CPA for contractors in Alberta
An Alberta contractor files two corporate returns, pays one sales tax, and answers to a lien act that sets the payment clock on every job. EverStone is an accountant for incorporated contractors and an online accountant for Alberta business, handling the T2 and the AT1, T5018s, payroll and equipment at fixed fees, from Abbotsford.
Quick answer: A CPA for contractors in Alberta has to handle three things a general accountant often does not: the provincial AT1 return filed with Alberta Tax and Revenue Administration alongside the federal T2, the T5018 slips for every subcontractor paid for construction services, and the statutory lien holdback that keeps a share of each progress draw out of your hands until the job is signed off. Alberta charges no provincial sales tax, so the sales-tax side is 5% GST alone — until you take a job in BC or Saskatchewan. EverStone handles all of it at a fixed fee quoted before work begins.
Accountant for contractors in Alberta, wherever the work is: Calgary, Edmonton, Red Deer, Lethbridge, Grande Prairie, Fort McMurray, Medicine Hat, Airdrie and the towns between. The Edmonton and Calgary pages cover each city’s market; this page is what every Alberta contractor shares.
Two corporate returns from one year-end
Alberta is one of two provinces that administers its own corporate income tax. Your corporation files a federal T2 with the CRA and a separate AT1 with Alberta Tax and Revenue Administration, each with its own deadline, its own instalment rules and its own set of schedules. They are prepared from one year-end file, and they have to agree: the taxable income on the AT1 is the federal figure with Alberta’s adjustments, so a change on one return moves the other. A contractor whose T2 and AT1 were prepared by different hands, or in different months, tends to find out in the form of a provincial reassessment. Corporate tax for Calgary corporations covers the mechanics of the pair.
T5018s and the question underneath them
A construction business that pays subcontractors for construction services generally files T5018 information returns for those payments. That is the easy half. The hard half is whether a given worker is a subcontractor at all: the test is the substance of the arrangement — who controls the work, who supplies the tools, who carries the chance of profit and the risk of loss, whether the worker can substitute someone else — not the heading on the invoice. Getting it wrong brings CPP and EI exposure with interest, and it tends to be found by comparison: one crew treated as employees while a similar crew is treated as subs is exactly the contrast a reviewer looks for. Subcontractor versus employee works through the tests; the T5018 form page covers the slip itself.
The lien act sets the payment clock
Alberta’s prompt-payment and construction lien legislation puts a timetable on invoicing and payment down the contracting chain, and it requires a statutory holdback to be retained from each progress draw until the lien period runs. For the books that means the holdback is money billed, earned and not yet usable, and that a job straddling the year-end has to be reviewed for work in progress and holdbacks both ways, or the return puts profit in the wrong year. GST does not always follow the invoice date either.
No PST, and the sales-tax risk that replaces it
Alberta contractors charge 5% GST and nothing else on Alberta jobs. That simplicity ends at the border. A job in BC brings 7% PST on materials installed into real property, generally as the contractor’s own cost; a job in Saskatchewan brings PST at a different rate on a different base and can require a separate provincial registration; a job in Ontario brings HST at 13%. Place-of-supply rules decide which applies, and they turn on where the work is performed rather than where the corporation is registered. An Alberta contractor bidding across a border should sort the tax treatment out before pricing the job, not after the first invoice. Place of supply sets out the rules; Alberta tax facts tables the rates.
Payroll once you carry crew
The step from working alone or with subs to carrying employees is the biggest single change in a trades file, and it usually arrives because a contract required it. From the first pay run there are source deductions on a remittance schedule set by your average monthly withholding, year-end slips, and WCB Alberta coverage with clearance letters to collect before releasing a subcontractor’s final payment. Penalties attach to the deduction rather than the tax, which makes a missed remittance date expensive out of proportion to the amount. Payroll, handled covers the engagement; the remittance calendar keeps the dates.
Equipment, CCA and the timing of a purchase
Trucks, trailers, tooling and shop equipment are capital assets recovered through capital cost allowance, and for a contractor the schedule is often the largest single deduction on the return. The half-year rule generally halves the first claim on an asset in the year it becomes available for use; the accelerated investment incentive can suspend that for eligible property and allow a substantially larger first-year deduction. Timing a large purchase around the year-end is real planning, but only where the year’s income can actually absorb the deduction, which is a question the work-in-progress review answers. CCA classes tables the classes a contractor meets most often.
The same review is where instalments get planned. Construction income concentrates into part of the year, and both the CRA and Alberta expect corporate instalments through all of it; a schedule built on a flat projection of last year’s tax lands the largest payments in the months with the least cash. The instalment calculator shows whether they apply to you at all.
What EverStone handles for an Alberta contractor
One CPA, one fixed fee agreed up front:
- Federal T2 and Alberta AT1 from one year-end file, prepared to agree
- Year-end statements a bonding company or lender will accept
- T5018 returns, with the subcontractor positions behind them documented
- Payroll remittances, year-end slips and WCB clearance tracking
- Work-in-progress, holdback and progress-draw review at year-end
- Equipment and vehicle CCA schedules
- GST filed and reconciled; place of supply settled before an out-of-province bid
The fee for all of it is fixed and agreed before any work starts; the published fee page shows the starting points, and a sample quote shows what one looks like in writing.
Prepared and reviewed by a Chartered Professional Accountant at EverStone CPA, an Abbotsford CPA firm working with small businesses and incorporated contractors across the Fraser Valley and Canada. About the firm · Book a free consult
What an incorporated Alberta contractor has to get right
| Item | Why it matters |
|---|---|
| Two corporate returns | The federal T2 and the Alberta AT1 are separate filings with separate deadlines, prepared from one file and required to agree |
| T5018 slips | Payments to subcontractors for construction services are reported; the classification behind each slip has to hold up |
| Statutory holdback | Billed and earned but not yet yours; it moves revenue across the year-end if the cut-off is not reviewed |
| Personal services business risk | A corporation with one client that looks like employment is taxed far more harshly |
| Sales tax where you operate | 5% GST only in Alberta. PST in BC and Saskatchewan and HST in Ontario apply the moment the work crosses the line |
Source: Accounting for contractors. General information, not advice.
Alberta contractor accounting FAQ
Why does my Alberta corporation file two returns?+
Do Alberta contractors have to file T5018s?+
How is the statutory holdback treated in my books?+
I am bidding a job in BC. What changes?+
Does Alberta charge sales tax on my construction work?+
Do you work with contractors outside Calgary and Edmonton?+
Related services and local guides
Alberta’s cities, the rest of what we do for Alberta contractors, and the reference pages behind this one.
Who this is for, and who it is not
This fits an incorporated contractor or trades company anywhere in Alberta that wants both corporate returns, the T5018s, payroll and the year-end review handled by one CPA at one fixed fee. It is not the right fit for a sole proprietor filing on a T1, or for a company that wants a bookkeeper on site. Fees are fixed and agreed in writing before the work starts; the published fee page shows the starting points.
Contracting in Alberta?
Two returns, the T5018s and the holdback review, from one CPA who answers the phone. Book a free consult.
Remote contractor accounting from Abbotsford
EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford, BC, working with Alberta contractors entirely online. There is no Alberta office and no staff in the province. Meetings are held by video or phone, documents move by secure exchange and e-signature, and no visit is required at any point. Job records, progress claims, supplier invoices and holdback schedules already live in software, which is why the arrangement suits construction.
Where the aim is moving up a class of work, fractional CFO support for Edmonton contractors and for Calgary companies covers bid discipline and the progress-billing cash curve.
For bookkeeping in Calgary and payroll in Edmonton, the scope and the fixed-fee approach are the same.
Talk to a CPA about this
One Chartered Professional Accountant, start to finish. Fixed fees, quoted in writing before any work begins, and no obligation from a first conversation.
“I have worked with Sunny for the past 2 years. He is very knowledgeable and has saved me tons in taxes by restructuring my group of companies — the best accountant I've worked with in the last 10 years, after switching from three different firms.”
