GST Filing for Contractors in Alberta: What You Need to Know
GST is something almost every growing contractor eventually has to deal with but filing a GST return is more than simply adding up the tax you’ve collected from customers.
You need to know what GST you collected, what GST you paid on eligible business expenses, which input tax credits (ITCs) you can claim, and how much you actually need to remit to the CRA.
For contractors, keeping the GST side of your bookkeeping organized throughout the year can make filing much easier and help prevent unpleasant surprises when a return is due.
Here’s what contractors in Alberta should know about GST filing.
Do contractors have to register for GST?
Not necessarily.
If your business is a “small supplier,” you generally don’t have to register for GST/HST. For most businesses, the small-supplier threshold is $30,000 of worldwide taxable supplies in either a single calendar quarter or over four consecutive calendar quarters. (Canada)
Once you exceed the applicable threshold, GST/HST registration can become mandatory.
You can also choose to register voluntarily before you’re required to.
If you’re unsure whether your business has reached the registration threshold, it’s worth reviewing your situation with a qualified tax professional or the CRA.
How much GST do Alberta contractors charge?
Alberta currently has a 5% GST rate and no provincial sales tax. (Canada)
However, contractors working across provincial borders need to be careful.
The GST/HST rate that applies to a taxable supply generally depends on the place-of-supply rules, so you shouldn’t automatically assume that every job performed for an out-of-province customer is subject to Alberta’s 5% rate. (Canada)
If you work in multiple provinces, make sure your bookkeeping system captures the information needed to determine the correct tax treatment.
What is a GST return?
A GST/HST return is how a registered business reports its GST/HST activity to the CRA for a particular reporting period.
In general, you report:
GST/HST you collected or were required to collect
Eligible input tax credits for GST/HST you paid or owe on business purchases and expenses
Other applicable adjustments, credits or amounts
The result is your net tax for the reporting period.
Depending on your situation, you may have an amount to remit to the CRA—or you may be entitled to a refund.
The CRA requires registered businesses to file a GST/HST return for each reporting period, even if there was no business activity or no net tax to report. (Canada)
GST collected isn’t the same as income
This is one of the most important concepts for contractors to understand.
If you invoice a customer $10,000 for a taxable service in Alberta, you would generally charge:
$10,000 service revenue
+$500 GST
=$10,500 invoice total
That $500 GST is not your revenue.
GST collected is an amount you collect on behalf of the government and generally need to account for when you file your GST return. The CRA specifically states that collected GST/HST is held in trust until it is remitted. (Canada)
That’s why spending the GST sitting in your bank account can create a cash-flow problem later.
A good bookkeeping habit:
Keep your GST payable balance visible throughout the year rather than waiting until filing time to find out what you owe.
What are input tax credits?
Input tax credits, commonly called ITCs, allow GST/HST registrants to recover GST/HST paid or payable on eligible purchases and expenses related to their commercial activities. (Canada)
For contractors, this can include GST paid on certain business expenses such as:
Materials and supplies
Equipment and equipment rentals
Fuel
Repairs and maintenance
Advertising
Accounting and professional services
Office expenses
Telephone and utilities
Commercial rent
Certain motor vehicle expenses
Whether an expense qualifies—and how much GST can be claimed—depends on the specific circumstances.
The CRA generally requires the purchase or expense to relate to your commercial activities, and you need sufficient documentation to support the claim. (Canada)
Not every expense gives you a full GST credit
This is where things can get more complicated.
If something is used partly for business and partly for personal purposes, you generally can’t simply claim 100% of the GST.
For example, if a vehicle is used for both business and personal driving, the GST/HST ITC generally needs to reflect the portion related to commercial activities. The CRA requires the method used to determine the business-use percentage to be fair and reasonable and applied consistently. (Canada)
Meals and entertainment also have special rules. For most businesses, only 50% of the GST/HST on eligible meals and entertainment expenses can generally be claimed as an ITC. (Canada)
This is one reason accurate bookkeeping matters.
You don’t want to simply claim every dollar of GST that appears on your credit card statement.
What records should contractors keep?
Your GST return is only as good as the records behind it.
The CRA says businesses need to keep records that support their GST/HST returns and ITC claims. This includes sales and purchase invoices and other records related to the business. (Canada)
For ITCs, your supporting invoices or receipts need to contain sufficient information to substantiate the claim. (Canada)
Generally, GST/HST records must be kept for six years from the end of the year to which they relate, although the CRA can require records to be kept longer in certain circumstances. (Canada)
For contractors, that means keeping organized records for things like:
Customer invoices
Supplier invoices
Material purchases
Equipment purchases
Fuel and vehicle expenses
Subcontractor invoices
Credit card purchases
Business receipts
GST/HST calculations
Filed GST returns
Don’t wait until the GST deadline to start looking for missing receipts.
Keeping your books current and properly categorized makes it much easier to identify eligible expenses and support your GST filing. It also helps prevent some of the common bookkeeping mistakes contractors make.
How often do contractors have to file GST?
Your GST reporting period determines how often you file.
Common reporting periods include:
Monthly
Quarterly
Annually
The CRA assigns reporting periods based on your circumstances, and eligible businesses may be able to elect a different reporting period. (Canada)
For monthly and quarterly filers, the return and payment are generally due one month after the end of the reporting period.
For most annual filers, the filing and final payment deadline is three months after the fiscal year-end.
There is an important exception for individuals with business income who file annually, have a December 31 fiscal year-end and meet the CRA’s conditions: the payment deadline is generally April 30, while the filing deadline is June 15. (Canada)
Your actual CRA account should always be checked for your specific reporting period and due dates.
What happens if you don’t owe anything?
You still need to file your GST return.
The CRA states that registered businesses must file a return for each reporting period even if they:
Had no business transactions or income
Have no net tax to remit
Are closing their GST/HST account and need to file a final return
A return with nothing to report is commonly referred to as a nil return. (Canada)
So don’t assume that having no GST owing means you can skip the filing.
What happens if you miss the GST deadline?
Late filing or late payment can result in penalties and interest.
The CRA can charge penalties and interest on returns or amounts that aren’t received by the applicable deadline. (Canada)
That’s why GST should be part of your regular bookkeeping process—not something you scramble to figure out four times a year.
A contractor’s GST checklist
Before filing your GST return, your bookkeeping should ideally include a review of:
Sales
☐ All customer invoices have been recorded
☐ GST charged has been recorded correctly
☐ Tax treatment has been reviewed for applicable sales
☐ Out-of-province transactions have been considered where relevant
Purchases and expenses
☐ Supplier invoices and receipts are recorded
☐ GST paid on eligible expenses has been captured
☐ Personal-use portions have been excluded where applicable
☐ Meals and entertainment have been reviewed for the applicable ITC limitation
☐ Large equipment and other significant purchases have been reviewed
Reconciliation
☐ Bank accounts are reconciled
☐ Credit cards are reconciled
☐ GST accounts are reconciled
☐ Missing documentation has been identified
☐ GST collected and ITCs claimed have been reviewed
Filing
☐ GST return is prepared
☐ Return is reviewed before submission
☐ Payment or refund amount is confirmed
☐ Filing and payment are completed by the applicable deadline
☐ Copy of the filed return and supporting records are retained
The biggest GST mistake contractors make
The biggest mistake isn’t necessarily filing late.
It’s waiting until filing time to understand what happened during the quarter.
If your bookkeeping isn’t current, you may not know:
How much GST you’ve collected
How much GST you’ve paid
Whether you’ve captured all your eligible ITCs
Whether there are missing receipts
Whether your GST liability looks unusually high
Whether your cash balance is giving you a misleading picture of what you actually have available
GST filing should be the result of good bookkeeping, not the time when you discover problems with your bookkeeping.
How Bricked Bookkeeping helps with GST
GST filing is easier when your books are kept current throughout the year.
At Bricked Bookkeeping, GST is incorporated into the monthly bookkeeping process rather than treated as a last-minute task.
That means keeping your accounts reconciled, recording sales and expenses accurately, reviewing GST accounts, and identifying issues before the return is due.
For clients who have GST preparation and filing included in their service, the goal is simple:
Accurate books. Organized records. GST filed on time. Fewer surprises.
You handle the jobs. I make sure you know the numbers.
Ready to get your books under control?
If you’re a contractor or trades business owner and you’re not sure whether your current bookkeeping is giving you an accurate picture of your GST, cash flow, and profitability, let’s take a look.
Book Your Free Contractor Business Review.
This article is for general educational purposes and is not tax advice. GST/HST rules can vary depending on your business structure, transactions, reporting period, and where supplies are made. For questions about your specific tax obligations, consult the CRA or a qualified tax professional.