The GST/HST PSB rebate: what Canadian charities are owed — and how to claim it

The GST/HST Public Service Bodies’ (PSB) rebate lets an eligible registered charity recover part of non-creditable GST/HST on expenses such as taxable office rent, software subscriptions, and professional fees. The federal charity rate is generally 50%, with a separate provincial rebate in participating provinces.

What the PSB rebate is

Canada’s GST/HST system taxes most commercial purchases. Businesses recover the tax they pay through Input Tax Credits (ITCs) — they claim back the GST/HST on their business inputs. Charities and qualifying NPOs generally cannot claim ITCs in the same way, because most of their activities are exempt from GST/HST. The PSB rebate is the substitute mechanism: a partial recovery of the HST paid on purchases, available specifically to public service bodies.

The rebate is not an exemption. Charities still pay HST at the point of purchase. The rebate is claimed afterward, on a periodic filing cycle, to recover the eligible portion.

Who qualifies and at what rate

Registered charities — organizations with a CRA charitable registration number — generally qualify at the 50% federal rebate rate. No qualifying-NPO funding test is required.

Not-for-profit organizations that are not registered charities qualify at the 50% federal rebate rate, but only if they pass the qualifying NPO test. The test requires at least 40% government funding under the CRA’s PSB rebate rules. NPOs that don’t meet the threshold receive no federal PSB rebate.

Provincial rebates

The HST in participating provinces is split between a 5% federal component and a provincial component. Outside Quebec administration, the provincial rebate is generally reported on RC7066-SCH. Revenu Québec administers most GST/HST and QST PSB rebate claims in Quebec using its own forms; selected listed financial institutions follow different filing rules.

Province	Provincial HST rate	Charity rebate on provincial portion
Ontario	8%	82%
Nova Scotia	9%	50%
New Brunswick	10%	50%
Newfoundland and Labrador	10%	50%
Prince Edward Island	10%	50%

Charities operating only in GST provinces (Alberta, BC, Manitoba, Saskatchewan) claim only the federal 50% on the 5% GST — there is no provincial component in these provinces.

On a $100,000 annual taxable expense base in Ontario, missing the provincial rebate alone means leaving approximately $6,560 per year unclaimed. Over four years, that’s more than $26,000. Rates can change, so confirm the current CRA RC4034 table before filing.

What expenses are eligible

The rebate applies to eligible non-creditable GST/HST. Tax paid on inputs used in exempt charitable activities is often the core of a PSB rebate claim because those activities generally do not support input tax credits. Examples can include:

• Office rent (commercial leases with HST)
• Software and technology subscriptions
• Professional fees (legal, accounting, consulting)
• Office supplies and equipment
• Event costs with HST

Amounts generally excluded include:

• tax already claimed or claimable as an input tax credit or another rebate
• purchases on which no GST/HST was charged because the purchase itself was exempt or zero-rated
• ineligible amounts identified in RC4034, including amounts affected by special restrictions

The regular method starts with eligible non-creditable tax charged. A claimant must remove input tax credits and other recoveries, apply any special restrictions, and use the federal and provincial factors that apply to the claim period and activities.

How to calculate the rebate

For a simple charity in Ontario with no commercial activities, no input tax credits, and eligible expenses only:

1. Total the HST paid on all eligible purchases in the claim period
2. Split the total HST between the 5% federal part and the 8% Ontario provincial part
3. Identify the provincial HST portion: total HST × (8 ÷ 13) for Ontario
4. Multiply that provincial amount by 82% (Ontario provincial rebate rate)
5. Add federal and provincial amounts — that is the total rebate for the period

Example: A charity in Ontario pays $20,000 total HST on eligible expenses in a year.

• Federal: $20,000 × (5/13) × 50% = $3,846
• Ontario provincial portion: $20,000 × (8/13) = $12,308 × 82% = $10,092
• Total recoverable: ~$13,938

The calculation becomes more complex if the charity has a mix of taxable and exempt activities, or if it is a GST/HST registrant also claiming ITCs on commercial activity inputs.

How to file

Non-registrant charities (not registered for GST/HST): Outside Quebec administration, file GST66 with RC7066-SCH where applicable. Non-registrants generally have two claim periods per fiscal year. Quebec organizations should use the Revenu Québec filing route that applies to them.

Registrant charities (registered for GST/HST and filing regular returns): The PSB rebate is claimed on line 111 of the GST/HST return, with the GST66 schedule attached. ITCs on any commercial activity inputs are claimed separately on the same return.

Filing frequency: For registrants, the rebate period must match the GST/HST reporting period — annual, quarterly, or monthly. For non-registrants, the CRA uses two claim periods per fiscal year.

Recovering unfiled rebates: the backfile

If your charity has never filed the PSB rebate, or has filed it incorrectly, the CRA generally allows a four-year filing window. For GST/HST registrants, the window is measured from the GST/HST return due date for the claim period. For non-registrants, it is measured from the last day of the claim period.

The backfile process:

1. Identify all claim periods within the four-year window
2. Pull bank statements, credit card records, and expense receipts for each year
3. Total HST-bearing purchases by period and calculate eligible amounts
4. File GST66 (and RC7066-SCH where applicable) for each historical period
5. Receive the recovery — federal and provincial rebates are processed separately

For a charity that has been operating for five years without filing in Ontario, with $150,000 per year in eligible Ontario taxable expenses, four years of backfiles can recover roughly $54,000, before considering any ineligible expenses, ITCs, or other rebates.

Common mistakes

Not filing because “we’re not GST registered”: Registration is not required for a registered charity to qualify for the rebate.

Filing the federal rebate and missing the provincial portion: The provincial rebate is on a separate schedule and is not automatically included in the federal GST66. It must be filed on RC7066-SCH.

Using total invoice amounts instead of HST amounts: The rebate applies to the HST portion, not the total purchase. On a $1,000 invoice with $130 Ontario HST, the rebate calculation starts with the $130.

Mixing eligible and ineligible expenses: If the charity has commercial activities and claims ITCs on those inputs, those same inputs cannot also generate a PSB rebate. Double-claiming is an audit risk.

Missing the four-year window: The CRA strictly enforces the filing limitation. Unfiled rebates outside the window are generally forfeited. If you know you have missed filings, the time to act is now.

The examples above assume one province, eligible expenses only, no input tax credits, no point-of-sale rebates, no other rebate entitlement, and no selected public service body or Quebec QST complications. Confirm your claim against CRA RC4034 before filing.