Is there HST on haircuts and salon services in Ontario?

Salon services have no personal care exemption

The Excise Tax Act exempts a specific list of services from GST/HST, mostly health care provided by licensed practitioners and certain financial and residential rental supplies. Haircuts, colouring, blow-outs, styling, waxing, and similar personal care services are not on that list, so they are fully taxable at Ontario's 13% HST rate like most other services sold to consumers.

This applies the same way whether the service is provided in a full-service salon, a barbershop, or a home-based operation. There is no lower rate or partial exemption for basic services versus premium ones; a simple trim and a full colour treatment are taxed identically as a percentage of the price charged.

A mobile stylist who travels to clients rather than working from a fixed location is subject to exactly the same rules. Providing the service in a client's home rather than a salon chair does not change whether the supply is taxable, and it does not create any separate exemption for mobile or independent operators.

When a salon actually has to start charging HST

A newly opened salon does not have to charge HST from day one. Like any other business, it is a small supplier until its worldwide taxable sales exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters, at which point registration becomes mandatory and HST must be added to every taxable sale going forward.

Many salon owners choose to register earlier than required anyway, particularly once they are paying meaningful HST on rent, product inventory, and equipment, since registration unlocks input tax credits on those costs. See our answer on registering for HST before $30,000 for how that trade-off is usually weighed.

An owner running more than one salon location under separate corporations should also check whether the CRA would treat those corporations as associated for the small supplier test, since associated businesses generally have their combined sales measured together rather than each location getting its own $30,000 allowance; see our answer on when you have to register for GST/HST for how that combined test works.

Chair renters are their own business, with their own threshold

A stylist or barber who rents a chair from a salon and keeps their own client revenue is generally treated as an independent business, separate from the salon owner. That means the chair renter tracks their own $30,000 small supplier threshold based on their own service revenue, independent of how much the salon as a whole brings in.

This matters because a busy salon with several chair renters can have combined revenue well past $30,000 while some individual renters remain under the threshold and are not yet required to register themselves. Each renter's registration status, and the HST they charge their own clients, needs to be tracked separately rather than assumed to follow the salon's.

A commission-paid stylist who is genuinely an employee of the salon is a different case entirely. Employees do not have their own GST/HST registration or small supplier threshold to track, since the salon itself is the business making the taxable supply to the client and the commission is simply how the employee is paid out of that revenue. Salon owners sometimes blur the line between a true employee and an independent chair renter without realizing the tax and payroll consequences differ significantly between the two arrangements.

Tips are not taxed, but retail products are

Gratuities left for a stylist are not consideration for a taxable supply, so tips are not subject to HST, whether they are paid in cash or added through a card terminal. This holds regardless of how a salon's point-of-sale system happens to display the tip on a receipt. A mandatory service charge automatically added to every bill, rather than left to the customer's discretion, is a different matter and is generally treated as part of the taxable price rather than as a true gratuity.

• Service charges built into the price of the haircut itself are taxable, since they are part of the price for the service.
• Genuine gratuities, left at the customer's discretion, are not taxable.
• Retail products sold at the front desk, shampoo, styling products, tools, are taxable tangible personal property at 13%, the same as any retail sale, regardless of whether they are sold alongside a service.
• Add-on treatments such as extensions, keratin treatments, and specialty colour services are taxed the same way as a standard haircut, since they are simply another taxable service.

A salon selling both services and retail product needs its point-of-sale system set up to charge HST correctly on both categories, and to keep the tip amount separate from the taxable sale so it is not accidentally taxed. The same logic extends to related personal care businesses; see our answer on HST for nail salons and estheticians for how the same principles apply just outside hair care.

How we handle bookkeeping and HST for salons

We set up point-of-sale and bookkeeping systems for salons so that service revenue, retail sales, and tips are tracked and taxed correctly from the start, rather than sorted out after the fact at filing time. For salons with chair renters, we help owners keep each renter's revenue and registration status separate so the salon's own GST/HST filing is not overstated or understated. Our tax services for hair salons and barbershops page covers registration, filing, and the retail-versus-service split in more detail. We also help owners set up payroll correctly for commission-based employees alongside chair-rental arrangements, since the two require different treatment even when they sit in the same salon.