Contractor accountant in Hamilton

The 10% holdback and when revenue counts

Under Ontario’s Construction Act, the owner or the contractor above you holds back 10% of the value of work done until the holdback period has passed. For you, that money is earned and billed but not yet payable. The accounting question is timing and tracking. The work belongs to the year it was done, holdback included, but the cash arrives later and sometimes only when someone asks for it. Left inside ordinary receivables, holdbacks blur the aged listing and sit unclaimed long after they fall due. We keep holdback receivable as its own account, job by job, and flag each release date so the release invoice goes out on time. The Act’s prompt payment rules also give you a timetable to hold a payer to, which only helps if your invoices are dated and tracked properly. Construction holdbacks covers the accounting in more detail.

Progress billing and when HST becomes payable

Ontario charges 13% HST on construction services, and on a progress-billed job the question is not whether HST applies but when you owe it. On a progress bill, HST generally becomes payable on the earlier of the day you are paid and the day the invoice is issued or payment falls due under the contract. The holdback portion is different: the HST on it becomes payable when the holdback is paid or becomes payable, not when the underlying bill went out. Get that wrong and you either remit tax on money you will not see for months, or under-report and pick up interest later. We set up progress invoices so the HST on the draw and the HST on the holdback are split from the start.

T5018 slips and the subcontractor question

If most of your business income comes from construction and you pay subcontractors for construction services, you generally file T5018 information returns reporting those payments. They are due six months after the end of the reporting period, which you can set to your fiscal year or the calendar year. The harder question sits behind the slip: is the person you are paying really a subcontractor? A framer working only for you, on your schedule, with your tools, may look like an employee to the CRA, and reclassification brings CPP and EI with interest. The T5018 form guide and subcontractor versus employee cover both halves.

WSIB, clearances and who has to be covered

Ontario makes WSIB coverage compulsory for most construction work, and in construction that coverage reaches further than in most industries, including many independent operators and some owners. Premiums depend on your classification and are reported to WSIB separately from anything the CRA sees. The part that catches general contractors is subcontractors: if a sub has no coverage, the hiring contractor can be held responsible for their premiums. We keep each sub’s clearance with their invoice and check it before the final payment on a job, not after.

Equipment, winter and instalments

Hamilton’s building season slows when the ground freezes, and that shape runs through the whole file. Revenue bunches into spring to fall while trucks, equipment payments and insurance run all year. Instalments set on a flat line from last year’s tax can leave you overpaying through a quiet winter or short after a strong summer. Equipment adds its own timing: a skid steer, excavator or work truck is recovered through capital cost allowance, and it has to be available for use before the year end to be claimed. We set instalments against your real pattern and look at equipment purchases against the year’s projected income before you sign. Cash flow for a seasonal business covers the planning side.

The pickup is its own question. A company truck that also takes the kids to hockey creates a taxable benefit for the owner unless personal use is tracked and kept low, and the CRA asks for a log, not an estimate. A simple record of business trips kept through the year is the cheapest defence there is. The mileage and vehicle log shows what to record.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements
• Holdbacks tracked job by job and reviewed at the cut-off
• Progress invoices set up so HST on draws and holdbacks is split
• T5018 subcontractor information returns
• Subcontractor-versus-employee positions documented
• WSIB reporting support and clearance records
• Equipment CCA and instalments planned around the season

Fixed fees, fully online

EverStone is an Abbotsford CPA firm and Hamilton is three hours ahead, so our morning lands in your afternoon. Everything runs by video, phone and secure upload, which fits a business run from a truck. A typical trades-corporation bundle of bookkeeping, payroll and the year-end T2 with statements usually runs $450–$650 a month. The fee is fixed and agreed before work starts. See what it costs.

Remote contractor accounting from Abbotsford

Contractor accounting for Hamilton clients is delivered remotely from Abbotsford, British Columbia. There is no Hamilton office and no local team. Meetings are virtual, documents are signed electronically, and you deal with the CPA directly rather than an intake desk. Holdbacks, subcontractor payments and equipment costs are tracked as they happen rather than reconstructed at year end.