Most Canadian businesses must register to collect and pay the goods and services tax (GST) and harmonized sales tax (HST) on eligible items. If you are operating a Canadian business and registered for the GST/HST, you will receive a GST rebate for a particular reporting period by claiming it through input tax credits (ITCs) on your GST/HST return.

When you complete your GST/HST return, you declare the amount of GST/HST you collected from various customers and deduct your ITCs from this amount to determine your GST/HST net tax. If the resulting amount is negative, you will get a GST rebate.

To help you maximize your GST recovery, Abio tracks the explicit GST you collect on all purchases made through accounts payable. It also allows you to track the implicit GST on notional items where specific GST/HST amounts are not available. Subsistence amounts your employees incur, such as living out, mileage, turnaround, taxis, and meal amounts all incur GST. The GST can be estimated for per diem amounts on payroll timesheets,

GST/HST Recovery Rules

To ensure the GST recovery is reasonable, you can set up recovery rules for different scenarios.

Example 1: If you have a crew working in a remote location, such as the Alberta oil sands, they’ll be housed in a camp for the duration of the job there. The cost of the camp will be paid through accounts payable purchases. As such, no GST should be recovered for payroll LOA amounts. You can set up a rule to ensure the calculation for GST recovery ignores living out expenses on payroll timesheets.

Example 2: 50% of a business lunch can be deducted from income. GST from the remaining 50% should be recovered. Set up a GST rule that recovers the GST from 50% of meal amounts and apply it to timesheets that include a business lunch.

To enter a GST/HST Recovery rule, navigate to [e] Job Costing, then [u] Set Up, then [d] G/HST Recover Rules Entry.

GST rebate rule
[e] Job Costing | [u] Set Up | [d] G/HST Recovery Rules Entry

For each recovery rule, enter the percent of the cost to apply GST recovery logic to.

GST Rebate rule

Each field on the recovery rule applies to a related field on a payroll timesheet.

GST rebate rule applied to timesheet
[c] Payroll | [d] Timesheet Entry

In the above example, an employee has been paid $20 for a meal, and $30 for a taxi. The GST recovery rule indicates the GST for the full amount of meals and taxis should be recovered. If GST is 5%, then Abio will record that amount of GST for the expenses incurred on this timesheet.