Contractor Bookkeeping in Edmonton: Job Costing, Holdbacks, WCB

The short version

Tag every sale, material bill and sub invoice to a job so you know which projects make money.
Record holdbacks as money owed to you, not as lost revenue.
Get WCB clearance letters from your subs and keep yours current.
Collect each sub's business number or SIN up front so your T5018 slips are easy.
Set aside 5% GST from every deposit you receive.

Good contractor bookkeeping in Edmonton answers one question: which jobs are actually paying you? Most contractors know their trade inside out and their numbers only roughly. You can be booked solid from Windermere to Clareview and still wonder why the bank balance never seems to match how hard you worked.

This guide walks through the pieces that make construction books different from a typical small business: job costing, holdbacks, WCB, T5018 slips and GST. It's written for renovators, framers, electricians, plumbers, finishers and small general contractors working in Edmonton, Sherwood Park, St. Albert and Leduc.

1Job costing: the heart of contractor bookkeeping in Edmonton

A regular profit and loss report tells you how the whole business did. That's useful, but it hides the job that lost $4,000 behind the two that made money. Job costing splits your numbers by project so you can see the difference.

Say you're a renovator who quoted a basement development in Terwillegar at $48,000. Job costing would show you every cost tied to that basement: lumber, drywall, the electrician you subbed out, the dump fees and your crew's hours. When it's done, you know whether your quote was right, and you can price the next one better.

What to tag to each job

Revenue: deposits, progress billings, change orders and the final invoice.
Materials: every supplier bill, split by job when one trip covers two sites.
Subcontractors: each sub invoice, matched to the job it was for.
Labour: crew hours times their real cost, including CPP, EI and WCB, not just the hourly wage.
Equipment rentals and disposal: bin rentals, lifts, dump fees.

Both QuickBooks Online and Xero can do this. QuickBooks has projects built in, and Xero uses tracking categories. The software matters less than the habit: if a supplier bill comes in without a job attached, it ends up in a general bucket and your job reports go fuzzy.

A busy year and a profitable year are not the same thing. Job costing shows you which one you had.

2Holdbacks: money you've earned but can't touch yet

On most lien-covered construction work in Alberta, the payer keeps back 10% of each payment until the lien period has passed. That money is yours. It's just delayed.

The common mistake is to record only what lands in the bank. If you invoice $20,000 and receive $18,000, it looks like you earned $18,000. You didn't. You earned $20,000 and you're owed $2,000.

Step	What happens	How to record it
Invoice	You bill $20,000 for a progress draw	$20,000 revenue
Payment	Client pays $18,000	$18,000 to bank, $2,000 to holdback receivable
Release	Lien period ends, holdback paid	$2,000 to bank, holdback receivable cleared

A separate holdback account also gives you a list to chase. It's surprisingly easy to forget a $3,500 holdback from a job you finished in spring. Review that account every month and follow up on anything past its release date.

GST on holdbacksGST on the held-back amount has its own timing rules, and Alberta's prompt payment and lien rules set specific timelines. Ask your accountant how they apply to your contracts so you don't remit GST too early or too late.

3WCB and T5018: the two forms subs ask about

WCB-Alberta

If you have workers in construction, you almost certainly need a WCB-Alberta account. Your premium is based on your industry rate and your workers' insurable earnings. As a business owner, your own personal coverage may be optional, but many general contractors won't let you on site without it.

The bookkeeping side: record WCB premiums as their own expense line, keep your annual return of earnings consistent with your payroll records, and download a clearance letter for every sub before you pay them. If a sub doesn't pay their premiums, the principal they worked for can be on the hook. We cover this in more detail in our guide to WCB for Alberta small businesses.

T5018 slips

If construction is your main line of work and you pay a subcontractor $500 or more in a year for construction services, you'll generally need to file a T5018 slip for them. The easiest way to make this painless is to collect each sub's legal name, address and business number or SIN on their first invoice, not in a panic the following spring. Our T5018 guide walks through it step by step.

4GST for contractors

Most construction and renovation work is taxable at 5% GST, and Alberta has no PST. Once your sales pass $30,000 over four consecutive calendar quarters, or in a single quarter, you must register. For many contractors that happens on the first decent-sized job.

Charge GST on deposits. When a client pays a deposit that's applied to the job, GST generally applies to it.
Claim it back. GST on lumber, tools, fuel, truck payments and sub invoices can usually be claimed as input tax credits.
Check your subs' GST numbers. You need a valid number on their invoice to claim the GST they charged you.
Hold it aside. Move 5% of each deposit into a separate account so filing time isn't a scramble.

5A monthly routine that takes an hour

You don't need to do bookkeeping every night after work. You need a steady routine. Here's what a solid month looks like for a small Edmonton contractor:

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If you're self-employed, plan for income tax and both halves of CPP too. Busy contractors often end up owing enough to need quarterly tax instalments, so it pays to set money aside as jobs close.

Mistakes that cost contractors money

Mixing personal and business spending on one card, so nobody can tell which Home Depot run was for a job.
Forgetting change orders. Extra work that never gets invoiced is a straight loss.
Paying subs in cash without an invoice, which leaves you with no record for T5018 slips or GST credits.
Treating deposits as profit before the materials for that job are even bought.

6If you're already behind

Plenty of contractors run a full season with receipts in the truck and invoices in their inbox. That's fixable. Catch-up bookkeeping starts with bank and card statements, rebuilds the year, and then tags as much as possible to jobs. You won't get perfect job costing for last year, but you'll get accurate books and a clean start.

Plum works with trades and renovators across Edmonton, Sherwood Park, St. Albert, Spruce Grove and Leduc on flat monthly fees. If you'd like to see what your jobs are really earning, book a quick call and we'll walk through where you stand.

7Questions people ask

What is job costing for contractors?

Job costing means tagging every sale, material purchase, subcontractor bill and labour hour to the job it belongs to. It shows you the real profit on each project instead of one blended number for the whole year.

How do I record a holdback in my books?

Record the full invoice as revenue and put the held-back portion into a separate holdback receivable account. When the holdback is released and paid, you clear that receivable instead of booking new income.

Do contractors in Alberta need WCB?

Most construction and renovation businesses with workers must carry WCB-Alberta coverage, and general contractors often ask for a clearance letter before they pay you. Confirm your industry's rules directly with WCB-Alberta.

Do I have to file T5018 slips?

If construction is your main business activity and you pay subcontractors $500 or more for construction services in a year, you generally need to file a T5018 slip for each one. The return is due six months after the end of your reporting period.

Should a small contractor use QuickBooks or Xero?

Both work well. QuickBooks Online has strong built-in project tracking, and Xero handles jobs through tracking categories or add-ons. The best one is the one your team will actually use every week.

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This article is general information for Alberta businesses and isn't tax or legal advice. Rules and thresholds change, so confirm your situation with your accountant or CRA.

Contractor bookkeeping in Edmonton, job by job.