Job costs
Materials, subtrades and labour all belong to a specific job. When they’re tagged that way in QuickBooks, you can see which jobs made money and which only kept you busy, which is the information you need for your next quote.
Bookkeeping for contractors and trades in Lethbridge
The work happens on site, and the paperwork piles up in the truck. I keep contractor and trades books straight, from job costs and holdbacks to T5018 slips and crew payroll, so you can see what each job actually made.
Where contractor books get tricky
Construction books aren’t harder than anyone else’s, but they have a few moving parts that general bookkeeping misses.
Holdbacks
Part of every progress payment may be held back until the job is done. If holdbacks get lumped in with ordinary receivables, they’re easy to forget. I track them by job, with the date they’re due to be released.
Subtrades and the T5018
If construction is your main business and you pay subtrades, those payments are reported to the CRA on T5018 slips. That only works if every subtrade payment is recorded consistently all year.
Crew payroll
Construction has its own Alberta vacation pay rule, crews change with the season, and WCB coverage matters for everyone on site. Payroll set up properly from day one saves a painful fix later.
Rules worth knowing
A few Alberta and CRA rules that land on contractors in particular. I keep your books ready for each of them.
- T5018
- if more than half your business income is from construction and you paid a Canadian-resident subcontractor more than $500 in the year (before GST), you report it on a T5018. It’s due six months after your reporting period ends.
- Lien holdbacks
- under Alberta’s Prompt Payment and Construction Lien Act, owners generally retain a 10% holdback for 60 days (90 days for some oil and gas and concrete work). The Act’s prompt payment rules apply to construction contracts made since August 29, 2022.
- Vacation pay
- employees in construction are owed 6% vacation pay from their first day, not after five years.
- WCB
- WCB Alberta says a principal can owe premiums for contractors and subcontractors who don’t have their own WCB account.
- Records
- the CRA generally expects business records to be kept for six years after the end of the tax year they relate to.
How I help contractors
- Catch-up & cleanup bookkeepingBusy season left the books behind? I’ll reconcile every account and get you current.
- Monthly bookkeepingJob-tagged transactions, reconciled accounts and a monthly report you can quote from.
- Payroll servicesCrew pay runs with the right deductions, vacation pay and remittances.
- T4, T4A & T5018 slipsT5018s for your subtrades and T4s for your crew, filed on time.
- Invoicing & accounts receivableProgress billing sent out, payments matched, holdbacks tracked by job.
- GST filingGST on large, lumpy jobs filed correctly every period.
Contracting around Lethbridge
Working in more than one town usually means more than one business licence. The City of Lethbridge charges $193 for a resident general licence and $774 for a non-resident one, and licences run January 1 to December 31. Taber requires a licence for resident and non-resident contractors and subcontractors alike, Coalhurst has its own contractor licence, and Claresholm offers a regional business licence.
Each of those is a business cost, and each has a renewal date. I record licence costs where they belong and note each renewal date, so it’s on record for your year-end package.
Questions contractors ask
Which subtrades go on my T5018?
Canadian-resident subcontractors you paid more than $500 in the year (before GST), if construction is your main line of business. Non-resident subcontractors go on a T4A-NR instead. Recording every subtrade payment consistently all year is what makes the slips quick. See T4, T4A & T5018 slips.
How should I record holdbacks?
Separately from your other receivables, by job, with the date they’re due to be released. That way they show up when they’re owed instead of getting lost among old invoices.
Do my construction employees get more vacation pay?
Yes. Alberta requires 6% vacation pay for employees in construction from the start of their employment, rather than 4% rising to 6% after five years.
Can you set up job costing in QuickBooks Online?
Yes. I can set up your QuickBooks Online file so income and costs are tagged by job, and then keep it that way as part of monthly bookkeeping.
Let’s get your books level.
Tell me where things stand, even if it’s messy, and I’ll tell you honestly what it’ll take to catch up and keep it that way. Every quote is confirmed after a free review of your books.
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