Lawyer Fees, Cost Factors and 2026 Rules
GST, HST, QST and PST on legal fees: tax and disbursements on a Canadian legal bill
Which sales taxes apply to lawyers' fees in each province, how disbursements are taxed, worked examples for Ontario, Quebec and BC, and when legal fees are tax-deductible.
Legal services in Canada are taxable, so every fee on your invoice carries sales tax at your province's rate: 13% HST in Ontario, 15% HST in New Brunswick, Newfoundland and Labrador and Prince Edward Island, 14% HST in Nova Scotia (reduced from 15% on 1 April 2025), 5% GST in Alberta, Saskatchewan, Manitoba and the three territories, 5% GST plus 9.975% QST in Quebec, and 5% GST plus 7% PST in British Columbia, where PST applies specifically to legal services. Disbursements are a mix: some are taxable when the lawyer re-bills them, while court filing fees and similar charges paid on your behalf as your agent are generally passed on without GST/HST. Ask your lawyer to separate taxable and non-taxable items on the invoice.
This guide is part of the overview of lawyer fees in Canada. Tax rates are stated as they apply in October 2026; check the Canada Revenue Agency and your provincial finance ministry if your bill spans a rate change.
Sales tax on legal fees by province
| Province or territory | Tax on lawyers' fees | Combined rate |
|---|---|---|
| Ontario | HST | 13% |
| Nova Scotia | HST (since 1 April 2025) | 14% |
| New Brunswick, Newfoundland and Labrador, Prince Edward Island | HST | 15% |
| Quebec | GST 5% + QST 9.975% | 14.975% |
| British Columbia | GST 5% + PST 7% on legal services | 12% |
| Alberta, Saskatchewan, Manitoba | GST | 5% (confirm whether any provincial sales tax applies to your service with the provincial finance ministry) |
| Yukon, Northwest Territories, Nunavut | GST | 5% |
The rate that applies generally depends on the place of supply, which for legal services is usually tied to where the client is located or where the matter is handled. If you live in one province and hire a lawyer in another, the invoice may show a different tax rate from the one you expect. CRA's place-of-supply rules decide this, not the lawyer's preference.
A lawyer or paralegal whose taxable revenue is under the small supplier threshold (currently $30,000 over four consecutive quarters) does not have to register for GST/HST and may not charge it. Most law firms are registered.
How disbursements are taxed
Disbursements fall into two broad groups. The CRA explains the distinction in its policy on lawyers' disbursements.
| Type | Examples | Usual tax treatment |
|---|---|---|
| Paid as your agent | Court filing fees, land registry fees, some government search fees | Passed on at cost without GST/HST added by the lawyer, if the lawyer acted as your agent |
| Costs of providing the service | Photocopies, courier, travel, long-distance charges, file storage | Taxed at the same rate as the fee, because they are part of the lawyer's service |
| Third-party services | Expert reports, process servers, court reporters | Usually taxable; the tax may already be in the third party's invoice, then re-billed |
A clear invoice lists disbursements in separate taxable and non-taxable groups. If yours does not, ask.
Worked examples (illustrative)
Ontario. Fees $8,000, taxable disbursements $600, court filing fees $500.
- HST on fees and taxable disbursements: ($8,000 + $600) x 13% = $1,118.
- Total: $8,000 + $600 + $1,118 + $500 = $10,218.
Quebec. Fees $8,000, taxable disbursements $600, court costs $500.
- GST: $8,600 x 5% = $430.
- QST: $8,600 x 9.975% = $857.85.
- Total: $8,600 + $430 + $857.85 + $500 = $10,387.85.
British Columbia. Fees $8,000, taxable disbursements $600, filing fees $500.
- GST: $8,600 x 5% = $430.
- PST at 7%: $8,600 x 7% = $602. Under BC's PST Bulletin 106 (revised August 2025), in-house charges such as photocopies and courier form part of the price of the legal service and carry PST, while genuine third-party expenses recovered at cost, such as the filing fees, do not (except legal research, secretarial or other support services bought in).
- Total: $8,600 + $430 + $602 + $500 = $10,132.
The same $8,000 of legal work costs about $10,100 to $10,400 depending on the province, before any further disbursements.
Tax on a contingency fee
Tax is charged on the contingency fee, not on your share. If a 30% fee is $36,000 in Ontario, HST adds $4,680, so the lawyer receives $40,680 from the settlement. That is why the effective percentage is closer to 33.9% than 30%. The contingency fee calculator includes a field for this tax.
When legal fees are tax-deductible
Some legal fees can be deducted on your income tax return, which lowers the after-tax cost. Common examples recognised by the CRA include:
- Business legal fees incurred to earn business or property income, such as collecting accounts receivable or drafting commercial contracts.
- Employment-related fees paid to collect or establish a right to salary or wages owed by an employer, or to collect a retiring allowance or pension benefits (with limits on the amount that can be deducted against that income).
- Support payments: fees to obtain or enforce support payments may be deductible for the recipient in some situations; fees to defend against support claims generally are not.
Personal legal fees, such as for buying a home, drafting a will or defending a personal lawsuit, are generally not deductible. Business owners can usually claim input tax credits for GST/HST paid on legal services used in their commercial activities. Rules have conditions, so check the CRA guide that applies to your situation or ask an accountant.
Interest on unpaid accounts
Many retainer agreements allow interest on overdue accounts. In Ontario, the Solicitors Act allows a lawyer to charge interest on unpaid fees and disbursements starting one month after the bill is delivered, at a rate tied to the interest rates published under the Courts of Justice Act, or as otherwise agreed in writing. Other provinces have their own rules. Read your agreement, and if you need time to pay, ask for a written payment plan.
Frequently asked questions
Why is there tax on court fees on my bill?
There should not be GST/HST added on court filing fees the lawyer paid as your agent. If tax appears on those items, ask the lawyer to explain or correct the invoice.
My lawyer is in another province. Which rate applies?
The place-of-supply rules decide. For many legal services to individuals, the rate of the province where the client's address is located applies, with exceptions. The lawyer's accounting software usually applies the rule; ask if you think it is wrong.
Do legal aid clients pay tax?
Legal aid plans handle tax as part of their own payment arrangements. In BC, legal services partly paid for by legal aid are among the PST exemptions. Ask your legal aid office.
Can a business recover the tax?
A GST/HST registrant usually claims input tax credits for tax paid on legal services used in its commercial activities. QST registrants in Quebec can usually claim input tax refunds.
Sources
- Canada Revenue Agency — GST/HST rates, place-of-supply rules and the policy on lawyers' disbursements
- Revenu Québec — QST rate and rules
- Government of British Columbia — PST bulletin on legal services
- Government of Nova Scotia — HST rate reduction effective 1 April 2025
- Ontario e-Laws — Solicitors Act provisions on interest on accounts
