals, and entertainment)
- certain expenses that you do not pay GST or HST on, such as basic groceries
- expenses that are not subject to GST or HST including insurance premiums, mortgage interest, residential rents, interest, motor vehicle licence and registration fees, and salaries
- expenses you incurred when your employer was not a GST/HST registrant
- expenses that relate to an allowance you received from your employer that is not reported in Part C of the GST/HST rebate application - for example, an allowance that was not included in your income as a taxable benefit because it was a reasonable allowance
- any personal-use part of an eligible expense
- 50% of the GST/HST paid on eligible expenses for food, beverages, and entertainment (for long haul-truck drivers, 20% of the GST/HST paid on these expenses that were incurred during eligible travel periods)
- an expense or part of an expense for which you were reimbursed or are entitled to be reimbursed by your employer
- expenses on which you did not pay GST or HST, such as:
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If you claimed capital cost allowance
You can claim a GST/HST rebate based on the amount of capital cost allowance (CCA) you claimed on motor vehicles, aircrafts and musical instruments on which you paid GST or HST. If you claim CCA on more than one property of the same class, you have to separate the part of the CCA for the property that qualifies for the rebate from the CCA for the other properties.
In most cases, you cannot claim a GST/HST rebate based on the CCA claimed on motor vehicles, aircrafts and musical instruments that relates to any allowance your employer paid you on those properties. However, you can claim a rebate if it relates to an allowance your employer reports in Part C of the GST370, Employee and Partner GST/HST Rebate Application. You cannot claim a rebate based on the CCA claimed on property for which you received a non-taxable allowance.
If you paid GST when you bought your motor vehicle, aircraft or musical instrument, you can claim a rebate of 5/105 of the CCA you claimed on your income tax and benefit return. If you paid HST, you can claim a rebate of 13/113 or 15/115 of the CCA you claimed on your income tax and benefit return, depending on which HST rate applied to the purchase.
In certain cases, you may have to do an additional calculation if you bought your motor vehicle, aircraft, or musical instrument in one province and brought the property into a participating province. For more information, see Situation 5 – Property and services brought into a participating province.
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
- You paid GST/HST to a supplier registered under the Subdivision E of Division II (simplified GST/HST registration regime) of the Excise Tax Act. To obtain confirmation whether a supplier is registered under the simplified GST/HST registration regime by using the GST/HST registry searching tool accessible to the public, go to Confirming a simplified GST/HST account number
- 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.