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Construction Blog

the FYI on PST

“Hey Russ, can you please explain how the PST is charged on your invoices?”

We found a great article on TroutLakeGroup.com that answers this question: PST and Real Property Contractors

  • A Real Property Contractor (RPC) does not charge PST to its customers on materials and services.
  • A RPC pays PST on the materials it purchases to fulfill its contracts with customers – unless a specific exemption applies.  The PST becomes part of the material expense.
  • When a RPC (who is GST registered) wants to get a full reimbursement from its customers on materials purchased, the RPC would charge GST on the materials and PST.

Here is an example:

ABC Contracting buys $1,000 of lumber from Home Depot to build new front steps for its client, Miss Brown.  ABC Contracting is charged GST and PST on the lumber.

The total Home Depot invoice is $1,120 ($1,000 plus $70 PST plus $50 GST).

ABC Contracting incurs $500 in labour to build the stairs.

ABC Contracting would bill Miss Brown as follows:

Material ($1,000 plus PST of $70)  $1,070.00

Labour                                                      $500.00

Subtotal                                                 $1,570.00

GST                                                           $ 78.50

Total                                                     $ 1,648.50

For more information please refer to the Small Business Guide to PST.

SOURCE: https://troutlakegroup.com/2014/01/21/pst-and-real-property-contractors/

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About the Author

Russ started in the construction industry at an early age and worked his way up steadily ever since. After 5 years of renovation experience, he spent 10 years with a luxury home builder in Victoria as site foreman. Always looking for a new challenge and opportunity for growth, starting Interactive Construction was the next logical step in his career. Running Interactive allows Russ to combine his extensive construction experience with his computer programming expertise. This combination has helped build a company that offers state of the art project management coupled with high-quality home construction.

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