Bookkeeping for contractors and trades in BC
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Subcontractor slips, WorkSafeBC clearances and PST on materials are where a construction business’s books go wrong. We keep them straight every month.
Short answer: a BC contractor or trades business needs more than sales and expenses in its books. It needs subcontractor payments tracked for T5018 slips, a WorkSafeBC clearance letter on file for each subcontractor, PST handled the contractor’s way on materials, and payroll for crews. Orbis Accounting Ltd. does that bookkeeping monthly, files GST at 5% and PST, runs payroll, and prepares the T1 or T2 at year end.
What is hard in a contractor’s books?
- Subcontractor payments. A business whose main activity is construction reports what it paid subcontractors on T5018 slips, so every payment has to be coded to the right subcontractor through the year.
- WorkSafeBC clearance letters. If a subcontractor does not pay its premiums, the business that hired it can be held liable, so a current clearance letter for each one matters before you pay.
- PST on materials. On a real property contract the contractor generally pays PST on the materials it installs, and gets no PST credit back. That cost belongs in the job price.
- Workers who might be employees. Calling someone a subcontractor does not make them one, and getting it wrong means payroll deductions you did not take.
- Job costs. Knowing which job made money needs materials, labour and subcontract costs tagged to each job, not only to the year.
What we do each month for a trades business
- Reconcile the bank and card accounts, and code every subcontractor payment to its payee.
- Keep a clearance-letter list against the subcontractors you pay.
- File GST and PST on schedule, with the PST on materials treated the right way.
- Run payroll for crews, remit source deductions and issue T4s.
- Prepare the T5018 information at year end from payments already coded all year.
Who this fits, and who it does not
It fits owner-run trades and construction businesses in BC: renovators, general contractors, electricians, plumbers, framers, painters, landscapers and similar, sole proprietors or incorporated. It does not fit a business that needs certified financial statements for bonding or a large surety, which is CPA work. Orbis is a bookkeeping practice, not a CPA firm.
Do I have to file T5018 slips?
If your business’s main source of income is construction and you pay subcontractors for construction services, generally yes. The T5018 guide below explains who reports and what goes on the slip.
Do I pay PST on materials as a contractor in BC?
On a real property contract, the contractor generally pays PST on the materials it installs and cannot claim it back. The PST guide for contractors explains when a customer can agree to pay it instead.
Why does a WorkSafeBC clearance letter matter?
Because a business can be liable for a subcontractor’s unpaid premiums. A current clearance letter before you pay is the protection.
Can you catch up a contractor’s books that are years behind?
Yes. Catch-up work is quoted as one number before it starts, then the monthly work begins.
T5018 slips for subcontractor payments →
WorkSafeBC clearance letters for subcontractors →
PST on materials for contractors →
Tell us what your business does
Tell us your trade, roughly how many transactions a month and what you need filed, and a written plan and a fixed monthly price follow within one business day.
info@orbisaccounting.ca