Invoicing for contractors: the $500 tier and holdback

A deficient Canadian invoice does not cost you a penalty. It costs your customer their input tax credit — and a general contractor whose credit was denied on your paperwork remembers it for years.

That asymmetry is the reason to build the document once and stop thinking about it.

Build for the top tier, because you are always in it

The Input Tax Credit Information Regulations run in three tiers, and the thresholds moved: they are now $100 and $500, not the $30 and $150 still printed in a great deal of guidance. Essentially every construction invoice lands in the top tier, which needs the supplier's name and GST/HST registration number, the date, the total, the tax shown or a proper tax-included statement — plus the recipient's legal name, the terms of payment, and a description of each supply sufficient to identify it.

Three of those fail routinely on real jobs. The site address is not the recipient's name where the owner, the developer and the paying entity are three companies. "Net 30" has to be printed, not merely agreed. And "renovation work as agreed — $18,400" describes a category, not each supply.

The rate is not one rate, and in two provinces it is not yours to charge

Five percent in Alberta, 13 in Ontario, 14 in Nova Scotia, 15 in New Brunswick, Newfoundland and Labrador and Prince Edward Island. In Quebec the GST and the QST are shown separately, each with its own registration number — a blended 14.975 percent is arithmetically correct and wrong on the document.

Then the provincial sales taxes, where construction runs against the intuition. In British Columbia, services to real property are not subject to PST: you pay PST on your material and do not charge it on the labour. In Saskatchewan the opposite has applied since 1 April 2017 — PST is charged on the whole contract price and material is bought exempt. Same trade, same work, two opposite invoices.

Holdback: ten percent you do not yet owe tax on

Subsection 168(7) of the Excise Tax Act is the most valuable provision in the file. Where an amount is held back under a statute or a written construction agreement pending full and satisfactory performance, tax on that part becomes payable on the earlier of the day it is paid and the day it becomes payable — not the day you invoiced.

So the invoice shows the work in full and the tax on the full value, the holdback is identified, and the tax on the held portion follows the holdback. Remit it early and you have financed the government; invoice the holdback net and you have misstated the price. In Ontario the mandatory annual holdback release since 1 January 2026 moved that date on long contracts, and the tax point moved with it: no tax before the holdback is payable.

A proper invoice is what starts the clock

Nothing runs until one is given. In Ontario the owner then pays within 28 days, a paid contractor pays its subcontractors within seven, and an unpaid one still owes them at 35 days unless it serves a notice of non-payment. Since 1 January 2026 a deficient invoice is deemed proper unless the owner objects in writing within seven days — a change that rewards sending early and reading your mail: 28 days, 7 days, and the new invoice rule.

A contract term making the invoice conditional on prior certification or the owner's prior approval has no effect. Do not let one hold your invoice.

One more number, in one province

In Quebec the RBQ licence number belongs on the invoice itself, every time — where the number has to appear. And what you paid your own subcontractors is reported at year end rather than invoiced: T5018 contract payments.

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What Zirko does here: the tax rate that applied on the day is stored on the issued document rather than looked up afterwards; holdback is applied below the gross, so it never reduces the tax shown; and a finished invoice cannot be edited — the correction is a credit note or cancellation with its own number.