How Canadian Trade Contractors Should Invoice for GST and HST (Without Getting It Wrong)

A plumber in Barrie drives up to a cottage near Bracebridge on a Saturday morning. Frozen pipe, burst line, the owner is already mopping. Four hours later the job is done, the homeowner is happy, and the plumber writes the invoice that night at the kitchen table. He charges 13% HST because that is what he always charges. The cottage owner pays without a word. Six months later his accountant flags it: the customer's billing address was in Montreal, the work was in Ontario, and the rules on which tax to charge are not what he thought.

This is the most common invoicing mistake Canadian trade contractors make. It is not laziness. The rules are genuinely awkward, and most accounting software does not walk you through them. Here is what actually applies to your invoices, what a correct one looks like, and where the edge cases quietly cost you money.

Why GST/HST trips up Canadian contractors

Most contractors learn GST/HST the same way: a friend tells them the rate for their home province, they put it in their invoice template, and they never touch it again. That works right up until the first out-of-province job, the first cottage customer, or the first commercial client who asks for a proper tax breakdown.

The rules get harder because Canada does not have one sales tax. It has three overlapping systems. GST is federal. HST is a combined federal-provincial tax in five provinces. PST and QST are separate provincial taxes that sit on top of GST in four more. Which one applies is not decided by where your truck is parked. It is decided by rules the CRA calls "place of supply."

The good news: once you know the place-of-supply rule and your province's rate, the math is simple. The risk is not the calculation. It is charging the wrong rate, missing a registration, or invoicing a reimbursable expense the wrong way.

The place-of-supply rule: charge the customer's province, not yours

For most trade work, you charge the tax rate of the province where the service is performed or where the real property is located. Not where your business is registered. Not where you live. Where the job is.

Take the Barrie plumber and the Bracebridge cottage. The cottage is in Ontario. The work is done in Ontario. The correct rate is 13% HST, even if the customer's billing address, cheque, and accountant are all in Quebec. The property is Ontario real property, so Ontario tax applies.

Flip the scenario. An Ontario plumber drives to a cottage near Gatineau, Quebec, for an emergency call. The property is in Quebec. The correct invoice charges 5% GST plus 9.975% QST, because the service is performed on Quebec real property. The fact that the contractor is based in Ontario is irrelevant to the rate.

This rule catches contractors near any provincial border. Contractors near Ottawa who cross into Gatineau. Contractors in Lloydminster who work both sides of the Alberta-Saskatchewan line. Contractors in Moncton who take calls in Nova Scotia. If you regularly work across a border, you may need to register for QST or PST in that province, not just GST/HST. That is worth a conversation with your accountant before you take the next job, not after.

Province-by-province: which taxes apply where

Here is the practical breakdown. If you want a deeper definition of the terms, see the GST/HST glossary entry.

HST provinces (one combined rate)

• Ontario: 13%
• Nova Scotia: 15%
• New Brunswick: 15%
• Newfoundland and Labrador: 15%
• Prince Edward Island: 15%

In these provinces you charge one line: HST at the rate above. You do not charge GST separately.

GST + PST provinces (two separate lines)

• British Columbia: 5% GST + 7% PST
• Saskatchewan: 5% GST + 6% PST
• Manitoba: 5% GST + 7% RST (Manitoba calls its tax "Retail Sales Tax")

In these provinces your invoice shows two tax lines. PST rules on labour vary. In BC, most repair and installation labour on real property is not taxed for PST, but materials usually are. In Saskatchewan and Manitoba, construction services have their own rules. Check your province's bulletin.

GST + QST (Quebec)

• Quebec: 5% GST + 9.975% QST

Quebec uses its own QST system, administered by Revenu Québec. Two lines on the invoice.

GST only

• Alberta: 5%
• Northwest Territories: 5%
• Nunavut: 5%
• Yukon: 5%

One line, 5% GST. No provincial sales tax.

A note on small suppliers: if your worldwide taxable revenue is under $30,000 over four consecutive calendar quarters, you are not required to register for GST/HST and you do not charge it. Once you cross $30,000, you must register. Most full-time solo contractors cross it in their first year.

What a correct contractor invoice actually looks like

Here is a sample for a residential furnace repair in Ontario. Labour, one replacement part, HST on both.

| Description | Qty | Rate | Amount | |---|---|---|---| | Labour — diagnostic and repair (2.5 hrs) | 2.5 | $140.00 | $350.00 | | Parts — ignitor assembly | 1 | $185.00 | $185.00 | | Subtotal | | | $535.00 | | HST (13%) — ON | | | $69.55 | | Total | | | $604.55 |

Your invoice should also show:

• Your business name and address
• Your GST/HST registration number (nine digits, then "RT0001")
• The customer's name and the service address
• The invoice date and a unique invoice number
• A brief description of the work

The GST/HST registration number is not optional once you are registered. Customers who are themselves registered need it to claim their input tax credits. Missing it can hold up commercial payment.

For a Quebec job, the same invoice would show two tax lines: GST 5% ($26.75) and QST 9.975% ($53.37). For an Alberta job, one line: GST 5% ($26.75). For a BC job with taxable materials, you would split the parts line from the labour line so PST applies only to the parts.

The edge cases that cost contractors money

A few situations that look simple and are not.

Zero-rated supplies. These are goods and services taxed at 0% where you still claim input tax credits on your costs. Most trade services are not zero-rated. The exception contractors occasionally hit is exported goods or certain work for non-residents on specific property. Read zero-rated supplies before you assume anything on your invoice belongs in this bucket. When in doubt, charge the normal rate and let your accountant correct at year-end.

Exempt services. Some residential rent, most health care, and most financial services are exempt. Trade contractors almost never bill exempt services. If someone asks you to invoice "without tax because it is exempt," verify it before you agree.

Mixed commercial and residential jobs. The rate does not change between a residential and a commercial customer. What changes is how the customer treats the tax. Commercial customers recover the GST/HST you charge through input tax credits. Residential customers do not. Your job is to charge the right rate and show your registration number clearly.

Reimbursable expenses. When you pass through a cost (a permit fee, a dumpster rental, a parking ticket that is not one), the tax treatment depends on whether you are invoicing the expense as a disbursement or as part of the work. Disbursements that you paid as the customer's agent are typically passed through without adding tax. Costs you incurred to do the job are part of your taxable supply and are taxed at your regular rate. Contractors routinely get this wrong on permit pass-throughs.

Crossing provinces mid-project. If a job spans two provinces (rare for trades but it happens with multi-site commercial work), the general rule is that the rate follows the location of the work for each portion. Split the invoice by location. Do not average the rates.

What your software should be doing for you

Most invoicing tools handle single-province work fine. They let you save a default tax rate and apply it automatically. Where they fall short is the moment the job is not simple: an out-of-province cottage, a reimbursable permit, a job that crosses a provincial line.

A good tool should look up the rate by the service address, not your business address. It should split taxable from non-taxable lines when PST applies only to materials. It should treat disbursements as a separate line type with its own tax behaviour. And it should remind you, not your accountant six months later, when a job pattern suggests you need a QST or PST registration.

Fixtor is built for Canadian contractors. The provincial tax engine picks the correct rate based on the service address, handles mixed PST/GST provinces on labour-and-materials jobs, and treats reimbursables as their own line type. Fixtor is free for solo contractors, and the common tax questions we hear from early users are answered in the GST/HST FAQ.

This article is general information, not tax advice. Rates are current as of 2026. Check the CRA website and talk to your accountant about your specific situation.