Shopify gives your store three ways to handle sales tax at checkout: Shopify Tax (automated, and paid once you pass a sales threshold), Basic Tax (free and automated, but closed to new Canadian stores), and manual tax (free, where you set the rates yourself). For most Canadian sellers in 2026 the real decision is between Shopify Tax and manual, because Basic Tax is no longer offered to stores opened after May 13, 2026.
Here’s the part that trips people up: none of the three registers you for GST/HST, files a return, or remits a cent to the CRA.
They only calculate what shows at checkout, so picking the right one is about accuracy and cost, not compliance.
What each option actually does
Shopify Tax is the full automated service. It looks up the correct rate for each customer’s province, applies product-category rules where they matter, handles B2B and customer exemptions, and gives you the more detailed tax reports. It’s the most hands-off option and the only paid one.
Basic Tax is the free middle tier. It still uses automatic Canadian rate tables and handles exemptions, but it skips the product-category rates, the liability insights, and the advanced reporting. If your store had it set up before May 13, 2026, you keep it with no interruption.
Manual tax is exactly what it sounds like. You enter the rates yourself and maintain them. It’s free for every store, including new ones, but nothing updates automatically when a province changes a rate or a rule.
The May 13, 2026 change that narrows your choice
Shopify closed Basic Tax to new Canadian stores on May 13, 2026. If your store was collecting tax in Canada before that date, you can stay on Basic Tax indefinitely. If you opened after it, Basic Tax isn’t on the menu, so your only two options are Shopify Tax or manual.
That’s the whole reason this decision looks different now than it did a year ago. A lot of older “just use free Basic Tax” advice no longer applies to a store you’re setting up today.
What Shopify Tax costs in Canada
Shopify Tax is free until your store reaches $100,000 CAD in sales. For stores created before May 13, 2026 that’s measured per year; for stores created on or after that date it’s measured as lifetime sales, so a newer store can hit the paid tier and stay there.
Past the threshold, the fee is 0.25% of each order on the Basic, Grow, and Advanced plans (0.15% on Shopify Plus), capped at $0.99 CAD per order. Stores that were on the service before May 13, 2026 also have a $5,000 CAD annual cap on the total fee. The charge applies to orders in provinces where you collect tax, and it still applies to an order that ends up tax-exempt because of the product. So a $0.99 ceiling per order is small, but it applies to more orders than sellers expect.
Which one should you pick
Here’s the honest read. If you sell into one or two provinces at rates that rarely move, manual tax is fine and free, and the automation isn’t buying you much. If you ship across the country, deal with mixed product types, or don’t want to babysit rate changes, Shopify Tax earns its $0.99 by getting the rate right every time.
What I’d steer you away from is choosing the service to solve a problem it doesn’t touch. The expensive mistake isn’t the transaction fee. It’s charging the wrong rate for months, or collecting tax in a province where you were never registered, or being registered and forgetting to switch collection on. The tax service you pick doesn’t fix any of that, and it won’t file your return either. That’s the work worth getting right.
Frequently asked questions
Does Shopify Tax file my GST/HST return?
No. All three options only calculate and collect tax at checkout. Filing and remitting to the CRA is separate, and it stays your responsibility no matter which service you use.
Is Basic Tax still available in Canada?
Only for stores that were set up to collect tax in Canada before May 13, 2026. Those stores keep it. New stores opened after that date choose between Shopify Tax and manual tax.
Do I have to pay for Shopify Tax?
Not until your store passes $100,000 CAD in sales. After that it’s 0.25% per order (0.15% on Plus), capped at $0.99 CAD per order. Below the threshold it costs nothing.
Can I switch from Shopify Tax to manual to avoid the fee?
You can change the service, but manual means you own every rate and every update, and a wrong rate is far more costly than the fee you’re avoiding. If you’re near the threshold and considering it, it’s worth a quick check that your rates and registrations are actually correct first.
Related guides
- Shopify Tax fee in Canada: how to stay free
- Do you need a GST number for Shopify in Canada?
- GST vs HST for Shopify sellers
- Do Shopify fees have GST?
- Our GST/HST services
Not sure which setup fits your store?
If you’re weighing Shopify Tax against manual, or you just want to be sure you’re registered and collecting in the right provinces, we can look at your store and tell you where you stand. Get in touch and we’ll sort out the tax side so you can get back to selling.
Related guides
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