Do You Charge GST/HST on That Assessment? What the CRA Already Answered for Canadian Therapists

The rule, in one section

Two things have to be true before a service you provide is exempt.

First, you have to be a practitioner. Schedule V, Part II of the Excise Tax Act defines that as a person who practises the profession and who is licensed or certified by the province where a licence is required, or who has equivalent qualifications where it is not. Section 7 then lists the services that are exempt when a practitioner renders them to an individual. Physiotherapy is paragraph (c). Occupational therapy is paragraph (i).

Second, the supply has to have a health purpose. Section 1.2 does the narrowing. It says a supply that is not a qualifying health care supply is deemed not to be included in Part II at all. A qualifying health care supply is one made for the purpose of:

• maintaining health
• preventing disease
• treating, relieving or remediating an injury, illness, disorder or disability
• assisting, other than financially, an individual in coping with an injury, illness, disorder or disability
• providing palliative health care

Your profession gets you in. Each job’s purpose keeps you there.

That is the whole rule, and it explains why “am I exempt?” is the wrong question. You are not exempt. Particular supplies are.

The CRA set out its reasoning in Policy Statement P-256, which is about medical examinations, assessments, reports and certificates specifically. It works through a series of examples. Three groups of them matter to a therapist.

Assessments for insurers and benefit eligibility

Example 12 covers an individual required by their insurance company to have a medical examination and a disability certificate completed in order to receive health care benefits. The CRA’s decision is that this is not a qualifying health care supply, and its rationale is one sentence long: “The purpose of this supply is to assist an insurance company in determining if an individual is eligible to receive benefits.”

Example 19 does the same for workplace insurance, where the examination and report determine entitlement to income replacement and health care benefits. Example 1 covers the pre-employment medical, where a job offer is conditional on passing it. Neither is qualifying.

One more signal, if you do Ontario auto insurance work. The province’s own regulator caps what can be charged for a Statutory Accident Benefits assessment at “$2,000 plus the amount of any applicable harmonized sales tax payable under Part IX of the Excise Tax Act (Canada)”. That is a fee cap drafted on the assumption that tax can apply to this work. It is not a ruling about your practice and nobody should read it as one. It is a good reason to ask the question rather than assume the answer.

Reports for litigation and cost of future care

Example 17 is the one that will surprise Canadian occupational therapists. A health care facility is contracted by a lawyer for an assessment and report determining the cost of future care required by an injured individual, to support a claim for damages in a civil action. The CRA’s decision: not a qualifying health care supply.

Example 20 extends it to a physician’s examination and report quantifying a client’s injuries to negotiate a lump-sum settlement, and its rationale is worth reading twice. A report supplied for the purpose of quantifying injuries “is considered to assist an individual financially in coping with an injury, illness, disorder or disability and is not a qualifying health care supply.”

Look at what that rationale turns on. The definition of a qualifying health care supply covers assisting an individual in coping with a disability, and then puts three words in brackets: other than financially. A cost of future care report helps the client, obviously. It helps them get money. On the CRA’s reading, that is the wrong kind of help.

The line that is genuinely subtle

Now the other side, and it is why this is harder than it looks.

Example 6: an employee who has suffered an injury is ready to return to work, and the employer contracts an occupational therapist to assess whether the employee’s job tasks or workspace need modifying because of limitations resulting from the injury. Decision: this IS a qualifying health care supply. The CRA’s reasoning is that the assessment determines what modifications will alleviate the effects of an injury, so it falls under maintaining health and helping the person cope.

Example 9: a school board contracts an occupational therapist to assess what educational services, accommodations or physical aids a child with a disability or developmental delay needs. Decision: also qualifying.

So an occupational therapist assessing an injured worker for a third party can be exempt, while an occupational therapist assessing an injured person’s future care needs for a third party is not. Both are commissioned by someone other than the client. Both produce a report. In Example 6, the report leads to changes that help the person function. In Example 17, it leads to a number in a statement of claim.

Here is the part nobody has written down for Canadian therapists. P-256 names occupational therapists twice, and both times the answer is exempt. It never names a profession in a taxable example. Read only the examples with your job title in them and you walk away certain that all of your work is exempt. The example most likely to catch you, Example 17, describes “a health care facility” and a lawyer, and says nothing about who does the assessing. In Canadian practice, cost of future care assessments are frequently occupational therapy work. The CRA sorted its examples by purpose, and a therapist scanning for her own profession will read past the one that matters.

The $30,000 problem

Registration has two conditions, and both have to apply. You must register if you are not a small supplier and you make taxable supplies in Canada.

A small supplier, in the CRA’s own definition, is a person whose revenue from worldwide taxable supplies was equal to or less than $30,000 in a single calendar quarter and over the last four consecutive calendar quarters. The figure is $50,000 for public service bodies.

Read that phrase carefully. Worldwide taxable supplies. The CRA defines exempt supplies as supplies that are not subject to GST/HST, which means they are not taxable supplies, which means they are not in the count.

So a physiotherapist with a large treatment practice and a small medico-legal caseload is measuring against the smaller number, not the bigger one. The exempt treatment work does not push her toward the threshold at all. The assessment work does, and it is usually the part of the practice that is not tracked separately, because it is billed to third parties under a different arrangement and it grows quietly.

The CRA is also explicit at the other end: “You generally cannot register for a GST/HST account if you provide only exempt supplies.” A therapist doing pure treatment work is not sitting under a threshold. She is outside the system.

What this section is not: a calculation of your position, and this page will not do that arithmetic for you. Two published rules interact in a way most people are not told about. Whether they catch you is a question about your own numbers, and it belongs to an accountant. Take P-256 and the small supplier definition to that conversation and it will be a short one.

What this means for the invoice

Split the work. If treatment and an assessment for a third party sit on the same invoice as one line reading “OT services, September”, nobody can tell a year later which side of the line each hour was on, including you.

The description field is doing real work here, so make it carry the purpose. “Functional assessment, requested by the insurer, for benefit eligibility determination” tells your accountant everything the CRA’s test needs. “Assessment” tells them nothing.

Keep the assessment work visible as its own running total, because that is the number the registration threshold is watching.

And if you are registered, the rate follows the place of supply. In the CRA’s words: “The rate of tax to charge depends on the place of supply. This is where you make your sale, lease, or other supply.” Rates differ across the country, so check yours against the CRA page rather than a template you downloaded.

Carearoo’s invoicing is free for Canadian clinicians. Save your college registration and banking details once, keep treatment and assessment work on separate lines with a description that says who asked for the report, and export a PDF. Nothing to pay and nothing to install.

What goes on a Canadian therapist’s invoice

There is no single statutory field list for a practitioner who is not registered for GST/HST. What follows is what makes an invoice usable, by you and by whoever pays it.

• Your name, credentials and provincial college registration number. The registration is what puts you inside Part II in the first place.
• Your business name and address, and your business number if you have one.
• An invoice number and date, sequential, so the year reconciles.
• The client, and the party being billed, when they are not the same person. On third-party assessment work they usually are not.
• A description of the service that states its purpose, and the date you delivered it, separate from the invoice date.
• The amount, per item rather than as one lump.
• The tax line, and your GST/HST number if you are registered. If you are not registered, do not put a tax line on it at all.
• How to pay you, and your terms.

Frequently asked questions

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