No, not for clinical psychotherapy. Psychotherapy and counselling therapy provided to an individual on or after June 20, 2024, are exempt from GST/HST in Canada, as long as a qualified practitioner provides them. In Ontario, for a psychotherapist, that means being a Registered Psychotherapist in good standing with the College of Registered Psychotherapists of Ontario (CRPO). Some other work, such as workshops, training for other professionals and reports for legal proceedings, can still be taxable.
What changed in June 2024?
Until mid-2024, psychotherapy by Registered Psychotherapists in Ontario was taxable, so those registered for HST had to charge 13% on their sessions. Psychologists, social workers, nurses and occupational therapists who provide psychotherapy were already exempt under their own professions’ rules. On June 20, 2024, new federal legislation added psychotherapy and counselling therapy to the list of health care services that are exempt from GST/HST. There was no transition period.
In Ontario, the 5% federal GST and the 8% provincial portion are combined into one 13% harmonized sales tax (HST). The CRA calls it GST/HST.
Which therapy services are HST-exempt?
In Ontario, your psychotherapy is exempt when you are a Registered Psychotherapist in good standing with the CRPO and the service is:
- psychotherapy within your scope of practice, provided to an individual;
- a health care service, meaning its purpose is to maintain health, prevent disease, treat or relieve an injury, illness, disorder or disability, help someone cope with one, or provide palliative care; and
- not cosmetic.
Also exempt:
- Couples, family and group therapy is exempt where you are the direct care provider to each person in the session.
- Cancellation and missed-appointment fees are exempt when the booked session would have been exempt.
- Clinical supervision is exempt when it is within your scope of practice and its purpose is to safeguard the well-being of the supervisee’s client.
- Registered Social Workers were already covered. Their therapy services to clients have generally been exempt for years under an older social work exemption.
The exemption applies across Canada, but who qualifies depends on the province. This guide focuses on Ontario.
What services may still be taxable?
- Workshops, presentations and other informational services, and training for other health care professionals, are generally taxable.
- Reports and letters for lawyers or courts, such as for custody or criminal proceedings, are taxable because their purpose is to inform someone else, not to treat the client.
- Coaching, such as life, career or executive coaching, isn’t mentioned in the CRA’s guidance. In our view it is generally taxable because it is not a health care service. What counts is what you actually deliver: if your “coaching” is really psychotherapy, it is treated as psychotherapy.
- Clinic fees: if a clinic keeps part of your fees for space or administration, that part may be a taxable service the clinic provides to you, so the clinic may charge you HST. It depends on your written agreement.
You must charge 13% HST on taxable services if you are registered for GST/HST, or if you are required to register because your taxable sales are over the small supplier limit (see “What is a small supplier?”).
I’m registered for HST. What should I do now?
Step 1: Stop charging HST on therapy
Don’t charge GST/HST on exempt sessions. This has applied since June 20, 2024.
Step 2: Fix any HST you charged by mistake
You have two years from the date you charged the tax to fix it. Refund or credit the HST to your client, give them a credit note (a document showing the tax you reversed), and deduct the amount on your GST/HST return for the period in which you issue the credit note. If you don’t, your client can claim the HST back from the CRA on Form GST189, using reason code 1C, within two years of paying it. The two years run separately for each invoice, so HST charged in mid-to-late 2024 may already be past the deadline.
Step 3: Claim input tax credits only on taxable work
Input tax credits (ITCs) are the HST you paid on business expenses and claim back. You can’t claim them for exempt therapy. While you stay registered, you can still claim them on costs for taxable work such as workshops. If an expense is shared between therapy and taxable work, claim only the taxable share, worked out on a fair and reasonable basis.
Step 4: Check your equipment
If you mainly used equipment, such as a computer, for taxable work and its taxable use drops to 50% or less, you are treated as having sold it. You pay back part of the HST you claimed (or could have claimed) when you bought it, scaled down to the equipment’s value at the time. For most therapists this happened on June 20, 2024, when sessions became exempt, and the amount belongs on the HST return for that period. For example, if you bought a $2,000 computer, claimed back the $260 of HST, and it was worth $200 on June 20, 2024, you owe $26 ($260 × $200 ÷ $2,000).
Step 5: Decide whether to close your HST account
- All of your income is exempt therapy: you may ask the CRA to close your HST account.
- You also have taxable sales: you must stay registered unless you are a small supplier (explained below).
- Small suppliers can close an HST account that has been open for at least one year, by filing Form RC145, by writing to the CRA, or by calling CRA Business Enquiries at 1-800-959-5525.
What happens when you close your HST account?
- Supplies on hand for taxable work are treated as sold at fair market value (what they would sell for at the time you close), so you owe HST on that value.
- Equipment is treated as no longer used in your business, which triggers the rules in Step 4.
- Prepaid costs: you may have to repay ITCs claimed on services, rent and similar payments that relate to the period after cancellation.
- You file all returns and pay any balance owing up to the cancellation date.
It is worth running the numbers before you file Form RC145.
What is a small supplier?
You are a small supplier if your taxable sales were $30,000 or less over the last four consecutive calendar quarters, counting any businesses associated with you, such as a corporation you control. Exempt therapy fees don’t count toward the limit.
There is also a single-quarter test. If your taxable sales go over $30,000 in any one calendar quarter, you stop being a small supplier right away, and HST applies from the sale that takes you over the limit.
Example. An Ontario Registered Psychotherapist (RP) earns $120,000 from sessions and $14,000 a year from school workshops. Only the workshops count, and $14,000 is under $30,000, so the RP is a small supplier and can close their HST account after a full year of registration. If the RP’s taxable sales later pass $30,000 over four consecutive calendar quarters, or in a single calendar quarter, the RP must register again.
Frequently asked questions
Do Registered Social Workers charge HST in Ontario?
Generally no. Therapy services that a Registered Social Worker provides to clients are exempt under the social work exemption, which existed before the 2024 change. Services that aren’t provided to a client, such as a presentation to an agency’s staff, aren’t covered.
Do I charge HST on workshops, court reports or coaching?
Workshops, presentations, training for other professionals and reports for legal proceedings are generally taxable. In our view, coaching that isn’t a health care service is taxable too. You charge HST on them if you are registered for GST/HST or required to be. If you are a small supplier and not registered, you don’t charge HST on these.
Should I close my HST account now that psychotherapy is exempt?
If all of your services are exempt, you may close it. If your taxable sales are $30,000 or less over four consecutive calendar quarters, and no single quarter is over $30,000, you can close it once you have been registered for a year. You may owe HST on supplies and equipment you still have, and you may need to repay some ITCs.
References
- Canada Revenue Agency, GST/HST Memorandum 25-3, Application of the GST/HST to Psychotherapy and Counselling Therapy Services (April 2026; cancels and replaces GST/HST Notices 334 and 335)
- Fall Economic Statement Implementation Act, 2023 (Bill C-59), S.C. 2024, c. 15, section 137 (royal assent June 20, 2024)
- Excise Tax Act, Schedule V, Part II (Health care services): psychotherapy and counselling therapy (paragraphs 7(j.1) and 7(j.2)), social work services (section 7.2), and the health care and cosmetic service rules
- Canada Revenue Agency, Excise and GST/HST News No. 103 (December 2017, archived): social work services
General information only, not tax advice for your situation.