Our free Subcontractor Invoice Template for Canada streamlines billing for independent contractors and subcontractors. This professional template includes essential Canadian tax fields, GST/HST calculations, and complies with CRA requirements. Perfect for construction, consulting, and service-based subcontractors operating in Canada. Features customizable layouts, automatic calculations, and professional formatting to ensure prompt payment and maintain client relationships while meeting Canadian invoicing standards.
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Frequently Asked Questions
You must register for GST/HST once your annual revenue exceeds $30,000, and you are required to charge it on your subcontractor invoices. Even below this threshold, registering is often advisable because you can then recover GST/HST paid on business expenses. The rate depends on your province: most charge 5% GST, while Ontario, Atlantic Canada, and Manitoba apply HST rates between 13–15%. Check the CRA website to confirm your province's obligations and register online through your Business Number.
Your invoice must include your legal business name, address, Business Number (if registered for GST/HST), contact details, invoice number, and date issued. Include the client's name and address, itemized work descriptions, quantities, rates, and subtotal. Add GST/HST separately if applicable, showing the rate and amount. Include payment terms, due date, and accepted payment methods. The CRA requires this information for audit purposes, and clients need it for their own business records and tax deductions.
In Canada, withholding tax (also called contractor tax) is not automatically applied to all subcontractor payments. However, if you are not a registered GST/HST vendor, the client may need to withhold 10–15% under certain circumstances, depending on provincial regulations and contract terms. If you are GST/HST registered and provide your Business Number, withholding generally does not apply. Clarify withholding obligations with your client before invoicing to avoid payment delays and disputes.
Your core invoice template remains the same, but the GST/HST rate and compliance rules vary by province. A national subcontractor invoice should allow flexibility to adjust tax rates: 5% GST in most provinces, 13% HST in Ontario, 14% in Nova Scotia, 15% in Newfoundland. Some provinces use PST plus GST instead of HST. Document which province each project operates in and apply the correct tax rate. This ensures CRA compliance and client satisfaction across different jurisdictions.
Standard practice in Canadian construction and contracting is Net 30 days, though Net 14 or Net 45 may apply depending on your agreement and industry. Always establish payment terms before work begins and state them clearly on every invoice. CRA recognizes 30 days as reasonable for business invoices. Late payment beyond agreed terms can affect your cash flow, so consider Net 14 for high-value projects or include a 1–2% early payment discount to encourage prompt payment.
Many subcontractors invoice upon milestone completion, which aligns with the work performed and client cash flow. Others invoice weekly or monthly for ongoing services. Your contract should specify the invoicing schedule before work starts. If work spans multiple weeks, monthly invoicing often provides better cash flow management than waiting for project completion. Include specific dates, quantities completed, and payment milestones on each invoice to avoid disputes and support both your records and the client's expense tracking.
Retain copies of signed contracts, purchase orders, time sheets, progress photos, work orders, and any change requests related to each invoice. The CRA requires documentation to substantiate income and GST/HST claims in case of an audit. Keep these records for at least six years. Digital invoices and supporting files should be organized by client and project date. Clear documentation also protects you if payment disputes arise and demonstrates professional operations to clients and banks.
Your pricing structure depends on the work type and contract agreement. Hourly rates work well for variable tasks like troubleshooting, while daily rates suit fixed-day commitments. Lump sum invoices suit specific deliverables like installation jobs. State the rate unit clearly on your invoice: "$125/hour," "$800/day," or "$2,850 for Phase 1 electrical installation." Include quantities and totals so clients easily verify charges. Consistency across invoices builds trust and simplifies accounting for both parties.