Therapist tax services: life after the 2024 GST/HST exemption

Who the exemption actually covers

The exemption applies to psychotherapy and counselling therapy services rendered to individuals by practitioners who are licensed with the regulatory body for the profession in the province where they practise — in Ontario, that means registrants of the College of Registered Psychotherapists of Ontario. In provinces that do not regulate the profession, a practitioner qualifies by holding credentials equivalent to what a regulating province requires. Psychologists and social workers were already exempt under earlier rules, so the 2024 change mainly reached RPs and counselling therapists who had been charging 13% their whole careers.

Two boundaries matter. The service must fall within the scope of the profession — therapy, not everything a therapist happens to sell. And the practitioner must actually hold the credential: unregulated coaches offering counselling-adjacent services gained nothing in 2024 and remain fully taxable. Delivery mode does not matter — in-person and telehealth sessions with Canadian clients are treated the same way.

What stays taxable in a therapy practice

Exemption follows the service, not the person, so plenty of common revenue lines keep their 13%:

These taxable lines are what count toward the $30,000 small-supplier threshold now — exempt therapy revenue no longer does — which quietly changes the registration math for almost every practice.

Deregistration: usually right, never free

A practice whose supplies are now entirely exempt can cancel its GST/HST registration, and usually should: exempt supplies earn no input tax credits anyway, so staying registered means filing nil-value returns for nothing. But cancellation has a price. On the way out you are treated as having disposed of capital property still held in the practice — the laptop, office furniture, therapy-room fittings — and must repay the tax embedded in them (the basic tax content) on the final return. For most solo practices that is a small, one-time amount well worth paying for the simplicity; for a recently built-out office it can be thousands. Timing has a rule of its own too: a practitioner who registered voluntarily must stay registered for at least a year before cancelling. We compute the exit cost and the earliest clean exit date before filing anything.

The fee decision follows immediately. With no 13% added to invoices, you either hold sticker prices — an effective raise — or pass the saving to clients; both are legitimate, but invoices must stop showing tax the day the cancellation takes effect, and any HST collected in error still has to be remitted.

Mixed practices: allocation becomes the ongoing work

A therapist who also supervises, teaches, or writes medico-legal reports stays registered if those taxable lines exceed $30,000 — and then runs a genuinely mixed practice. HST is charged only on the taxable services, and input tax credits must be allocated: costs tied to taxable work are fully creditable, costs tied to therapy are not, and shared costs like rent and software split on a fair and reasonable method used consistently. Clean invoicing that separates therapy from everything else is what makes the allocation defensible, so we set the invoice templates up once and the quarterly filings follow.

The income tax side did not change

The exemption touched HST only — the practice still reports on a T2125, or a T2 if you operate through a health profession corporation. Private-practice income arrives with nothing withheld, so the first full year usually ends with a balance owing above the $3,000 line that starts quarterly instalments the year after — worth a calendar entry, not a surprise. The deductions that matter most for therapists: home office costs for a telehealth practice, college registration and association dues, liability insurance, continuing education, and practice-management software. Therapists seeing US clients over telehealth add a US-source-income question that deserves its own space — our cross-border tax page for therapists covers it. Incorporation rarely pays until profit clearly exceeds personal spending, and we will say so plainly when it does not.

Source: CRA — GST/HST for businesses.