Experts In The Unique Challenges of Accounting For Construction & Trades Businesses

In the construction and trades industry, firms and contractors face unique challenges when it comes to accounting and taxes.

Tax Issues for Construction & Trades Businesses

Should I Incorporate My Business? Ask us.

Business Deductions for Construction & Trades Businesses

Tax deductible expenses include:

  • Construction Supplies
  • Tools and Equipment
  • Rental expenses
  • Travel expenses – Make travel deductible in a legal way.
  • Storage costs
  • Waste disposal costs
  • Marketing/branding, e.g. to develop your brand logo when selling your own brand
  • Insurance
  • Union dues
  • Subcontractors
  • Accounting
  • Payroll
HST Issues for Construction & Trades Businesses
  • Keep a separate bank account for HST and tax (transfer ~20% income to this account) – HST is not your income, you only collect for CRA
  • Ask for and keep a record of HST numbers for subcontractors.

Accounting Issues for Construction & Trades Businesses

  • Use a Cloud-based Accounting System, ask us about your options.
  • Set up a proper chart of accounts to fit your operations.
  • Keep concise records of purchases and income regardless if the transaction is electronic or by cash. – CRA can request audits of supplier records (i.e. – Home Depot, Lowes, Rona, etc.), keeping a complete record of expenses helps prevent issues that may arise from these audits.
  • Use mobile apps to track mileage for business.
  • Work-In-Progress needs to be reported as income in correct way – ask us
  • Issue invoices for all projects and work.
  • Be aware of fluctuations in your operations for seasonal businesses, ask us for tax planning.

Payroll Issues for Construction & Trades Businesses

Payroll Management for Construction & Trades Businesses
  • Make sure all employees are on your payroll system.
  • Understand payroll laws and regulations for different payroll scenarios (I.e. – holiday pay, vacation pay, overtime pay).
  • Our office provides a complete hassle-free payroll system, contact us for more details.
  • High turnover can complicate payroll, we can help simplify your payroll management.
  • Keep a concise record of subcontractors, including personal information for reporting purposes.
  • Report casual labour and subcontractors on T5018 tax slips.

 

Workers Compensation and EHT for Construction & Trades Businesses
  • If your gross payroll exceeds $450,000, you will be required to remit the Employee
  • Health Tax to the Ontario Government. Ask us if this situation applies to you.
  • You may be liable to pay Worker’s Compensation Insurance for all provinces that your business operates in. Ask us for more details.
  • Ensure you are classifying your business correctly when applying for a WSIB account.
  • Owners of construction businesses may be required to remit WSIB on their income. Ask us.
    Collect WSIB clearance certificates from subcontractors.

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Trusted Accountancy For Over Two Decades

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