Accounting for Cleaning and Janitorial Companies in BC
Cleaning businesses live on thin margins, recurring contracts and crews who move between sites all day. The accounting questions follow from that: who is an employee, what each contract really earns, and how much the supply cupboard costs.
EverStone CPA works online with BC cleaning owners, from a solo residential cleaner to a commercial crew, at fees agreed in writing.
Quick answer: A BC cleaning company charges 5% GST once it is registered, but usually no PST on cleaning buildings. The big risks are paying cleaners as contractors when they work like employees, skipping WorkSafeBC coverage, and not knowing which contracts make money. Clean books per contract fix most of that.
Who this page is for
A one-person residential cleaning business and a janitorial company with night crews in office towers share an industry, not a set of books. We work with both, and with the stages in between.
- Residential and move-out cleaners, solo or with a small team
- Commercial janitorial companies on monthly building contracts
- Post-construction and renovation cleanup crews working for builders
- Carpet, window, pressure-washing and specialty cleaners
- Franchisees of a cleaning brand paying royalties
- Owners who have grown past spreadsheets and want proper payroll
Most clients come to us at a turning point: hiring the first cleaners, signing the first large contract, or getting a letter from the CRA or WorkSafeBC.
When a cleaning business should incorporate
A solo cleaner with a few regular homes rarely needs a company. A janitorial firm with staff, liability exposure and a profit that exceeds the owner’s living costs often does.
Unincorporated and simple
Income and costs go on the T2125 with your personal return, due June 15 for the self-employed with any balance owed by April 30. Low admin, but profit is taxed at your personal rate whether you spend it or not.
Incorporated for growth
Commercial clients sometimes prefer contracting with a company. Profit retained in the corporation is taxed at the 11% combined small-business rate on the first $500,000, leaving more to fund equipment and a payroll cushion.
The cost of a company
A T2 every year, separate banking, annual registry filings and more discipline about drawing money. If the business pays out everything it earns, that admin may not pay for itself yet.
Test the numbers with the incorporation calculator, or read should I incorporate? When the time is right, incorporation advice sets it up properly.
Salary or dividends for a cleaning company owner
Owners of cleaning companies often still clean, quote jobs and cover sick shifts. Your pay can reflect that work through a salary, dividends, or a blend.
Salary
Runs through the same payroll as your crew. It builds CPP and RRSP room and is a deductible cost of the company, which matters when you bid contracts on cost.
Dividends
Taken from after-tax profit with a T5 slip and no source deductions. Simpler month to month, but no CPP and no RRSP room, so retirement savings need another plan.
Family in the business
A spouse who does scheduling, invoicing or cleaning can be paid a reasonable wage. Dividends to family members who are not active can run into the tax on split income rules.
Use the salary vs dividends calculator, and see paying your spouse a salary.
GST and PST on cleaning services in BC
Cleaning services are taxable for GST. You must register once your taxable sales pass $30,000 in four consecutive calendar quarters, and many owners register sooner so they can claim input tax credits on supplies and vehicles.
PST works differently. Cleaning a building is generally a service to real property, which does not carry PST. Cleaning or treating movable goods, such as rugs taken off site or upholstery, can be a different matter, so we review your service list before you set up invoices.
On the buying side, you pay 7% PST on taxable supplies and equipment: chemicals, vacuums, floor machines and uniforms. That PST is a cost you cannot recover, so price it into your rates. Small operators should also compare the regular method with the GST quick method. Our GST and PST filing service handles both returns.
Cleaners as employees or subcontractors
This is the single largest tax risk in the industry. A cleaner who works your schedule, at your clients, with your supplies and your checklist, usually looks like an employee to the CRA.
If they are employees
Run payroll, deduct CPP, EI and income tax, remit on time and issue T4s by the last day of February. Pay 4% vacation pay, rising to 6% after five years, and final pay within 48 hours of termination.
If they are true subcontractors
They run their own business: set their own hours, bring their own equipment, carry insurance and can work for others. Keep a written agreement and invoices for each period, and report fees on a T4A where required.
Travel time between sites
Time spent driving between client sites during a shift is generally working time. Mileage paid to cleaners who use their own cars should follow a reasonable per-kilometre rate and a log.
Read subcontractor vs employee. Our payroll services take over the pay runs and remittances.
WorkSafeBC and clearance letters for cleaning contracts
Commercial clients, property managers and builders often ask for a WorkSafeBC clearance letter before they pay you. The letter confirms your account is registered and in good standing.
That means registering, reporting payroll accurately and paying premiums on schedule. If you hire subcontract cleaners without their own coverage, you can become responsible for their premiums. We reconcile your reported payroll to the T4 summary each year so the numbers agree.
Post-construction cleaners paid by a builder may also receive a T5018 slip from that builder. Keep your own invoice list so you can match their slip to your revenue.
Bookkeeping by contract, crew and supply run
Revenue by contract
Recurring building contracts, one-off deep cleans and move-outs belong in separate revenue lines. That shows which work pays and which only keeps crews busy.
Scheduling and invoicing apps
Whatever booking or job app you use, we reconcile its invoices and card payouts to the bank. Card fees are recorded as an expense rather than netted away.
Labour cost per site
Hours from timesheets or the app are allocated to each contract. Comparing labour to the contract price each month shows when a building needs a price increase.
Receivables
Commercial clients pay on terms, and some pay late. A monthly aged list keeps unpaid invoices from becoming bad debts.
Our monthly bookkeeping starts from $300 a month with GST and PST filing included. If you have fallen behind, see behind on bookkeeping.
Vans, floor machines and supplies
Vans that carry crews and equipment are usually the largest purchases. Track business use with a log, especially if a vehicle also goes home at night. See the vehicle and mileage guide.
Floor scrubbers, carpet extractors and pressure washers are capital assets claimed through CCA over time, not expenses in the month you buy them. Low-cost tools and consumable chemicals are usually expensed. The equipment CCA guide explains the classes.
Keep supplies purchased for a specific client separate if you bill them back. Recharged supplies are part of your sale and carry GST when you invoice them.
Month-end checklist for a BC cleaning company
- Invoice every contract. Confirm each recurring client was billed for the month, plus any extra cleans.
- Collect timesheets. Match hours to sites before payroll closes.
- Check remittances. Source deductions paid to the CRA by the due date.
- Review subcontractor invoices. Each one should match the work and carry the cleaner’s business details.
- Reconcile app payouts and the bank. Card deposits back to the invoices inside them.
- Chase overdue accounts. Follow up anything past its terms.
- File supply receipts. Chemicals, paper products, equipment repairs and fuel.
- Update the vehicle log. Business kilometres for each van.
- Compare labour to price. Flag any contract where wages are eating the margin.
Share it with your office manager: everstonecpa.com/accountant-for-cleaning-companies-bc#month-end-checklist.
Our services and fees for cleaning businesses
- Self-employed T1 for a solo cleaner: commonly $250–$450
- Monthly books with GST and PST filing: from $300 a month
- Payroll for crews, including T4s and WorkSafeBC reconciliation: quoted with your bookkeeping
- Year-end T2 and statements: quoted after a free consultation
- Fractional controller once you run several crews: from $1,500 a month
Nothing starts until you approve a written, fixed fee. See pricing for the full schedule.
Questions from cleaning business owners
Do I charge PST on cleaning?+
Can my cleaners be independent contractors?+
What is a WorkSafeBC clearance letter?+
Can I deduct my van?+
Do you work with cleaning companies outside the Fraser Valley?+
Written and reviewed by a Chartered Professional Accountant at EverStone CPA, an Abbotsford CPA firm working remotely with businesses across British Columbia. Updated . It is worth taking a minute to see what clients say first.
Related reading
Useful next pages for cleaning owners.
Start with an email
Say how many cleaners you have, whether they are on payroll, and the kind of contracts you hold. You hear back from the CPA within one business day with a written fee.