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How To Pay Customs Duty Canada? A Comprehensive Guide (2024)

Published: May 11, 2024
Author: Aman Chopra

If you're shipping your US orders into Canada, understanding how to pay customs duty in Canada is important. While it may seem like a complicated process, we've got you covered in this article!

So, let's dive into this handy guide and look at the ins and outs of customs duty payment.

Key Takeaways

  • Calculate your total customs duty amount based on item category, value, and applicable taxes. Doing so can keep you from any surprises and concerns when shipping items across the border.

  • Keeping copies of your proof of transaction ensures you've settled the total payable amount for your shipment. This allows for a smoother customs clearance processing of your packages.

  • Take advantage of Shippsy's customs duty calculator to get a heads-up on the fees needed for shipping online purchases from the US to Canada.

How To Pay Customs Duty In Canada

A paper with Customs Duty print, a pen, and a calculator

Here are the necessary steps you need to remember when paying customs fees:

1. Determine Your Customs Duty Amount

The first thing you need to do when paying your customs duty is to know how much you owe. This means calculating your total payable amount based on the following:

  • Item category

  • Item value

  • Applicable tax and duty

Knowing how much you owe helps avoid surprises and makes the payment process easier. This is a crucial step to ensure everything goes smoothly when crossing the border.

Here's a summary of the applicable tax and duties imposed by the Canada Border Services Agency (CBSA) based on the total import value:

Total Import ValueCBSA TaxCBSA Duty
Less than 40 CADNot applicableNot applicable
40 CAD to 150 CAD13% for Personal Import5% for Business ImportNot applicable
More than 150 CAD13% for Personal Import5% for Business Import0% - 25% depending on the product category

(Note: CBSA Tax and Duty are assessed based on the imported item’s value per day.)

Now, here’s an example of how you can calculate your fees:

Retail Value: Personal Import worth 75 CAD

  • Item Value x Duty Rate = Duty Amount

75 CAD x 0% = 0 Duty Applicable

(No duty incurred in this calculation since the item value is less than 150 CAD)

  • (CAD + Duty amount) x Tax rate = Tax amount

75 CAD x 13% = 9.75 CAD

CBSA Duty amount: 0 CAD

CBSA Tax amount: 9.75 CAD

You can also use Shippsy's Canada Customs Fee Calculator to access your estimated fees easily.

What Are The Types of Customs Duties?

There are mainly three types of Customs duties that apply when shipping goods to Canada:

1. Goods and Services Tax

The Goods and Services Tax (GST) is a tax added to the price of most things you buy in Canada, like goods and services.

2. Provincial Sales Tax

Provincial Sales Tax (PST) is a tax that each province in Canada charges on items you buy or services you use within that province.

3. Harmonized Sales Tax

The Harmonized Sales Tax (HST) is a single tax that combines the federal Goods and Services Tax (GST) with the Provincial Sales Tax (PST) in some Canadian provinces. Instead of having two separate taxes, these provinces have combined them to simplify things.

Below are the current Tax rates for the following provinces in Canada:

Canadian ProvinceGSTHSTPST
British Columbia5%5%7%
New Brunswick15%15%N/A
Newfoundland and Labrador15%15%N/A
Nova Scotia15%15%N/A
Prince Edward Island15%15%N/A
Northwest Territories5%5%0%

2. Prepare Required Paperwork

Closeup look of a man stamping on a document

Getting all the right paperwork is one of the basic rules when shipping to Canada. These documents include invoices, receipts, and import forms that provide detailed information about the shipment contents.

Organizing these papers helps you determine exactly how much customs duty you must pay. It also allows for a smoother shipping process, reducing the chances of shipping issues, like customs delays and errors.

So, if you're ready to ship your US orders and pay customs duties, ensure you have all the necessary paperwork. Doing so makes things a whole lot easier as it makes you ready to back up your items whenever needed.

3. Choose A Payment Method

Once you’ve determined your duties and taxes owed, the next step is to choose a suitable payment method. You have several options to choose from to pay your fees conveniently. Here are the following:

  • Pay online - You can process your payment through CBSA’s online portal using a credit or debit card. Online payment allows for quick and easy payment from the comfort of your home.

  • Pay at the border - You can also pay at the border if you’re crossing back into the country after physical shopping. You can pay using cash, credit or debit card, or traveller’s check.

  • Customs broker - Some Canadians prefer working with a customs broker to process the payment on their behalf. This is common, especially if they’re shipping larger or more complex shipments.

Regardless of the chosen payment method, it's essential to ensure timely payment to avoid any penalties or delays in customs clearance services.

4. Keep Proof of Payment

Hands holding a receipt

Always remember to keep proof of payment once you’ve paid your customs duty. This could be a receipt, a transaction reference, or any other document that shows you’ve paid the required customs fees for your imported goods.

It’s important to follow this practice because:

  1. It shows that you've fulfilled your obligation to pay the customs duties. This can be helpful in case of any disputes or inquiries from CBSA.

  2. Having a record of your payment can expedite the customs clearance process services. Customs authorities may request proof of payment to verify the duty has been paid.

  3. If you're importing goods for business purposes, keeping accurate records of customs duty payments is essential for accounting and tax purposes.

Overall, keeping proof of payment is necessary to ensure compliance with customs regulations and facilitate a smooth process for your goods purchased online.

5. Monitor Customs Clearance Process

It’s also important to keep an eye on the customs clearance process along the way. This includes checking on the status of your shipment as it goes through the customs checks and gets approval.

Here are some of the reasons why it’s important to monitor your clearance process after paying your duties:

  1. It helps you ensure that all paperwork and payments are done correctly to avoid delays.

  2. Staying updated lets you know if any problems or extra steps are needed.

  3. It lets you know immediately if there are any changes or updates on the process.

By staying informed and checking in on the process, you can work with customs authorities or your customs broker better to ensure your goods are released smoothly and on time.

Check If You Are Eligible For Personal Exemptions

Here’s a pro tip you should keep in mind: check if you're eligible for personal exemptions when paying customs duties in Canada. This is super helpful, especially for Canadian online shoppers who are ordering items from the US.

Personal exemptions allow you to bring in certain goods without paying customs duty or taxes. If you qualify for these exemptions, you can save money by not paying extra fees on your online orders.

Knowing your eligibility also helps you plan your purchases better and avoid unexpected costs at the border. By understanding the personal exemption rules, you can make informed decisions. Plus, you can stay within your budget and enjoy a hassle-free shopping experience when importing goods from the US.

Pay Fees In One Go With Shippsy

Instead of calculating and paying for your fees when you ship your online purchase from the US, better ship with Shippsy’s package forwarding services.

Why? Because with Shippsy, you don’t have to figure out the numbers yourself. We designed our system to show you the total applicable tax and duty upfront as you process your shipment. You will only pay an all-inclusive amount with a transparent price breakdown.

Speaking of price, Shippsy offers the lowest shipping rates for cross-border shipments. For as low as 6.99 CAD*, you can now get your hands on your online purchases from the US to Canada!

So, switch to Shippsy today and say goodbye to getting lost in numbers. Join thousands of Canadian online shoppers who have experienced real wonders in shipping with us from the US to Canada.

Are you hyped to start shipping with only the best package forwarder in Canada? Then, create your Shippsy account now!

*Rate applies to Ontario shipments only. Shipping fee starts at 7.99 CAD for British Columbia and Quebec.

Calculate Your Customs Fees Here

Final Thoughts

Paying your Canadian customs duties doesn’t have to be complicated. Following the steps above can surely help you go through the process with ease.

Or, for a more hassle-free experience in paying your customs fees and shipping your US items, ship with a reliable package forwarder like Shippsy.

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