Canadians can open an Etsy shop with a normal bank account, since Canada is on Etsy's Etsy Payments list without a Payoneer requirement. The catch is tax: Etsy says it collects GST/HST on eligible orders unless you add your own tax ID, and it reports Canadian sellers to the CRA past set levels.
Canada is an easy country to open an Etsy shop in and a slightly fiddly one to get the tax side right. Etsy collects some sales taxes for you, leaves others with you, and reports to the CRA. Before you list anything, it helps to know which tax is whose, so here's what Etsy's own help pages say for Canadian sellers.
Who collects the sales tax on a Canadian order
Etsy says that starting July 1, 2022, it began collecting GST/HST on eligible orders placed by shoppers in Canada, adds the tax to the buyer's total at the last stage of checkout, and remits it to the tax authorities. What happens next depends on whether you've given Etsy a tax ID.
- If you've added a GST/HST ID to your Etsy account, Etsy says it won't collect and remit that tax on physical goods. You put the tax into your listing prices and file it yourself.
- If you haven't, Etsy collects GST/HST from Canadian buyers on physical items shipped from a Canadian seller to a Canadian buyer, and sends it on.
- If you've added a QST ID and ship to Quebec, the same logic applies to QST.
Etsy warns that if you were already collecting and remitting the tax yourself, buyers can end up charged twice. Adding your ID is how you tell Etsy you've got it covered.
When you have to register for GST/HST
Etsy quotes Canadian tax regulation here: sellers must register for a GST/HST ID and collect and remit the tax to the CRA once they reach 30,000 CAD in sales. Under that level you may not have to register, and Etsy says it's your decision whether registering makes sense for your business. If you want help with it, Etsy points you to a tax and legal advisor, and I'd do the same.
The provincial taxes Etsy takes off your hands
Canada's provinces make it more complicated. Etsy says it's required by law to collect British Columbia and Saskatchewan PST and Manitoba RST from buyers in those provinces, and to remit them, whether or not you have a registered ID there. Quebec buyers are charged QST on physical items shipped from a seller's Canadian address, unless you've added your own QST ID.
Etsy also notes that where you're registered for GST/HST, it may collect slightly less provincial tax, because it allows for the GST you've already put in the price. It only taxes items that are ordinarily taxed in that region. Its own example is children's sized clothing in British Columbia, which it won't tax because PST doesn't normally apply.
Tax on your Etsy fees
The same rules mean Etsy collects tax on the fees it charges you. Etsy's table says a GST/HST-registered seller is charged GST/HST on all seller fees. An unregistered seller isn't charged it on payment processing and transaction fees for a sale where Etsy has already charged the buyer, but is charged it on other fees such as listing fees and ad fees. Quebec sellers follow the same pattern with QST, a seller in British Columbia is charged PST on fees, and sellers in Manitoba or Saskatchewan aren't charged PST on fees.
Etsy suggests you ask your accountant whether you can reclaim the tax it charges on your fees. That's not something I can answer for you.
The CRA report and the Social Insurance Number
Etsy says Canadian rules oblige it to report Canadian sellers to the CRA. It does this when a seller completes 30 or more physical-goods transactions in a calendar year, or makes 2,800 CAD or more on physical goods after taxes and fees, or sells any made-to-order digital items. Sellers under those levels are exempt.
For an individual seller, the report includes your name, address, date of birth, your bank account number and your Social Insurance Number with the place it was issued. If Etsy asks for those details and you don't respond by the date in its email, it will pause your shop, so keep an eye on messages from Etsy after your first few sales.
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Canadian fees and the Canadian bank deposit
Etsy's fee table lists a Canadian bank account at 3% plus 0.25 CAD for domestic orders and orders from the US, and 4% plus 0.25 CAD for international orders. That's on top of the 6.5% transaction fee. Etsy also charges sellers in Canada a Regulatory Operating fee of 0.50%, on the item price plus shipping and gift wrap.
Canada isn't on Etsy's Payoneer list, so your deposits go to a Canadian bank account. Daily deposits have a minimum, listed as CAD 25.00 for a CAD account. New sellers are paid weekly on Mondays by default, funds are generally eligible 14 days after a sale for a new shop, and a bank-detail change triggers a 5-day hold.
Reserves and labels
If Etsy puts a reserve on your payment account, part of each physical sale is held back. Etsy says sellers in Canada, the US, Australia and the UK can buy shipping labels through Etsy that may include tracking, and tracking that shows the order in transit moves the held money to your current balance.
| What I checked | What Etsy says for Canada |
|---|---|
| Etsy Payments available? | Yes, bank account, no Payoneer |
| Processing fee, domestic | 3% plus 0.25 CAD |
| Processing fee, international | 4% plus 0.25 CAD |
| Regulatory Operating fee | 0.50% |
| Daily deposit minimum | CAD 25.00 |
| GST/HST registration level quoted | 30,000 CAD in sales |
| Reports to the CRA | Yes, past set levels |
Once your shop is open, sharper listings help, and these ChatGPT prompts for Etsy descriptions are a practical place to start. If you're comparing Canada with Britain, selling on Etsy from the UK shows how the same platform handles tax reporting there, and Amazon KDP payments in Canada covers another income stream paid into a Canadian bank.
Frequently asked questions
Can I sell on Etsy from Canada?
Yes. Etsy lists Canada among its Etsy Payments countries without an asterisk, so Canadian sellers receive deposits in a Canadian bank account rather than through Payoneer.
Does Etsy collect GST/HST for Canadian sellers?
Etsy says it began collecting GST/HST on eligible orders from Canadian shoppers on July 1, 2022. If you add your own GST/HST ID, it stops collecting it on physical goods and you include the tax in your prices instead.
When must I register for GST/HST?
Etsy quotes Canadian regulation that requires registration once a seller reaches 30,000 CAD in sales. Under that level it may be optional, so ask an accountant.
Does Etsy report my sales to the CRA?
Etsy says it must report Canadian sellers to the CRA once a seller completes 30 or more physical-goods transactions in a calendar year, or makes 2,800 CAD or more on physical goods after taxes and fees, or sells any made-to-order digital items.
What is the minimum for a daily Etsy deposit in Canada?
Etsy lists CAD 25.00 as the daily deposit minimum for a Canadian dollar bank account.
