Canadian Contractor Tax Guide 2026 — GST, HST, QST, PST for Trades

If you run a contracting or service business in Canada — plumbing, electrical, roofing, HVAC, landscaping, general contracting, or any trade — understanding sales taxes is essential for staying compliant and getting paid correctly.

This guide covers

• When you must register for GST/HST (and provincial taxes)
• Current rates by province/territory (2026)
• What to charge tax on (labour, materials, equipment, services)
• How to show taxes on your invoices
• Input Tax Credits (ITCs) basics
• Filing and remittance overview
• Common mistakes Canadian trades make
• Links to official resources + our free tax calculators

Use this alongside our free invoice generator and provincial calculators so the numbers on your invoices are always accurate.

2026 GST/HST/QST/PST/RST Rates by Province:

Note: Rates are current as of April 2026. Always double-check CRA and Revenu Québec for your exact situation, especially if you cross borders or do specialized work (new housing, exports, etc.).

When Do You Need to Register?

GST/HST (CRA)

• Small supplier threshold: generally $30,000 in worldwide taxable supplies over any single calendar quarter or over four consecutive calendar quarters.
• Once you exceed it, you must register and start charging GST/HST.
• You can register voluntarily earlier (recommended if you have significant taxable purchases — lets you claim ITCs sooner).
• After registration: file returns (monthly, quarterly, or annual depending on revenue), remit net tax, and file even if $0.

QST (Revenu Québec):

• Similar $30,000 threshold for most businesses.
• If you operate in Québec or make taxable supplies there, you generally need to register for QST as well.
• File with Revenu Québec separately from CRA in most cases.

PST/RST (BC, SK, MB)

• Thresholds and rules differ from GST/HST. Some have no threshold or lower ones for vendors.
• If you regularly sell or lease taxable goods in the province, or provide certain taxable services, you may need to register even below the GST threshold.
• Check each province's website. For example, BC has vendor registration rules that can apply at lower volumes.

Practical Advice for New Contractors

• Track your revenue carefully from day one.
• Many trades register voluntarily once they approach $20-25k because clients (especially commercial and GCs) often prefer or require tax-registered suppliers.
• Once registered, you must charge tax on taxable supplies and can claim ITCs on GST/HST you paid on business purchases.

What to Charge Tax on (Trade Examples)

Almost all work done by plumbers, electricians, roofers, HVAC techs, etc. for residential and commercial clients is a taxable supply.

• Labour / service calls / hourly work: taxable.
• Materials and parts you supply and install: taxable (you charge tax on your selling price).
• Equipment sales + install (furnaces, water heaters, etc.): taxable.
• Permits and inspection fees you arrange: usually taxable as part of the supply.
• Some exceptions/nuances:
• Certain new housing or substantial renovations may have different rules (builders have their own GST/HST rules).
• Exports of goods/services outside Canada can be zero-rated.
• Some agricultural or specific industry work may be exempt or zero-rated.
• Always confirm with a tax pro if your work is unusual.

For most everyday trade work: assume it is taxable and charge the applicable rate(s) for the province where the work is performed or where the client is located (rules can be based on "place of supply").

How to Show Tax on Invoices (Best Practice)

• Use line-item tax calculation when possible (tax calculated on each line's subtotal). This matches how most contractors quote and is clearest for clients.
• Or use tax summary at the bottom with clear rate(s) shown.
• Always display:
• Subtotal (pre-tax)
• Tax line(s) with rate(s) and name (e.g., "HST 13%", "TPS 5% + TVQ 9.975%")
• Total due
• Include your registration number(s) prominently (GST/HST #, QST # if applicable).
• Our invoice generator and calculators do this math automatically and correctly for Canadian rates.

Input Tax Credits (ITCs)

When you are registered, you can generally claim back the GST/HST (and sometimes provincial) you paid on taxable business purchases and expenses:

• Tools, trucks, fuel (business portion), materials you buy to resell/install, office supplies, software, marketing, etc.
• Keep good records (receipts, invoices from suppliers).
• Claim on your GST/HST return.
• This is one of the biggest benefits of registering early if you have significant expenses.

Common contractor expenses that generate ITCs: vehicle expenses (gas, repairs, lease), tools and equipment, materials, subcontractor payments (if they charged you tax), professional fees, advertising.

Filing and Remittance Basics

• GST/HST returns: frequency based on annual taxable revenue (annual filers under $1.5M or so, quarterly more common, monthly for large).
• You remit (or get refunded) the difference between tax you collected and ITCs you claim.
• Deadlines are strict — late filing and late payment penalties add up quickly.
• Many contractors use their accountant or bookkeeper to prepare and file, especially in the first couple of years.
• Keep 6+ years of records.

Common Mistakes Canadian Trades Make

1. Not registering when they cross the threshold (or registering too late).

2. Forgetting to charge tax on materials/parts or on the full invoice amount.

3. Using the wrong rate for the province (especially when working across borders).

4. Not including registration number on invoices (clients and auditors notice).

5. Poor record keeping for ITCs — missing out on refunds.

6. Assuming "the client will add the tax" — no, you must charge and collect it.

7. Not charging tax on deposits or progress draws when required.

8. Mixing personal and business expenses without proper allocation.

Provincial Quick Links (official)

• CRA GST/HST: canada.ca (search GST/HST for businesses, RC4022 small supplier)
• Revenu Québec TPS/TVQ: revenuquebec.ca
• BC PST: gov.bc.ca (PST for businesses)
• Saskatchewan PST, Manitoba RST: respective provincial finance/tax sites.
• Always use official sources. Our tools use published rates but are not a substitute for professional advice.

How Our Tools Help

• Free Invoice Generator: builds correct tax invoices for any province, saves your registration numbers, includes e-transfer requests.
• Line-item Tax Calculators: GST QST Québec, HST Canada, BC PST, SK PST, MB RST — perfect for quick quotes or checking your own math before sending.
• Tax reports in the app (Premium) help with filing summaries.

Recommended Next Steps

1. Check your current revenue against the $30k threshold.

2. If approaching or over, register (or confirm you should).

3. Set up your business details + tax numbers in an invoicing tool that understands Canadian rates.

4. Use our calculators while quoting.

5. Talk to an accountant familiar with trades in your province — especially for ITC tracking, vehicle expenses, and home office if applicable.

This guide is updated annually. For 2026 we have confirmed rates as listed. If CRA or provinces announce changes mid-year we will update.

Related Guides

• How to Get Paid Faster as a Canadian Contractor
• Contractor Invoice Checklist
• Provincial pages: Ontario HST, Alberta GST, BC PST, Québec TPS TVQ
• Trade templates (plumber, electrician, roofer, HVAC, general contractor)
• Comparisons: best tools for handling Canadian taxes simply