Independent Contractor Taxes in Canada (Trades)
Contractors buy tools and materials, drive a lot and quote before they invoice. Good records turn those costs into real deductions.
What independent contractors and trades can usually deduct
- Materials and supplies used on jobs
- Tools (small tools often deducted directly; larger equipment through CCA)
- Vehicle expenses: the business-use % of fuel, insurance, repairs, licence, plus interest or lease within CRA limits
- Work clothing and safety gear required for the job
- Subcontractors you pay (keep their invoices and business numbers)
- Phone and insurance
Only the business part of a cost is deductible, and you need a receipt or record for each. See CRA's guide T4002.
GST/HST
Construction services are taxable for GST/HST once registered. If you work in construction, check whether you must file a T5018 for subcontractor payments. Check with our GST/HST calculator.
Keep good records
Keep a mileage logbook — date, destination, purpose and km — for every business trip; driving from home to a regular workplace is personal. Keep records for six years.
What to set aside — quick estimate
Your province
- Self-employed tax in Ontario
- Self-employed tax in Quebec
- Self-employed tax in British Columbia
- Self-employed tax in Alberta
- Self-employed tax in Manitoba
- Self-employed tax in Saskatchewan
- Self-employed tax in Nova Scotia
- Self-employed tax in New Brunswick
- Self-employed tax in Newfoundland and Labrador
- Self-employed tax in Prince Edward Island
- Self-employed tax in Yukon
- Self-employed tax in Northwest Territories
- Self-employed tax in Nunavut
Questions
Can I claim my truck as a contractor?
The business-use percentage of its costs, based on a logbook of business km versus total km.
Do I need to report payments to subcontractors?
Businesses whose main activity is construction may need to file T5018 slips. Check the CRA guide for your situation.