Contractor accountant in Kitchener-Waterloo

For a one-owner Kitchener-Waterloo contractor, monthly bookkeeping, payroll and the year-end T2 with statements usually cost from $500 to $700 a month all-in.

Holdback, and what it does to the books

Ontario’s Construction Act requires the payer to hold back 10% of the value of the work until release. If you receive the payment, that amount is earned but not yet collectible: track it in its own receivable, job by job. If you pay subtrades, what you hold back is a cost already incurred and a liability due on release.

Left untracked, holdback distorts the margin on the job that earned it and makes the bank balance look healthier than it is. The Act also treats money received on a project as held in trust for the subtrades and suppliers who worked on it, which is one more reason to know which dollars belong to which job. Holdbacks in the books works through the entries.

Progress billing, and when HST becomes payable

A progress invoice does not always make HST owing on the full amount that period. HST generally becomes payable when the consideration is paid or due, whichever is first; on the held-back portion, generally not until the holdback is paid or falls due.

Remitting HST on the full invoice, holdback included, pays the government early. Missing it when the holdback is released under-remits. We match the HST return to billings and releases. At Ontario’s 13% the arithmetic is simple; the timing is the hard part.

The Act’s prompt payment deadlines run from the day a proper invoice is given. An invoice missing what the contract requires can delay the clock, so invoice discipline is a cash-flow matter.

Subcontractors, T5018s and classification

A business mainly in construction reports subcontractor payments for construction services on T5018 slips, due six months after the reporting period ends (calendar or fiscal year). Each slip needs the subcontractor’s name, address and business number, easiest to collect at set-up. The harder question is whether each person is a subcontractor at all.

Control, ownership of tools, the ability to hire help and the chance of profit or loss decide it. If the CRA disagrees with the label, the payer owes the CPP and EI that should have been withheld (employee or contractor sets out the tests). The T5018 subcontractor tracker helps keep the list current.

WSIB reaches the owner in construction

Ontario extends compulsory WSIB coverage in construction to independent operators, sole proprietors, partners and executive officers. Exceptions are narrow (such as work only on a homeowner’s own residence, hired directly), so most contractors on commercial or new-build work need owner coverage. Get each sub’s clearance certificate before paying, or you can be liable for their unpaid premiums. Employee payroll is covered on payroll in Kitchener-Waterloo.

Equipment, vehicles and a winter season

Excavators, trailers, pickups and tools are written off through capital cost allowance, by class, and a purchase near year-end changes the first-year claim. Mixed-use vehicles need a log. Winter slows exterior work, so revenue bunches into the season while instalments follow the calendar; a strong year can bring a large balance owing and instalments due before next season’s receivables. We model that in the autumn. See corporate tax instalments and the mileage and vehicle log.

Institutional and industrial bids often need surety bonds, and bonding companies read year-end statements closely: working capital, work in progress, and consistent profit recognition on open jobs. A job schedule tied to the ledger, with holdback shown separately, answers most of their questions.

What EverStone handles for you

One firm, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements
• Holdback receivable and payable schedules, job by job
• HST filings matched to progress billing and holdback releases
• T5018 subcontractor information returns
• Subcontractor-versus-employee positions documented
• Equipment and vehicle CCA schedules
• Instalments planned around the building season

Fixed fees, fully online

Everything runs by video, phone and secure upload, which suits a business run from a truck. A typical trades-corporation bundle of bookkeeping, payroll and the year-end T2 with statements is usually $500–$700 a month. See what it costs.

Remote contractor accounting

Contractor accounting for Kitchener-Waterloo clients is remote. There is no Kitchener-Waterloo office and no local team. Meetings are virtual, documents e-signed, and you deal with the CPA directly. Subcontractor payments, holdbacks and equipment costs are tracked as they happen.