A new electrician asked us this last month: “Do I put PST on my invoices or not?”
Fair question, and half the answers you’ll find online are written for Ontario, where there’s no PST at all. The other half are for retailers. Neither is you.
So here’s how it works for a trades business in BC.
What’s the difference between GST and PST in BC?
Two taxes, two governments, two sets of rules.
GST is federal. CRA lists BC’s rates as 5% GST and 7% PST, because BC never joined the HST. Ontario charges 13% HST, Alberta charges GST only, and Nova Scotia dropped to 14% HST on April 1, 2025.
PST is provincial. BC says “generally, the rate of PST is 7% on the purchase or lease price of goods and services, with some exceptions.” It’s a retail sales tax, and that word “retail” is the whole story for contractors.
Do BC contractors charge PST on their work?
Generally, no.
BC’s own rule for contractors is that services related to real property are “not subject to PST. This means you do not charge your customers PST for these services.” And it adds that you “do not need to register for a PST number if you provide them.”
Who counts as a contractor? BC’s glossary says: “You are a contractor if you supply and affix, or install, goods that become part of real property.” Framers, electricians, plumbers, roofers, drywallers, excavators. If the thing you install stays with the building, that’s you.
So the invoice for wiring a house carries no PST. Not on the labour, and not on the wire.
Then who pays the PST on the materials?
You do, when you buy them.
BC says “you need to pay PST on taxable goods you acquire to fulfil a real property contract, unless a specific exemption applies.” It doesn’t matter how you bill: “You must pay PST regardless of whether your contract is a time and materials contract or a lump sum contract.”
In other words, the province treats you as the end user of that wire, that lumber, that furnace. You paid PST at the supply house. That PST is now part of what the job cost you, and it’s baked into the price you charge.
Does it apply to jobs outside BC? Yes, for anything bought here. BC says you pay PST on “any goods you purchase in B.C. to fulfil a contract, even if you will affix or install the goods onto real property that is situated outside B.C.”
Bought the goods outside BC and brought them in? Then you self-assess. With a PST number, “you must self-assess the PST due on your next PST return.” Without one, you file a Casual Remittance Return, FIN 405, “on or before the last day of the month following the month you sent, received or brought the goods into B.C.” BC’s own example: goods received in July, PST due by August 31.
What counts as real property?
This is where the “do I charge PST” question actually gets decided.
BC defines it plainly: “Real property is land and anything that is attached to the land so it becomes part of real property after installation.” Buildings, structures, and machinery attached by more than its own weight all count.
The test is attachment, and plugging something in doesn’t count. Attaching it for better use generally doesn’t either. But a more substantial attachment, where removing it “would cause significant damage to the real property if the good were removed,” does.
BC’s examples of goods that generally become real property: hardwired ceiling fans, wall-to-wall carpet attached to the floor, hot water heaters, kitchen countertops, windows and storm windows, hardwired smoke detectors, fire hydrants.
And goods that generally don’t: bookshelves and other furniture, curtains, refrigerators and freezers, washers and dryers, window air conditioners, plugged-in lamps.
See the pattern? The furnace is real property. The fridge you sold them on the side isn’t.
When does a contractor have to charge PST?
Three situations, and each one means you need a PST number.
You sell goods without installing them. BC says “if you acquire goods to sell to your customers without installing them,” you “must charge your customers PST on those sales.” A plumber who sells a customer a faucet to install themselves is a retailer for that sale.
You supply goods that don’t become part of real property. Then you “must register for a PST number and charge your customers PST on the goods,” and “on the cost of installation or services related to those goods.” BC’s example is an ornamental plant in a freestanding container: installed, but never part of the property.
You service affixed machinery in certain cases. Some services to affixed machinery aren’t exempt, and if equipment is removed and serviced off site, “you must charge your customers PST on those services.” BC’s example is a furnace motor taken to a repair shop.
For those sales, BC’s rule is that you must register for a PST number so you can collect and remit the PST.
What’s the exception where the customer pays the PST?
There’s one more route, and it’s the one that confuses people.
BC lets you skip paying PST on the goods if three things are true: the goods will become part of real property in BC, your customer is liable for the PST by agreement between you, and there’s qualifying evidence of that agreement.
For contracts entered into after February 22, 2022, qualifying evidence means a signed agreement that sets out the purchase price of the goods and “expressly states that the customer is liable for paying PST,” or a signed invoice listing the goods with the same statement, or a completed Declaration of Agreement to Pay PST, form FIN 488, signed by both of you. BC is explicit that any other document “does not qualify as evidence.”
Then the mechanics change. You buy the goods exempt by giving your supplier your PST number at or before the sale, or a completed Certificate of Exemption, FIN 491, if you don’t have one. You charge your customer PST on the purchase price of the goods or the price in your agreement, whichever is greater. And you “must be registered as a PST collector before you supply the goods.”
Honestly, most residential contractors never touch this. It shows up on commercial and institutional work where the customer wants the tax itemized. If a customer asks for it, get the paperwork right before the first delivery, not after.
And GST?
GST is simpler, and it’s the one that’s on your invoice.
Once you’re registered, 5% GST goes on the full contract, labour and materials, including the materials you already paid PST on. The GST you paid on those materials comes back to you as input tax credits on your return. The PST never does.
When do you have to register? CRA’s threshold is $30,000. You’re a small supplier while you don’t exceed $30,000 in taxable sales over four consecutive calendar quarters. Pass it in a single quarter and “you are no longer a small supplier and have to charge GST/HST on the supply that made you exceed $30,000.”
You can also register before you have to. CRA says “you may choose to register voluntarily if you make taxable sales, leases, or other supplies in Canada.” For a contractor buying tools, a truck and materials, that usually makes sense early.
How should this look in your books?
Three habits.
PST is a job cost. The PST on your materials isn’t a tax you’ll recover, so it doesn’t belong in a tax account. It belongs in the material cost of the job, where your job costing can see it. A $10,000 material bill with $700 of PST cost you $10,700, and your estimate for the next job should know that.
GST is tracked both ways. GST you collected on invoices and GST you paid on purchases live in their own accounts, and the difference is what you remit. Mixing PST in there is how a GST return goes wrong.
Watch the mixed inventory. If you ever buy goods exempt for resale with a PST number and then install some of them, you’ve got PST to self-assess. Keep the resale stock and the install stock separate, or your bookkeeper has to untangle it at year end.
And keep the receipts. Every supply-house invoice is your proof of the PST you paid and the GST you can claim back.
Want it set up right?
Trades and construction is our specialty at MBC Canada. We code materials and their PST to the job, keep GST collected and paid in their own lanes, and file your GST returns on time. Our bookkeeping starts at $800 a month, and here’s what decides your number.
Have a look at what we do for contractors, or book a free 30-minute call and bring your last supply-house invoice. We’ll show you where the PST should land.
