Should I invoice in CAD or USD if my client is in the US?

If you're Canadian, invoice in CAD (your home currency) to avoid currency risk. The buyer can pay in USD and their bank converts it. However, if the buyer strongly prefers USD or your entire business operates in USD, invoicing in USD is acceptable — just be aware you're absorbing the FX risk. For most Canadian small businesses, CAD invoices are simpler.

How much does currency conversion cost?

Bank wires charged 2–4% in conversion fees. Wise (formerly TransferWise) charges 0.6–1.5% and is significantly cheaper. Stripe and PayPal charge 1.5–3% per transaction, plus payment-processing fees. For a $10,000 USD payment, a bank charges $200–$400; Wise charges $60–$150. Over multiple payments per year, this difference is material — consider using Wise for large or frequent USD payments.

Do I need to charge GST/HST to US clients?

No. GST/HST does not apply to services provided by a Canadian supplier to a US customer (a non-resident). You should not charge GST/HST on the invoice. Your invoice should note 'No GST/HST — client is outside Canada' or simply omit the tax line. You still collect GST/HST if you're registered, but it's remitted to the CRA differently (zero-rated supply).

What if a US client is registered for GST/HST in Canada?

If the US client has a Canadian GST/HST registration number, they can request to be exempt from GST/HST. Ask them: 'Do you have a Canadian GST/HST registration number?' If yes, note it on the invoice and show 0% GST/HST. This is rare but happens with large US companies doing business in Canada.

Should I lock in an exchange rate on my invoice?

For small, one-time invoices, no. The buyer will convert at their bank's rate. For large deals (over $20,000) or ongoing contracts, you can lock in an exchange rate. Example: 'Quoted at 1.35 CAD/USD as of May 1, 2026. If exchange rates move by more than 3% before payment, we'll revisit pricing.' This protects you from large FX swings.

What if the exchange rate moves between invoice and payment?

You absorb the risk if you invoiced in your client's currency. If you invoiced a US client for $10,000 USD and the CAD weakened from 1.35 to 1.40 by the time they paid, you receive less CAD than expected. This is why many Canadian small businesses invoice in CAD and let the buyer handle conversion. If you invoice in USD, assume some FX volatility.

Invoicing in USD vs CAD: Cross-Border Currency Decisions

The fundamental decision: whose currency?

If you're a Canadian business invoicing a US client (or vice versa), you face a choice: invoice in your currency or theirs?

There's no universal rule. Deal size, payment frequency, your risk tolerance, and how volatile the rate has been all push the answer one way or the other.

The principle:

Invoice in your home currency when you want to avoid FX risk.
Invoice in the buyer's currency when you're competing for the deal or when they're large enough to demand it.

Invoice in your home currency (CAD for Canadian businesses)

Pros:

No currency risk. You know exactly how much CAD you'll receive.
Simpler accounting. Your invoice amount matches your bank deposit (roughly — minus conversion fees).
Standard practice. Most Canadian small businesses invoice in CAD.
Less negotiation. The buyer expects to pay in their own currency anyway.

Cons:

The buyer has to convert, which costs them 1–3%. They may bake this cost into their budget and offer you less (conscious or not).
For large deals (over $50,000), some US buyers will ask you to invoice in USD for simplicity.
You're not accommodating their preference, which may hurt relationship-building.

When to use it:

Deals under $20,000.
You have multiple US clients (it's not worth setting up USD accounting for each relationship).
You're a solopreneur or small business and want to keep things simple.
The buyer hasn't asked for a specific currency.

Example: A Canadian web designer invoicing a US client: "Invoice amount: $5,500 CAD. Payment via bank transfer (USD converted at your bank's rate), Wise, or Stripe."

Invoice in the buyer's currency (USD for US clients)

Pros:

Easier for the buyer. They pay in USD without conversion, which removes friction.
Competitive advantage. Showing pricing in their currency signals that you understand their market.
Reduces negotiation. Some US buyers will only accept USD invoices.
Better for large deals. For $50,000+, offering USD invoicing signals professionalism.

Cons:

Currency risk. If CAD strengthens between invoice and payment, you receive fewer CAD.
More complex accounting. You need to track USD accounts or convert regularly.
Conversion costs still exist. Even if you invoice in USD, you'll eventually convert to CAD and pay conversion fees.
Ongoing relationships. If USD prices fluctuate, you may need to renegotiate.

When to use it:

Deals over $20,000.
Your business operates primarily in USD (multiple US clients, USD revenue, USD expenses).
The buyer has asked for USD pricing.
You have a long-term relationship with the buyer.

Example: A Canadian consultant with multiple US clients: "Invoice amount: $8,000 USD. Payment via bank transfer, Wise, or Stripe."

Currency conversion costs: where money goes

If you invoice in USD and eventually convert to CAD, here's what you pay:

Bank wire transfer:

Conversion spread: 2–4%
Wire fee: $15–$50
Total cost on $10,000 USD: roughly $200–$400 (2–4%)

Wise (TransferWise):

Conversion rate: near mid-market (0.6–1.5% markup)
Transfer fee: $1–$5 (depending on amount)
Total cost on $10,000 USD: roughly $60–$150 (0.6–1.5%)

Wise is significantly cheaper for large transfers.

Stripe:

Payment processing fee: 2.9% + $0.30 for cards (ACH is 0.8%, capped at $5)
Conversion rate: 1–2% markup on top of processing
Total cost on $10,000 USD: roughly $300–$600 (3–6%) for card

Stripe is convenient but expensive for FX conversion.

PayPal:

Payment processing fee: 3.49% + $0.49
Conversion markup: 2–3%
Total cost on $10,000 USD: roughly $500–$700 (5–7%)

PayPal is the most expensive option.

Strategy: how to minimize FX costs

If you're invoicing in USD and need to convert to CAD, here's the cost-minimizing approach:

For regular USD income: Set up a USD business account with your bank or with Wise. Deposit USD payments directly; convert in bulk (monthly or quarterly) at better rates than per-transaction conversion. Bulk conversions may get you rates closer to 1–2% instead of 3–4%.
For large one-time payments: Use Wise. For a $20,000 USD payment, Wise saves you $150–$300 compared to a bank wire.
Use payment processors carefully. Stripe is convenient but expensive for FX. If a US client will pay by bank transfer instead of card, offer that as the preferred method — it avoids the 2.9% processor fee on top of conversion costs.
Invoice in batches. If you have multiple US invoices, batch them together and convert once per month instead of converting each invoice individually.

GST/HST and cross-border invoicing

This is where most Canadian businesses get confused. Here are the rules:

Canadian supplier to US customer:

You do NOT charge GST/HST. The supply is "zero-rated" under Canadian tax law, meaning you don't collect tax but you can claim input tax credits on expenses.

Your invoice should show:

Amount: $5,000 CAD (or USD)
Tax: 0% GST/HST — supply is zero-rated (or simply omit the tax line)

You still remit GST/HST to the CRA on the sale (as a $0 amount), but don't collect it from the customer.

Canadian supplier to US customer who's registered for GST/HST in Canada:

This is rare, but it happens with large US companies. If the customer has a Canadian GST/HST registration number, ask them: "Are you registered for GST/HST in Canada?"

If yes, they're reverse-charged (they remit GST/HST to the CRA themselves). Your invoice shows:

Amount: $5,000 CAD
GST/HST: 0% — customer is GST/HST registered

Include their registration number on the invoice.

US supplier to Canadian customer:

You do NOT charge GST/HST either (the supply is zero-rated from a US perspective). Your invoice shows the amount in USD with no Canadian tax.

The Canadian buyer may be liable for GST/HST (reverse charge), but that's their responsibility, not yours.

Special case: physical goods (not services) to US:

If you're selling physical products to the US, the rules are the same — no GST/HST. But provincial sales tax, US state sales tax, and tariffs come into play, which is more complex. For services, this isn't an issue.

Multi-currency pricing in long-term contracts

If you have an ongoing relationship (retainer, annual contract), consider a multi-currency clause:

"This contract is priced at $X CAD or $Y USD. Exchange rate: 1 CAD = 0.75 USD (as of [date]). If the exchange rate moves by more than 5% for more than 30 consecutive days, either party may request to renegotiate pricing."

This protects both of you from extreme FX swings without requiring a new contract every time the loonie moves.

The practical workflow for Canadian invoices to US clients

Agree on a currency at the start. Email: "We can invoice in CAD or USD — what's your preference?"
Invoice in that currency. Example: "Invoice Amount: $5,000 CAD. Exchange reference rate (informational only): 1 CAD = 0.75 USD."
Provide payment instructions. Example: "Payment via bank transfer (USD converted at your bank's rate), Wise, or Stripe."
Accept the payment. The buyer's bank, Wise, Stripe, or PayPal will handle conversion. You receive it in CAD (or USD if you have a USD account).
Convert to CAD if needed. If you received USD and need CAD, use Wise for large amounts.

W-8BEN for cross-border work

If you're a Canadian (non-US tax resident) invoicing a US buyer, the buyer may ask for a W-8BEN form (Certificate of Foreign Status of Beneficial Owner for US Tax Withholding and Reporting). The W-8BEN itself doesn't have a dollar threshold — US withholding agents are supposed to collect one from any foreign payee whose income is subject to US withholding, regardless of amount. In practice, many US payers wait until the engagement crosses the 1099-NEC reporting threshold ($2,000 per payee per year for 2026 payments under the One Big Beautiful Bill Act, raised from $600) before bothering, but you may be asked at any amount.

This is a US tax form that tells the buyer, "I'm not a US tax resident, so don't withhold US taxes on my income." It's simple to fill out; the IRS provides the form for free. Having it ready avoids payment delays.

You'll only need one W-8BEN per buyer, and it's valid for three years.

Invoice examples

Canadian business invoicing a US client in CAD:

Invoice: INV-0150
Due Date: June 15, 2026

Description: Website redesign project
Amount: $5,000.00 CAD

Tax: $0.00 (zero-rated supply — client is outside Canada)
Total: $5,000.00 CAD

Payment: Bank transfer (USD or CAD), Wise, or Stripe

Canadian business invoicing a US client in USD:

Invoice: INV-0150
Due Date: June 15, 2026

Description: Website redesign project
Amount: $3,750.00 USD

Tax: $0.00 (client is outside Canada)
Total: $3,750.00 USD

Payment: Bank transfer, Wise, or Stripe
Exchange reference: 1 CAD = 0.75 USD (informational)

US business invoicing a Canadian client (no GST/HST):

Invoice: INV-0150
Due Date: June 15, 2026

Description: Consulting services
Amount: $5,000.00 USD

Tax: $0.00
Total: $5,000.00 USD

Payment: Bank transfer or PayPal

When currency decisions matter: case studies

Case study 1: Canadian freelancer, US client, small retainer

A Canadian graphic designer invoices a US design agency $2,000 USD per month.

Decision: Invoice in CAD.

Why: The retainer is ongoing, so currency swings matter. By invoicing in CAD (~$2,700/month), the designer hands the FX risk to the agency and always knows the CAD amount coming in. The US agency converts at their bank's rate; the 1–3% conversion cost is baked into their budget. Pricing in CAD also lets the designer adjust rates annually without renegotiating against the exchange rate every month.

Math: At 1.35 CAD/USD, the designer prices the retainer at $2,700 CAD. Whether the loonie sits at 1.35 or 1.40 when the agency pays, the designer still receives $2,700 CAD. The agency's USD cost moves with the rate, not the designer's revenue. That's the point of invoicing in your home currency.

Case study 2: US consultant, Canadian corporate client, large project

A US management consultant bills a major Canadian retailer for a $75,000 project.

Decision: Invoice in USD.

Why: The deal is large and the client is enterprise. Canadian corporations have USD accounts for US vendors. Invoicing in USD ($75,000) is simpler than the CAD equivalent ($101,250). The client converts at their treasury rate (often better than retail rates) and the consultant's bank converts to USD.

Cost: Consultant receives $75,000 USD. At 1.35, that's $101,250 CAD before fees. Converting via Wise (~1.5% = about $1,125) nets roughly $100,125 CAD. Still cleaner than invoicing in CAD and dealing with FX ambiguity.

Case study 3: Canadian business, recurring US clients, multiple deals

A software company with 20+ US clients, each paying $1,000–$5,000 monthly.

Decision: Set up USD accounts and invoice in USD.

Why: Instead of converting each invoice individually (expensive), the company collects all USD payments into a USD business account. Monthly, they convert $50,000 USD to CAD in one batch, at much better rates than per-transaction. Stripe/PayPal per-transaction conversion runs 2–3%; bulk Wise conversion is closer to 0.8–1%. Savings: $800–$1,200 per month.

Currency fluctuations and profitability

Currency risk is real. A Canadian developer who invoices in USD is exposed to every move in the rate over the year. The swing cuts both ways:

Invoice: $1,000 USD per month × 12 = $12,000 USD
At 1.35 CAD/USD: $16,200 CAD
At 1.45 CAD/USD (USD stronger): $17,400 CAD — $1,200 more
At 1.25 CAD/USD (USD weaker): $15,000 CAD — $1,200 less

For large USD-invoicing businesses, this swing is material. Many lock in exchange rates or hedge, but that's beyond the scope of most small businesses. The simple strategy: invoice in your home currency to avoid the risk.

Ready to invoice internationally?

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