What Every Canadian NPO Needs to Know in 2025
Operating a Non-Profit Organization (NPO) in Canada goes beyond community impact — it also means staying compliant with federal and provincial tax laws. One area that often causes confusion among NPOs is how GST/HST, Public Service Body (PSB) rebates, and payroll obligations apply to them. This guide provides a practical overview of these essential topics.
Do NPOs Need to Charge or Pay GST/HST?
Many NPOs assume they are fully exempt from GST/HST, but this is not always the case. Whether your organization needs to collect, remit, or pay GST/HST depends on your specific activities.
General Rule:
If your NPO provides goods or services in exchange for payment (even if incidental to your mission), you may be considered to be carrying on commercial activities. If your gross revenues exceed $30,000 in a calendar quarter or over four consecutive quarters, you may be required to register for a GST/HST account with the CRA.
Common examples of taxable activities:
Operating a paid membership program; Selling merchandise at fundraising events; Offering paid classes or workshops; Failing to register and charge GST/HST when required can lead to penalties, interest, and loss of reputation.
Can NPOs Apply for GST/HST Rebates?
Yes! Even if your organization is not required to charge GST/HST, you may still recover a portion of GST/HST paid on your eligible purchases and expenses through the Public Service Bodies’ Rebate (PSB rebate).
Eligibility:
Your NPO may be eligible if it is classified as one of the following:
- A registered charity
- A qualifying non-profit organization (subject to certain tests)
- An organization receiving a significant portion of funding from government sources
Rebate rates vary:
- In most provinces, the federal rebate is 50% of eligible GST paid.
- Additional provincial rebates may be available depending on your province of operation.
- 📝 Accurate recordkeeping is essential — your rebate claim must be supported by proper invoices and receipts.
At Canaan Professional Accountancy, we can help assess your eligibility and prepare & submit your PSB rebate applications, ensuring you maximize your refund potential.
What Are the Payroll Obligations for NPOs?
If your NPO hires staff — whether full-time, part-time, or contract — you are responsible for employer payroll compliance, just like any business.
You must:
- Open a payroll account with the CRA
- Withhold and remit:
- Canada Pension Plan (CPP) contributions
- Employment Insurance (EI) premiums
- Federal and provincial income tax
- File T4 or T4A slips and summaries annually
- Keep detailed payroll records
Missing deadlines or failing to remit payroll deductions can result in serious penalties and CRA audits.
We provide full-service payroll support, including: Calculating payroll deductions; Preparing T4/T4A slips; Issuing pay stubs; Ensuring compliance with CRA and provincial standards.
Get Expert Help for Your NPO
At Canaan Professional Accountancy, we specialize in helping Canadian NPOs meet their financial, tax, and compliance obligations with confidence. Our team understands the unique needs of non-profits — from navigating GST/HST rules to managing payroll and filing rebate claims.