Quick Answer
Generally yes. Psychological services rendered to an individual by a practitioner licensed to practise psychology in the province are GST/HST-exempt under the Excise Tax Act. In Ontario that means registration with the College of Psychologists and Behaviour Analysts of Ontario. The exemption is tied to the health-care purpose of the service, so some assessments and reports prepared for third parties — insurers, employers, or courts — can be taxable. As of May 2026.
Quick Answer
Psychological services in Ontario are generally GST/HST-exempt when delivered to an individual for a health-care purpose by a registered psychologist. The wrinkle that catches psychology practices is assessments: not all of them are health care to the client, and those that are not can be taxable.
Why Clinical Psychology Is Exempt
The exemption sits in Schedule V, Part II of the Excise Tax Act, which exempts psychological services rendered to an individual by a practitioner who is licensed or certified to practise the profession of psychology in the province. In Ontario, that license is registration with the College of Psychologists and Behaviour Analysts of Ontario. Therapy and clinical assessment provided to a client for their own treatment fall squarely within this.
The Assessment Grey Area
Psychology practices frequently perform assessments, and not all assessments are treated the same way for HST. The key questions are who the supply is made to and why:
- Likely exempt: assessment of a client for the purpose of their own diagnosis or treatment.
- Potentially taxable: assessments and reports prepared for a third party — an insurer determining a claim, an employer, a lawyer, or a court — where the service is supplied for litigation or a third-party decision rather than the individual’s health care.
Because the same clinician may do both, the classification has to be made engagement by engagement.
Mixed Practices and Input Tax Credits
A practice that combines exempt clinical work with taxable assessment or consulting work is a mixed practice. It tracks the two revenue streams separately, registers for HST once taxable supplies exceed the $30,000 small-supplier threshold under CRA timing rules, and can claim input tax credits only on expenses tied to the taxable side.
Bottom Line for Your Practice
If you do only clinical therapy and treatment-purpose assessment, you are generally exempt, charge no HST, and file no HST returns. If you take on insurer, employer, or legal assessment work, review those engagements for taxability and set up separate tracking before the revenue builds up.
Wellspring Accounting classifies these revenue streams and manages HST for psychology practices across Ontario, or read our guide to GST/HST for mental health practitioners.
Related Questions
Is therapy provided by a psychologist exempt?
Yes. Clinical assessment and therapy delivered to an individual for treatment purposes by a registered psychologist are exempt health care services.
Are medico-legal or insurer assessments taxable?
They can be. Where a report or assessment is prepared for a third party — an insurer, employer, or court — rather than for the individual's own health care, it may fall outside the exemption and be taxable. The purpose and recipient of the supply determine the treatment.
Does a psychology practice ever have to register for HST?
Yes, if taxable revenue (certain assessments, consulting, or expert work) exceeds $30,000 over four consecutive quarters. Purely clinical practices with only exempt revenue generally do not register.
Can I claim ITCs on my office and software costs?
Only on the portion attributable to taxable activities. Costs tied to exempt clinical services are not eligible for input tax credits, though they remain deductible for income tax.
Sources
Related Resources
Last Updated: May 2026