If you run a Shopify store in Canada, check your tax settings this week. Shopify is quietly moving stores from its free tax setting onto Shopify Tax, its paid service, and there is a deadline to opt out.
For most Canadian sellers, paying it is unnecessary. Here is what is happening, the one setting that keeps you at zero, and the part that actually matters: where you are required to register.
What changed
Shopify Tax is the service that looks up the right tax rate for each customer and applies it at checkout. It used to be free. Now it carries a per-order fee once your store passes a sales threshold.
The fee, on the Basic, Grow, and Advanced plans:
| Canada, EU and UK orders | US orders | |
|---|---|---|
| Fee | 0.25% of the order | 0.35% |
| Cap per order | $0.99 | $0.99 |
| Free until | $100,000 in sales | $100,000 in sales |
So a $120 Canadian order would cost about 30 cents to calculate. Not ruinous, but you are paying for a number that, in Canada, barely ever changes.
The part that catches people: the forced migration
Even if your store sits on the free Basic Tax setting today, Shopify plans to move you onto the paid service automatically unless you act.
If you do nothing by the date shown on your store, you get switched to the paid service. The change is reversible, but it is far easier to set your choice now than to notice the fee on a payout later.
How to stay free, in three clicks
This is the whole fix. Go to Settings, then Taxes and duties, open Canada, and click Manage.
Select Basic Tax and save. That keeps you free, keeps the automatic Canadian rate tables, and opts you out of the migration. You still get B2B and customer exemptions and your tax reports. The only things you give up are rooftop-level precision and liability alerts, neither of which a Canada-only GST/HST store needs.
You may also see a Manual Tax option, which is the other free choice. It works, but it asks you to enter and maintain every rate yourself. For Canada there is no reason to take on that busywork when Basic Tax does it automatically for the same price of zero.
Why this is an easy call for Canadian sellers
Canadian sales tax is simple by design:
- The rates run from 5% to 15%, set at the province level, and they almost never move.
- Most physical goods are fully taxable, so there is little to categorize.
- Basic Tax already applies the correct provincial rate at checkout, for free.
In other words, Shopify is offering to charge you for precision that Canada’s tax system does not require. Set your province rates once and they hold. There is no rooftop guesswork to pay for.
The question the fee does not answer: where do you register?
Switching off the fee is the easy part. The harder, and more important, question is where you are required to register and collect in the first place. A rate table will not tell you that, and getting it wrong is far more expensive than 25 cents an order.
The federal piece is the same everywhere. The provincial piece is where sellers get tripped up, because four provinces run their own sales tax with their own rules.
| Tax | Rate | You generally must register when… |
|---|---|---|
| GST / HST (federal) | 5% GST, or HST of 13% (ON), 14% (NS), 15% (NB, NL, PE) | Your taxable sales pass $30,000 over four consecutive calendar quarters |
| BC PST | 7% | You are outside BC and your BC sales pass $10,000 in any 12 months |
| Saskatchewan PST | 6% | You make any taxable sale into Saskatchewan. No threshold |
| Manitoba RST | 7% | Generally at $30,000, but out-of-province online sellers often at $10,000 |
| Quebec QST | 9.975% | Your sales to Quebec consumers pass $30,000 in any 12 months |
| Alberta + territories | GST only (5%) | No provincial sales tax to register for |
A few things worth flagging:
- Saskatchewan has no safe harbour. One taxable sale into the province can create a registration obligation, even if you have never set foot there.
- The $30,000 federal threshold is not per province. It is your total taxable sales across Canada. Cross it once and you are registering federally.
- Inventory in a province is a factor, not an automatic trigger. Storing stock in a Canadian warehouse is one of several things the CRA weighs, not a switch that flips your obligations on by itself.
Once your registrations are sorted, a free setting like Basic Tax carries the day-to-day collection. The registrations are the part worth getting right, and the part a Shopify prompt will never handle for you. If you want the full walkthrough of registering and setting up multi-province collection on Shopify, see our Shopify GST/HST guide for Canadian sellers.
The short version
- Shopify is moving Canadian stores to its paid tax service. Check your deadline now.
- Settings, then Taxes and duties, then Canada, then Manage, then Basic Tax, then Save. Free, automatic, done.
- Skip Manual Tax. Basic Tax does the same job without the upkeep.
- The fee is not the real question. Whether you are registered and collecting in the right provinces is.
Frequently asked questions
Do I have to pay the new Shopify Tax fee in Canada?
Only if you stay on Shopify Tax and your sales pass $100,000. Switch to Basic Tax, which is free, and you never pay it.
How much is the Shopify Tax fee?
On the Basic, Grow, and Advanced plans it is 0.25% of each Canadian order, capped at $0.99, and it only starts after $100,000 in annual sales. US orders run 0.35%.
What is the difference between Basic Tax and Shopify Tax?
Both apply Canadian rates automatically at checkout. Shopify Tax adds rooftop-level precision and liability alerts and carries the fee. Basic Tax is free and is all a Canada-only GST/HST store needs.
Do I need Shopify Tax to collect GST/HST?
No. Basic Tax collects GST/HST for you automatically, for free. The paid service is not required to charge tax correctly in Canada.
Shopify is migrating my store to Shopify Tax. What should I do?
Go to Settings, then Taxes and duties, open Canada, click Manage, select Basic Tax, and save, before the deadline shown in your admin.
Is Shopify Tax free in Canada?
It is free until you reach $100,000 in sales, then the per-order fee applies. Basic Tax stays free no matter your sales volume.
Free download: the Canadian Seller’s Sales Tax Map
We built a quick reference that lays out every province, its tax, its rate, and the exact point you are required to register, plus the Shopify setting to use so you never pay the fee. Download the free guide (PDF) and keep it on hand the next time you cross a border or a threshold.
Not sure where you stand?
If a Shopify prompt has you second-guessing whether your store is collecting the right tax in the right provinces, that is worth sorting before you change a setting. We help Canadian and cross-border e-commerce sellers get GST/HST and provincial registration right, and recover the tax they are owed on their costs. Book a call with Jones Cosman and we will tell you exactly where you need to be registered.