Freelancers & Online · Edmonton
Charging GST to US clients: zero-rating and US dollars, explained.
Most services you sell to American businesses carry 0% GST, but not all of them, and the US dollars need careful handling too. Here's the general picture.
By the Plum team- Updated Oct 2026
- 7 min read
- Most services sold to US businesses are zero-rated: 0% GST, but you still claim input tax credits.
- Exceptions exist, like work on property in Canada or for a person who is in Canada at the time.
- US sales still count toward the $30,000 registration threshold.
- Record USD income in Canadian dollars at a consistent rate, and track exchange gains and losses.
Plenty of Edmonton freelancers and consultants now earn a good share of their income from American clients. That raises a fair question as soon as you're GST-registered: charging GST to US clients, yes or no? For most services the answer is no, you charge 0%. But "most" is doing some work in that sentence, and the US dollars themselves need handling in your books.
This is a general guide, not tax advice. GST rules for exports have specific conditions, and if your work doesn't fit neatly, confirm with CRA or your accountant. Here's the picture we walk clients through in Edmonton, St. Albert, Sherwood Park and Leduc.
1What zero-rated actually means
GST has three kinds of supplies, and the difference matters:
- Taxable at 5% (or the HST rate where it applies): most services you sell inside Canada.
- Zero-rated: taxable, but at 0%. Most exports of goods and services land here. You still claim input tax credits on your costs.
- Exempt: no GST at all, and no input tax credits. Many health services and residential rents are exempt.
That middle category is the good one. A designer who sells all her work to US companies charges no GST, yet can still claim back the GST she paid on her laptop, software and studio rent. It's why some freelancers with mostly US clients get a GST refund every year.
2When charging GST to US clients is 0%, and when it isn't
In general, a service you supply to a non-resident business that isn't registered for GST/HST in Canada is zero-rated. The common exceptions involve a Canadian connection to the work itself:
| Situation | Generally |
|---|---|
| Design, writing, development or consulting for a US business, delivered remotely | 0% |
| Services to a US individual who is outside Canada while you do the work | Often 0%, but check the specific rules |
| Services to a US individual while they're in Canada | Usually taxable |
| Services related to real property in Canada (a cabin in Jasper, an office in Edmonton) | Usually taxable |
| Work on goods located in Canada | Often taxable, with exceptions for goods being exported |
| A US client registered for Canadian GST/HST | Can change the answer; confirm before invoicing |
If you're not sure which row you fall in, that's exactly the time to ask your accountant or CRA before invoicing, not after. Getting it wrong means either overcharging a client or owing GST you never collected.
Watch for clients that look American but aren't, for GST purposes. A US company's Canadian subsidiary, or a client with an office in Calgary that signs your contract, is a Canadian customer, and your normal 5% GST (or HST, depending on the province) applies. The question is who you're actually supplying the service to under the contract, not where the parent company is headquartered or which currency they pay in. Check the legal name and address on the contract before you set up the client in your bookkeeping software, and set the tax default for that client correctly from the start.
3Save proof the client is outside Canada
If CRA ever reviews your zero-rated sales, you'll need to show why they qualified. File these with each client:
4Recording USD income in your books
Your Canadian tax returns are in Canadian dollars, so every US dollar has to be converted. The simplest reliable method:
1. Use a USD bank account
Let US payments land in US dollars, then convert in larger amounts when the rate suits you. This avoids your bank converting every payment automatically at a retail rate.
2. Turn on multi-currency
QuickBooks Online and Xero both let you invoice in USD and record the Canadian dollar value automatically, using a daily rate. Choose a rate source, such as the Bank of Canada, and stick with it.
3. Track exchange gains and losses
If you invoice $5,000 USD when the rate is one thing and get paid or convert when it's another, the Canadian dollar value changes. That difference is a foreign exchange gain or loss. The software calculates it, but only if payments are matched to invoices rather than entered as plain deposits.
4. Record platform fees separately
Payment platforms like Wise, PayPal or Stripe take fees and sometimes a currency spread. Record the gross invoice, then the fee as an expense, so your revenue isn't understated.
5Common mistakes with US clients
- Charging GST anyway. Adding 5% to a US invoice when the service is zero-rated confuses clients and means you've collected tax you then owe to CRA.
- Leaving US sales off the GST return. Zero-rated sales still get reported on your return, even though no tax is owed on them.
- Assuming every US-related job is zero-rated. An American client renovating a cabin in Jasper, or a US visitor you photograph in Edmonton, can change the answer.
- Recording the bank's converted amount as revenue. Your revenue should be the invoice converted at your chosen rate. Bank spreads and fees are separate.
- Mixing currencies in one account. Converted payments landing in a CAD account with no USD record make reconciling almost impossible.
None of these are hard to fix once you know to look for them, but they're much easier to avoid from the first invoice.
6A word on the US side
US clients will often ask for a W-8BEN (individuals) or W-8BEN-E (corporations). It tells them you're a foreign person, which generally means they don't need to withhold US tax from your payments for work done in Canada. If a client starts withholding, ask why, and talk to your accountant. For contractors working through agencies as well as direct US clients, our IT contractor guide has more on the setup.
Plum handles multi-currency books and GST returns for freelancers and consultants across Edmonton, St. Albert, Sherwood Park and Leduc. If your US income has been entered as one lump sum at whatever the bank gave you, book a call and we'll get it recorded properly.
7Questions people ask
Do I charge GST to US clients?
Usually not. Most services supplied to a non-resident business that isn't registered for GST/HST in Canada are zero-rated, meaning 0% GST. There are exceptions, such as services tied to property in Canada or to an individual who is in Canada when you do the work.
What's the difference between zero-rated and exempt?
Zero-rated supplies are taxable at 0%, so you can still claim input tax credits on related costs. Exempt supplies carry no GST and you can't claim credits on the costs of making them.
Do US sales count toward the $30,000 GST threshold?
Yes. Zero-rated sales, including most exports of services, count toward the $30,000 small supplier threshold. You can owe GST registration because of mostly US income.
What exchange rate should I use for US dollar income?
Use a consistent, reasonable rate, such as the Bank of Canada rate on the day of the transaction. When you convert USD to CAD later at a different rate, the difference is recorded as a foreign exchange gain or loss.
Do I need to show anything on an invoice to a US client?
It's good practice to show GST at 0% and note that the supply is a zero-rated export of services, along with your GST number if you're registered. Hold on to the client's address and details to support it.
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Book a free 15-min callThis article is general information for Alberta businesses and isn't tax or legal advice. Rules and thresholds change, so confirm your situation with your accountant or CRA.