Contractor Invoice Template Canada — Construction, Trades & Self-Employed

Invoicing in the construction and trades industry in Canada is more complex than invoicing as a typical freelancer. You need to account for materials separately from labour, manage statutory holdback requirements, issue progress billing draws at defined stages of a project, and comply with both CRA and provincial construction lien legislation.

This guide explains the unique requirements of a Canadian construction invoice, covers Ontario and BC specifics, and provides realistic progress billing examples for a residential renovation.

How a Construction Invoice Differs from a Regular Freelance Invoice

A standard freelance invoice lists services and charges HST on the total. A construction invoice must do considerably more:

• Separate materials from labour — materials and labour are often taxed differently, and your client's project manager needs to track costs by category
• Track cumulative billing — progress invoices show how much of the total contract has been billed to date
• Apply statutory holdback — in Ontario and several other provinces, the owner is legally required to withhold 10% of each progress payment until the lien period expires
• Reference change orders — any work outside the original scope must be separately authorised and referenced on the invoice
• Include lien-compliant language — some GCs require a statutory declaration or lien waiver before releasing payment

Statutory Holdback — Ontario and Other Provinces

Under Ontario's Construction Act, an owner is required to hold back 10% of each progress payment made to the prime contractor. The prime contractor, in turn, must hold back 10% from sub-contractors. This holdback is retained until the lien period has expired (45 days after substantial completion in Ontario) and no liens have been registered against the property.

What this means for your invoice: When you submit a progress invoice, the GC or owner will pay 90% of the certified amount and retain 10% as holdback. Your invoice should calculate and display this explicitly so both parties are aligned.

The $1,200 holdback is released via a separate holdback invoice after the lien period expires and the owner confirms no liens are registered.

Progress Billing — Draw #1, #2, #3

Large renovation and construction projects are almost always billed in progress draws rather than a single invoice at the end. A typical three-draw schedule might look like this for a $45,000 kitchen renovation:

Draw #1 — Project Start (30%)

Draw #2 — Midpoint (40%)

Billed when cabinetry is installed and plumbing/electrical rough-in is inspected and approved. Reference "Draw #2 of 3" on the invoice and note the cumulative amount billed: "Previously billed: $13,500 (Draw #1). Current draw: $18,000 (40%). Remaining contract balance: $13,500."

Draw #3 — Substantial Completion (30%)

Issued when the project reaches substantial completion — all work is done and the space is usable, even if minor deficiencies remain. After this invoice, the holdback release invoice can be issued once the lien period expires.

Change Orders

A change order is any work outside the original contract scope. Never do out-of-scope work without a written change order, and always reference the approved change order number on your invoice:

Change Order CO-2026-003 (Approved Feb 22, 2026):
Additional electrical outlet — master bedroom
Labour: 2.5 hrs @ $95/hr = $237.50
Materials: outlet box, wiring, cover plate = $42.00
CO-2026-003 Total: $279.50

HST on Construction Services

Construction services are taxable in Canada. The rate depends on the province of the project:

• Ontario: HST 13%
• BC: GST 5% only on most residential construction services (PST generally does not apply to labour, though it does apply to materials in some cases — verify with a tax professional)
• Alberta: GST 5% only
• Atlantic provinces: HST 15%

Note: New residential construction may qualify for a GST/HST New Housing Rebate for the buyer. This does not affect how you invoice — you still charge and remit HST — but it is worth mentioning to residential clients who may be eligible.

Ontario vs. BC — Key Differences

Related Templates and Guides

• Independent Contractor Invoice Example — general contractor billing for corporate clients
• Canadian Freelance Invoice Template — general-purpose freelance invoice
• Ontario Invoice Template — HST 13% for Ontario-based contractors
• BC Invoice Template — GST + PST for BC construction
• Deposit Invoice Template — how to request a project deposit
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