Most construction work in Canada is taxable, so if you’re registered you charge GST/HST on your quotes and invoices, on labour and materials together. Which tax applies, and at what rate, depends on the province where the work is done, not where your business is based.
Rates by province
| Province or territory | Tax on construction work |
|---|---|
| Ontario | 13% HST |
| Nova Scotia | 14% HST |
| New Brunswick, Newfoundland and Labrador, Prince Edward Island | 15% HST |
| Alberta, Yukon, Northwest Territories, Nunavut | 5% GST |
| British Columbia | 5% GST. On work to real property, the contractor usually pays the 7% PST on materials and doesn’t charge PST on the contract. |
| Manitoba | 5% GST. The contractor pays the 7% RST on materials installed in real property. |
| Saskatchewan | 5% GST, plus 6% PST on the whole construction contract, labour and materials. |
| Quebec | 5% GST plus 9.975% QST, both administered by Revenu Québec. |
These are simplified. Read your province’s guidance for contractors before relying on them, especially in BC, Manitoba and Saskatchewan, where the treatment depends on the type of contract.
Registering
You must register for GST/HST once your taxable sales pass $30,000 in a single calendar quarter, or over the last four consecutive quarters. Below that you’re a small supplier. You can still register voluntarily, which lets you claim back the tax you pay on materials and tools, but then you charge tax on everything you sell. Your GST/HST number is your nine-digit business number followed by RT0001.
Input tax credits
Once registered, you claim back the GST/HST you pay on business purchases (materials, tools, fuel, the truck) as input tax credits when you file your return, so the tax on materials isn’t a cost to you. Keep every supplier invoice, because the CRA can refuse a credit without the right paperwork.
What your invoice must show
What the CRA expects on an invoice depends on the amount:
- Under $100: your business name, the date and the total.
- $100 to $499.99: also your GST/HST number and the tax charged, or a statement that the total includes it.
- $500 or more: also the client’s name, a description of the work, and the payment terms.
TakeoffYard prints your GST/HST number on quotes and invoices once you add it in Settings, and sets the tax from your province.
On the quote
Show the price before tax, the tax amount and its rate, and the total. Homeowners compare totals, so make it obvious whether a figure includes HST or GST. A quote that leaves 13% off the bottom line looks cheaper than it is, and that surprise lands on the invoice.
Not registered?
Don’t charge GST/HST and don’t show a tax line. Watch your sales each quarter against the $30,000 threshold, because once you go over it you have to start charging tax and register, generally within 29 days.
Common mistakes
- Charging the wrong rate because the job is in a different province
- Quoting pre-tax prices to homeowners without saying so
- Losing input tax credits for lack of proper supplier invoices
- Charging GST/HST before registering
The GST/HST calculator adds or removes tax at any rate, and TakeoffYard jobs show GST/HST on every quote and invoice.
Quotes, deposits and invoices
Tax follows the paperwork, so keep it consistent from quote to invoice. If you take a deposit, check the CRA’s guidance on when GST/HST is due on a deposit, and show the deposit and its tax clearly on your invoices. When the job is finished, the final invoice shows the full price, the tax, the deposit already paid and the balance due. TakeoffYard converts an accepted quote into an invoice with the same lines and tax, so nothing is retyped.
Prices that include tax
Homeowners compare totals. If one contractor quotes a figure that includes tax and another quotes a figure that doesn't, the second looks cheaper until the invoice arrives. Make your quotes easy to compare: show the total the client will actually pay, and break the tax out underneath. That's fairer to the client, and it stops you losing work to quotes that only look cheaper.
Keep records
Keep copies of every quote, invoice and supplier receipt, organized by job. The CRA requires you to keep your records for six years from the end of the year they relate to, and most businesses now file GST/HST returns online. A backup of your TakeoffYard jobs is a useful extra record of what was quoted, but it isn't a substitute for proper accounting records.
Get advice
Tax rules change, and the details depend on your business. This guide explains the basics so you can ask the right questions. It isn't tax advice. For anything unusual, or if you're unsure which rate applies, ask an accountant who works with contractors.
Common questions
Do I charge GST/HST on labour as well as materials?
Yes. If you’re registered, GST/HST applies to the whole supply, labour and materials together. Provincial sales tax is different: in BC and Manitoba the contractor usually pays PST or RST on materials instead of charging it, while Saskatchewan charges PST on the whole contract.
What if the job is in a different province?
Charge the tax that applies where the work is done. An Ontario contractor building a deck in Alberta charges 5% GST, not 13% HST. Work in Quebec also brings in the QST, which may mean registering with Revenu Québec.
Can I claim the tax on materials if I’m not registered?
No. If you aren’t registered, the GST/HST you pay on materials is part of your cost, so build it into your prices.
This guide is general information for estimating. It is not engineering, legal or tax advice. Check local codes and your inspector for your project.