Etsy charges a Canadian seller three fees on almost every sale: a listing fee of about US$0.20 per item, a 6.5% transaction fee on the full order total, and a payment processing fee of roughly 3% plus C$0.25. On top of those, Etsy adds GST or HST to its own fees based on the province your shop is registered in. Understanding which fees carry tax, and what you can recover, is where most Etsy sellers leave money on the table.
What Etsy charges Canadian sellers
The core fees apply to nearly every transaction:
- Listing fee – about US$0.20 each time you publish or renew a listing. Listings stay live for four months or until the item sells.
- Transaction fee – 6.5% of the total the buyer pays, including the shipping and gift wrap you charge. This catches sellers off guard because it applies to shipping, not only the product price.
- Payment processing fee – roughly 3% plus C$0.25 per order through Etsy Payments.
- Regulatory operating fee – a small percentage Etsy applies in Canada and a handful of other countries.
Optional costs stack on top: Etsy Ads (your own budget) and Offsite Ads, which take a share of any sale that comes through an outside ad. Between the core fees and shipping, many Canadian shops see Etsy keep 20% or more of a typical order.
Do Etsy fees include GST or HST?
Yes. Etsy charges GST or HST on its service fees, and the rate follows the province your business is in, not where the buyer lives. That means 5% GST in Alberta, British Columbia, Manitoba, Saskatchewan, and Quebec, 13% HST in Ontario, and 15% HST in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.
This tax sits on Etsy fees, not on your product revenue. So a seller in Ontario pays 13% HST on the listing, transaction, and processing fees Etsy bills. It shows up as a separate line on your Etsy payment account, and it adds up quietly across hundreds of small charges.
What changes once you register for GST/HST
Registration shifts two things at once, and the interaction confuses people.
First, once you add your GST/HST number to your shop, Etsy stops collecting tax from your Canadian buyers on physical orders, because charging and remitting that tax becomes your responsibility. Second, the GST or HST Etsy charged on its fees becomes recoverable to you as an input tax credit, rather than a sunk cost.
There is a wrinkle worth knowing. When Etsy has already collected the sales tax on an order, it will not add GST/HST to the order-related fees for that sale. But it always charges tax on listing fees, Etsy Ads, Offsite Ads, and Pattern subscription fees, registered or not. Sorting out which fees carried recoverable tax, month after month, is exactly the kind of reconciliation that gets missed and quietly inflates a shop real cost of selling.
Are Etsy fees tax deductible in Canada?
The fees themselves are a legitimate business expense. Listing, transaction, processing, and advertising fees all reduce the business income you report, the same as shipping supplies or software. That part is straightforward.
The part sellers get wrong is the tax layered on top. The GST/HST Etsy charges on its fees is not simply another expense to deduct once you are registered; it is a credit you claim back. Treating it as a plain cost, or double-counting it against both income and your tax return, is a common error that either overstates expenses or leaves real money unrecovered. Getting the split right is the difference between an Etsy shop that looks profitable and one that actually is.
Frequently asked questions
Does Etsy charge GST on listing fees even if I am not registered?
Yes. GST or HST applies to listing fees, Etsy Ads, Offsite Ads, and Pattern fees regardless of your registration status. Registration changes what you can recover, not whether Etsy charges the tax.
Are Etsy fees higher for Canadian sellers than US sellers?
The transaction and processing structure is similar, but Canadian shops carry the regulatory operating fee and pay GST/HST on the fees based on their province. Currency conversion on payouts can add another layer of cost.
Can I claim back the GST/HST Etsy charges on its fees?
Only if you are registered for GST/HST. Registered sellers can recover that tax as an input tax credit. Unregistered sellers absorb it as a cost with no way to claim it back.
Does the transaction fee apply to shipping?
Yes. The 6.5% transaction fee is calculated on the total the buyer pays, which includes the shipping and gift wrapping you charge, not only the item price.
Related guides
- Etsy GST/HST for Canadian Sellers: The Complete Guide
- Etsy GST Number: When Canadian Sellers Need Their Own
- Does Etsy Report to the CRA?
- E-commerce Bookkeeping for Online Sellers
- GST/HST Registration and Filing
Not sure how your Etsy fees should be handled?
We work with Canadian Etsy sellers to sort out which fees carry recoverable tax, keep the GST/HST side clean, and make sure the shop numbers reflect what you actually keep. Get in touch and we will take a look at your setup.
Related guides
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