Handling GST Withholding for Agents Without a GST Number
How to Handle GST Withholding for Agents Without a GST Number
Before making any changes, please confirm how you would like to handle agents who do not have a GST number.
Please consult your accountant before withholding an agent’s GST/tax portion, especially if the agent does not have a GST account, to ensure the setup aligns with your accounting and CRA requirements.
There are three possible options:
Option 1: Do not collect GST from the agent
If the agent is not required to collect GST, update the agent profile:
Taxable = No
With this setup:
GST will not be calculated on the agent payout.
GST collected on the transaction remains with the brokerage.
The brokerage records and remits the amount as GST collected.
No GST withholding deduction is required.
Option 2: Withhold GST and return it to the agent later
If the brokerage wants to hold the agent’s GST amount and return the funds to the agent later, set up a standard GST withholding deduction.
With this setup:
The GST amount is deducted from the agent’s commission.
The amount is posted to a liability GL account.
The brokerage can track the held funds and return them when needed.
Option 3: Withhold GST and remit on behalf of the agent
If the brokerage wants to withhold the agent’s GST and remit it on the agent’s behalf, set up a payable deduction.
With this setup:
A payable is created for each closed deal on behalf of the agent.
The brokerage can track and manage the GST payments.
When does an agent need to register for GST?
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/when-register-charge.html
An agent generally needs to register for GST once their taxable sales exceed the $30,000 small supplier threshold.
If the $30,000 threshold is exceeded within a single calendar quarter: GST registration applies immediately, and GST must be charged on the transaction that causes the agent to exceed the threshold.
If the threshold is exceeded over multiple quarters: The effective GST registration date depends on CRA rules.
Agents should consult their accountant or CRA guidance to confirm their specific GST registration requirements.
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