How to Record GST/HST on e-Transfer Customer Payments

Record GST/HST from an Interac e-Transfer by matching the completed payment to the sales invoice where the tax was calculated. Keep the sale, GST/HST, customer balance, transfer, and bank deposit as separate fields in one connected record. The payment method does not decide the tax rate or reporting period, and the gross e-Transfer amount should not be posted entirely to sales.

For a typical credit sale, the invoice establishes the sale and tax receivable. The later e-Transfer clears some or all of that invoice. Confirm the exact treatment with the business's accountant because registration status, the type and place of supply, deposits, refunds, bad debts, and special accounting methods can change the result.

Does an e-Transfer Change How GST/HST Is Charged?

No. The Canada Revenue Agency says the rate depends on the type and place of supply, not whether a customer pays by e-Transfer, card, cheque, or another method. A taxable supply may be subject to GST or HST, a zero-rated supply is taxable at 0%, and an exempt supply is not charged GST/HST.

The invoice or receipt should tell the customer whether GST/HST applies, whether it is included in the price or added separately, and the applicable amount or rate. A transfer message such as invoice 1042 is a useful match key, but it is too limited to replace the sales document.

If the business is not registered or is unsure whether it must register, do not infer the answer from the e-Transfer total. Review the CRA's current registration rules and the facts of the supply.

What Should the Payment Record Include?

Create one payment row for each distinct transfer and link it to the sales record. Include:

• Customer and displayed payer name, when different
• Invoice, order, contract, or account number
• Description and place of supply documented on the invoice
• Invoice date and due date
• Subtotal before tax
• GST/HST rate and amount, when applicable
• Invoice total and balance before payment
• e-Transfer amount, initiated date, completed date, and status
• Interac reference number, when available
• Amount applied to the invoice and balance remaining
• Bank-deposit date and account
• Notes for a deposit, partial payment, overpayment, refund, fee, or correction

Keep the invoice and bank record with the payment register. The CRA requires records that support the GST/HST return and describe the goods or services in enough detail to determine how the tax applies.

How Do You Record the Payment From Invoice to Bank?

1. Start with the invoice

Confirm that the invoice identifies the seller and customer, what was supplied, the price, applicable tax, total, date, and payment terms. Business customers may need additional information to support an input tax credit, including the supplier's GST/HST number at the applicable invoice thresholds.

Do not reconstruct the tax by dividing every deposit by a provincial rate. That shortcut fails when an amount covers several invoices, a zero-rated or exempt supply, a deposit, a tip, a fee, or a mixture of taxable and non-taxable items.

2. Verify that the e-Transfer completed

Open the financial institution's known app or website and confirm the deposit. A sent, requested, pending, declined, cancelled, or expired notice is not a completed customer payment.

Record the displayed payer even if it differs from the invoice customer. Then confirm the relationship through a known channel instead of assigning the amount from the name alone. Use the unknown-sender workflow when the payment cannot be matched safely.

3. Apply the amount to the invoice

For an invoice of $1,000 plus $130 HST, a completed payment of $1,130 clears the full receivable. It does not create a second $1,130 sale if the invoice was already recorded. Preserve the $1,000 sale and $130 tax split from the invoice, then record that the customer balance was paid.

If the business records sales only when payment is received under an accounting method it is permitted to use, the entry timing may differ. Keep the invoice and payment dates separately and have the accountant apply the correct method.

4. Reconcile the payment to the bank

Match the payment register to the deposited amount and account. Investigate a notification with no bank deposit, an unmatched bank deposit, a duplicate reference, or a deposit posted to the wrong customer.

The financial institution may charge a separate e-Transfer or account fee. Record that as a bank charge rather than reducing the customer payment or GST/HST collected. See the e-Transfer fee record-keeping guide for business-use limits.

5. Reconcile the GST/HST control totals

At the end of the reporting period, reconcile invoice totals, credit notes, tax collected or collectible, customer balances, completed payments, and bank deposits. The payment register helps explain settlement; the GST/HST working papers and source documents support the return.

Do not assume an unpaid invoice can be left out solely because no e-Transfer arrived. The CRA says the invoice date generally determines when charged GST/HST is reported and that tax for an invoice included in a return must be remitted even if the customer has not paid. Exceptions and bad-debt adjustments require their own review.

How Do Partial Payments and Multiple Invoices Work?

Keep the tax calculation attached to the invoice and allocate each payment explicitly.

• One payment covers part of one invoice: reduce the receivable only by the completed amount and keep the balance open. Follow the partial-payment reconciliation workflow.
• One payment covers several invoices: record one transfer row, then create allocation lines showing the amount applied to each invoice.
• Several transfers cover one invoice: preserve every transfer's date, status, amount, and reference; do not merge their evidence into one fictional payment.
• The payer deducts a bank fee: keep the invoice balance open unless the business agrees to a documented adjustment. A customer's banking cost does not silently change the invoiced tax.
• The customer overpays: record the full deposit and a customer credit or refund based on the facts. Do not increase sales merely to force the balance to zero.

What About Deposits, Refunds, and Bad Debts?

These cases need more than a standard paid-invoice entry:

• Customer deposit or advance: identify what the agreement says and review the GST/HST timing before treating it as an ordinary invoice payment. Use the customer-deposit workflow.
• Refund or price adjustment: preserve the original sale and payment, issue the required credit or debit documentation, and record the refund as a separate transfer. Follow the customer-refund workflow.
• Uncollectible balance: do not mark an invoice paid. The CRA has specific conditions and calculations for a GST/HST bad-debt adjustment after an eligible amount has been written off.
• Recovered bad debt: link the later payment to the written-off balance and review the resulting income and GST/HST adjustment.
• Payment disputed or returned by the bank: use the verified bank outcome. Do not relabel the original deposit from an email alone.

For any material or unusual case, keep the complete timeline and ask a qualified accountant to determine the entry and return treatment.

How TransferLog Helps With GST/HST Payment Reconciliation

TransferLog organizes supported Interac e-Transfer notification records from connected Gmail, Outlook, and iCloud inboxes. You can search and filter payments, add categories, and export CSV or PDF on the Pro plan before matching the notification records to invoices and bank deposits.

TransferLog does not create invoices, calculate or file GST/HST, determine the place or type of supply, inspect bank accounts, post bookkeeping entries, or replace an accountant. Use it to prepare the notification side of the reconciliation, then verify each amount against the source documents.

Official Sources

• CRA: Charge and collect the GST/HST
• CRA: GST/HST records to keep
• CRA: GST/HST and payroll records
• CRA: Remit the GST/HST you collected
• CRA: Instructions for preparing a GST/HST return
• Interac: Business FAQ

Organize customer e-Transfer notifications with TransferLog. Start free, then reconcile the export with your invoices, GST/HST records, and bank account.