Buying a car in Ontario: sales tax explained
How sales tax applies to new and used vehicles in Ontario, and whether a trade-in lowers it.
Key facts
| Place | Ontario |
|---|---|
| Sales tax | Combined sales tax |
| Standard rate on file | 13% |
| Multiply net price by | 1.13 |
| Tax share of a gross price | 11.5% |
| Currency | CAD |
Dealer and private sales
Dealer sales in Ontario generally attract the combined rate. Private used-vehicle sales can be taxed differently, often when you register the vehicle. Check provincial rules.
Worked example
Here is the calculation with sample figures. Change any number in the Ontario Car Sales Tax Calculator to run your own.
| Price | CA$30,000.00 |
| Trade-in value | CA$5,000.00 |
| Fees | CA$500.00 |
| Tax rate (%) | 13% |
| Tax | CA$3,250.00 |
|---|---|
| Total | CA$28,750.00 |
Trade-ins
Some provinces tax only the difference after a trade-in. Set the trade-in to zero in the calculator if no credit applies.
Quick reference at 13%
Common amounts in Ontario, worked both ways: adding tax to a net price, and extracting it from a price that already includes tax.
| Amount | Tax on net amount | Gross (net + tax) | Net if amount includes tax |
|---|---|---|---|
| CA$10.00 | CA$1.30 | CA$11.30 | CA$8.85 |
| CA$50.00 | CA$6.50 | CA$56.50 | CA$44.25 |
| CA$100.00 | CA$13.00 | CA$113.00 | CA$88.50 |
| CA$250.00 | CA$32.50 | CA$282.50 | CA$221.24 |
| CA$500.00 | CA$65.00 | CA$565.00 | CA$442.48 |
| CA$1,000.00 | CA$130.00 | CA$1,130.00 | CA$884.96 |
| CA$5,000.00 | CA$650.00 | CA$5,650.00 | CA$4,424.78 |
How Ontario compares
Standard rates on file for other provinces and territories. A difference of a few points matters most on high-value purchases and on cross-border sales.
| Place | Rate on file | Compared with 13% |
|---|---|---|
| Northwest Territories | 5% | lower |
| Nova Scotia | 14% | higher |
| Nunavut | 5% | lower |
| Prince Edward Island | 15% | higher |
| Quebec | 14.975% | higher |
| Saskatchewan | 11% | lower |
Using the calculator step by step
- Open the Ontario Car Sales Tax Calculator.
- Type your figures into the numbered lines. Results update as you type.
- Check the rate field. It starts at 13%; change it if a reduced rate, local surcharge or exemption applies to you.
- Read the result on the receipt panel, and use the formula shown under it if you need to explain the figure to a client or colleague.
Key terms
- Marginal rate
- The rate applied to the next unit of income. It decides how much of a raise or a deduction you keep.
- Taxable income
- Income left after allowances and deductions, on which the tax rates are applied.
- Zero rate
- A rate of 0% on a taxable supply. Unlike an exemption, the seller can usually still reclaim tax on costs.
- Tax credit
- An amount subtracted directly from the tax bill, worth its full face value.
- Standard rate
- The rate that applies to most goods and services unless a specific reduced rate, zero rate or exemption applies.
Common mistakes to avoid
- Assuming private sales are tax-free.
- Leaving licensing fees out of the budget.
Run your own numbers. The Ontario Car Sales Tax Calculator updates as you type and shows the formula it uses.
Frequently asked questions
Is there sales tax on used cars in Ontario?
Usually, though the rate and timing can differ for private sales.
Does a trade-in reduce the tax?
In some provinces; check current rules.
This article is general information for planning, not tax advice. Rates and rules change; confirm with your tax authority or a qualified adviser.