HST for Contractors in Ontario: When to Charge, What to Track, and Common Mistakes

For contractors in Ontario, HST problems usually don't come from “bad intentions.” They come from messy invoicing, mixed personal/business spending, and not tracking HST consistently across jobs.

This post gives you a clean, practical way to handle HST as a contractor—so filing is easier and CRA risk stays low.

Step 1: Confirm if you should be charging HST

Before you charge HST, confirm:

• Are you registered for HST/GST?
• Are your services taxable (most contractor services are, but confirm your situation)?
• Are you past the small supplier threshold (if applicable)?

If you're unsure, don't guess—confirm inside CRA My Business Account or review your revenue timeline.

Step 2: When to charge HST on contractor invoices

In most cases, once you're registered, you should charge HST on taxable supplies when you invoice clients.

Contractor best practice:

• Put HST as a separate line item on every invoice
• Show your business number (if applicable)
• Keep invoice numbers sequential (clean audit trail)

Step 3: What to track weekly (so HST filing is easy)

If you do this weekly, HST filing becomes simple:

• Sales/invoices issued (total + HST collected)
• Payments received (match to invoices)
• Materials purchased (HST paid — possible ITCs)
• Subcontractor invoices (HST paid — possible ITCs)
• Fuel/vehicle costs (business-use portion)
• Tools/equipment (keep invoices, note job)

Keep receipts organized by month and label anything unclear.

Step 4: HST collected vs ITCs (simple contractor view)

Your HST return is basically:

If you don't track both sides cleanly, you either:

• overpay (miss ITCs), or
• underpay (CRA problems later)

Common HST mistakes contractors make in Ontario

• Charging HST inconsistently (some invoices yes, some no)
• Not separating personal and business spending
• Claiming ITCs without proper invoices/receipts
• Paying subcontractors without clear invoices (creates T4A + HST confusion)
• Not reconciling bank/credit cards (numbers don't tie)
• Waiting until the deadline week to “figure it out”

A simple contractor HST checklist (before you file)

Before filing your HST return, confirm:

• Bank and credit cards are reconciled for the period
• All invoices are recorded (and HST collected is correct)
• All major expenses have invoices/receipts
• Mixed-use expenses are handled consistently (vehicle/phone/home internet)
• You can explain any unusual transactions

FAQs