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Does a sale agent on commission only need to register for a GST number?

Expert: John R Mott

Kim asked:

I am considering taking a job with a company as a sales agent. My salary will be 100 per cent commissioned based. Will I need to register for a GST number and do I have to charge my employer five per cent of my commission earnings to remit as GST payment?

John R Mott answered:

The form of your compensation is not really relevant to the GST question. The issue is whether you are being hired as an employee or an independent contractor. If payroll source deductions (tax, CPP, EI) will be withheld from your commission pay and if your annual compensation will be reported on a T4 tax slip, then you are an employee. In this case, you have no obligation (or option) to register for the GST. Many employees are on a commission-only arrangement with their employers.

However, if you are not an employee, then you will have to register and collect GST on all your commission earnings. If you live in a province that has harmonized its sales tax with the federal system (or is scheduled to), then you will have to collect the HST.

About the author

John Mott is a chartered accountant and tax specialist with a private practice in mid-town Toronto. He provides tax, accounting and advisory services to individuals and small businesses. He may be visited online at:

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