GST, HST, PST on Quotes Explained: Why Tax on a Contractor Quote Differs by Province

General information only

This guide is general information only. It explains how the tax line on a quote is commonly computed, so you can read a quote, check its arithmetic, and ask better questions. It is not tax advice, not financial advice, and not a ruling for your situation. Tax treatment depends on the specific goods and services, where they are supplied, the status of the supplier and the buyer, and the rules in effect on the date of the supply. Verify your specific situation with the Canada Revenue Agency, the relevant provincial finance ministry or tax authority, Revenu Quebec for Quebec sales tax matters, or a qualified tax professional in your province.

With that clear, the system is learnable. Most confusion on contractor quotes comes from three facts. Canada has several different sales tax structures depending on province. The place where a supply is made helps decide which structure applies. And tax may apply differently to goods, to services, and to a combined supply of both.

Why the same job is taxed differently across Canada

Place of supply decides the rate structure

For sales tax on a quote, the key question is not simply where the contractor office is, or where you found them online. It is the place of supply, the location the tax rules treat as where the goods or services are supplied.

For renovation work on a home, the work is tied to that property. A bathroom renovation in Ontario is supplied in Ontario. The same type of renovation on a property in British Columbia is supplied in British Columbia. That is why two quotes for a similar dollar amount, for similar work, can carry very different tax lines. They are not errors by default. They are different provincial systems applying to different places of supply.

Place of supply rules have detail, especially for goods shipped across provincial lines, services performed in more than one province, and real property in one province with design work done in another. This guide uses the common home renovation case, work performed on a property in the province where the property sits, to explain the main structures. If your situation crosses provinces, verify it, because the detail can change the result.

One tax, two taxes, or a harmonized tax

Depending on the province, you will generally see one of these patterns on a quote:

• GST alone, at 5 percent, in provinces with no separate provincial sales tax on that supply and no harmonization for it
• HST, a single harmonized tax that combines the federal and provincial parts into one rate shown as one line
• GST plus a separate provincial sales tax, shown as two lines, sometimes calculated on different bases
• GST plus QST in Quebec, a pattern that looks like two taxes but is administered in Quebec by Revenu Quebec for the QST part

The label on the quote matters less than checking three things: what rate or rates were used, what amount each rate was applied to, and whether the arithmetic is correct. The sections below give you the standard published rates for the main structures, so you can do that check.

The rate structures, province pattern by province pattern

GST at 5 percent alone

The Goods and Services Tax, GST, is a federal value added tax. Its standard rate is 5 percent.

In provinces and territories without a harmonized tax and without a separate provincial sales tax applying to that type of supply, a quote may show GST at 5 percent only. Alberta is the best known provincial example, and the territories follow a GST only pattern for many supplies. Even there, confirm what you are looking at. Other charges, levies, or fees are not sales tax just because they appear near the tax line, and some supplies can be taxed differently or be exempt or zero rated depending on their nature.

When you check a GST only line, the arithmetic is simple: pre tax amount multiplied by 0.05 equals GST, and pre tax amount plus GST equals the total.

HST: one combined rate

The Harmonized Sales Tax, HST, combines the GST and a provincial part into a single rate administered by the Canada Revenue Agency. A quote in an HST province typically shows one tax line at the HST rate, applied to the taxable amount.

In Ontario, the HST rate is 13 percent. That 13 percent is made up of a 5 percent federal part and an 8 percent provincial part, but on a consumer quote you normally see it as one 13 percent line, not two separate lines.

In Atlantic Canada, HST rates have long stood higher than Ontario. The long standing Atlantic rate referenced in many federal and provincial publications is 15 percent. That rate structure has applied in Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island as HST provinces, with provincial components larger than Ontario. Rates are set through federal and provincial decisions, and published by the Canada Revenue Agency and the Department of Finance Canada, along with provincial finance ministries. Rates can be changed by governments with advance notice, so always confirm the rate in effect on the date and for the place of your supply, rather than relying on a guide printed earlier.

The key checking point for HST is that there should normally be one combined tax line for a taxable supply subject to HST, not GST plus a second separate provincial sales tax on top of the same amount for the same supply. If you see both HST and a separate provincial tax on the same base, ask what each line is for.

GST plus PST: two taxes, two administrations

Some provinces keep a separate provincial sales tax alongside GST. In those provinces a quote can show two tax lines, calculated and remitted through different systems.

British Columbia: GST 5 percent plus PST 7 percent. PST in British Columbia is a provincial sales tax administered by the province. For many consumer supplies the combined effect on a quote is 12 percent of the pre tax amount if both taxes apply to the full amount, but do not assume both always apply to the same base or to every line. Some goods and services are treated differently under PST than under GST.

Saskatchewan: GST 5 percent plus PST 6 percent. The combined rate, if both apply to the full taxable amount, is 11 percent. Saskatchewan PST has its own rules about which goods and services are taxable, including rules relevant to construction and renovation work, so check the base for each line.

Manitoba: GST 5 percent plus retail sales tax 7 percent. Manitoba calls its provincial tax a retail sales tax, RST, often described as PST in general conversation. The combined rate, if both apply to the full amount, is 12 percent. As with the other PST provinces, the provincial tax base is not automatically identical to the GST base.

In all three provinces, the two lines exist because the taxes are not harmonized. A contractor or supplier may be registered for both, collect both where they apply, and remit them separately. A quote that shows only GST in a GST plus PST province is not automatically wrong. It may mean the particular supply is not subject to the provincial tax, or that the provincial tax was handled differently, for example on materials the contractor supplied in a way the provincial rules treat specially. That is a question to ask, with the quote in hand, not an assumption to make from the total alone.

GST plus QST in Quebec

Quebec has GST at 5 percent plus Quebec sales tax, QST, at 9.975 percent.

QST is administered by Revenu Quebec. GST in Quebec is administered by the Canada Revenue Agency, with Revenu Quebec also playing a role in GST administration in Quebec under long standing arrangements, which is why Quebec paperwork can look different from other provinces.

For most consumer supplies where both apply to the same pre tax amount, QST is calculated on the pre tax amount, not on an amount that already includes GST. So on a 100 dollar taxable amount, GST is 5 dollars, QST is 9.975 dollars, and the total tax is 14.975 dollars, for a total of 114.975 dollars, usually rounded to 114.98 dollars depending on rounding at the line or invoice level. That detail, QST on the pre GST amount, is a frequent source of confusion for people who expect the second tax to be charged on top of the first.

The combined rate in Quebec, where both apply in full, is therefore 14.975 percent. It is close to, but not the same as, a 15 percent HST rate, and the administration and rules are different. Do not treat them as interchangeable on paperwork.

What the tax applies to can differ

Goods versus services

A renovation quote is rarely one pure thing. It can include goods, such as tile, fixtures, lumber, and paint, services, such as labour to install them, and sometimes real property services tied directly to the home, plus delivery, disposal, and other charges.

Under GST and HST, the tax base and treatment follow federal rules for the supply or supplies being made, and a combined contract for materials plus labour to improve real property is often treated as a single supply of construction or renovation services for GST and HST purposes, with tax on the total contract amount subject to the usual rules and exceptions. Under a separate provincial sales tax, the treatment can split. A PST or RST system may tax goods consumed or used in the job differently from labour, may tax the contractor as the consumer of some materials, or may require tax on a different amount than the full contract price.

That split is why the instruction to "just add 12 percent" fails in PST provinces. Sometimes the provincial tax applies to the full amount you see. Sometimes it applies to only part, or it was already embedded in how materials were priced because the contractor paid it on their purchase. Two quotes can be following provincial rules and still present the tax line very differently.

What to do in practice: ask the contractor to show, on the quote, what amount each tax was calculated on. A clear quote states the pre tax amount, the tax name, the rate, the base it was applied to if it is not the full amount, and the tax amount. If the base is not clear, that is your first question, before you compare totals across contractors, especially across provinces.

Exempt, zero rated, and out of scope items

Not everything is taxable in the same way. Some supplies are exempt, meaning no GST or HST is charged and related input tax treatment differs for the supplier. Some are zero rated, meaning the rate is 0 percent for GST or HST purposes. Some charges are not a supply for sales tax purposes at all, or are reimbursements handled under specific rules.

A typical home renovation for a homeowner is generally a taxable supply for GST or HST, but this guide will not classify your specific items. Permits paid to a municipality, for example, and certain other charges can have their own treatment. If a line on your quote shows no tax and you expected tax, or shows tax and you expected none, ask for the reason in writing and verify it with the tax authority guidance for that item.

Discounts, holdbacks, and deposits

Timing and adjustments also affect tax appearance. A discount agreed before the invoice is issued usually reduces the amount tax is calculated on, if it is a true price reduction for that supply. A prompt payment discount or a later adjustment can be handled differently. Holdbacks under construction lien rules in some provinces affect when amounts are payable, not necessarily the tax rate. Deposits can trigger tax timing rules for GST and HST based on when the deposit is applied as payment, not merely when money is held.

None of these details change the provincial rate structure, but they change the base or timing, which changes the dollars. Keep discounts, deposits, and holdbacks as visible lines on the quote rather than folding them into a single total, so the tax arithmetic stays traceable.

Worked example

Use the same pre tax quote amount in three provinces to isolate the effect of the tax structure. The pre tax amount is 10,000 dollars. This example assumes, for teaching arithmetic only, that the full 10,000 dollars is the taxable base for each tax shown. Your real quote may have a different base for a provincial tax, as explained above, and you must check that base on the actual document.

Step 1: Ontario, HST at 13 percent

Pre tax amount: $10,000.00 HST rate: 13 percent, or 0.13 HST amount: $10,000.00 multiplied by 0.13 = $1,300.00 Total: $10,000.00 plus $1,300.00 = $11,300.00

Total in Ontario for this simplified example: $11,300.00

There is one tax line, HST, because Ontario is an HST province.

Step 2: British Columbia, GST 5 percent plus PST 7 percent

Pre tax amount: $10,000.00

GST: $10,000.00 multiplied by 0.05 = $500.00 PST: $10,000.00 multiplied by 0.07 = $700.00, on the assumption in this example that PST applies to the full amount Total tax: $500.00 plus $700.00 = $1,200.00 Total: $10,000.00 plus $1,200.00 = $11,200.00

Total in British Columbia for this simplified example: $11,200.00

There are two tax lines, from two different tax systems, even though the combined percentage in this full base example is 12 percent.

Step 3: Quebec, GST 5 percent plus QST 9.975 percent

Pre tax amount: $10,000.00

GST: $10,000.00 multiplied by 0.05 = $500.00 QST: $10,000.00 multiplied by 0.09975 = $997.50 Note that QST in this calculation is on the pre tax amount, not on $10,500.00. Total tax: $500.00 plus $997.50 = $1,497.50 Total: $10,000.00 plus $1,497.50 = $11,497.50

Total in Quebec for this simplified example: $11,497.50

Step 4: Compare the three totals

Ontario: $11,300.00, tax $1,300.00 British Columbia: $11,200.00, tax $1,200.00, on the full base assumption Quebec: $11,497.50, tax $1,497.50

Same work, same pre tax amount, three different totals. The difference is the provincial tax system for the place of supply, not a contractor error. That is the central lesson to carry to any quote comparison, especially if you own property, or are comparing information from family or online sources, in more than one province.

If you run this check on a real quote and the arithmetic does not match the rate multiplied by the stated base, pause. It may be rounding, a different base for the provincial part, a taxable and non taxable mix, or an actual error. Ask which it is, and get the corrected or explained quote in writing.

How to read a contractor quote tax section

Go line by line. First find the pre tax subtotal and check that the lines above it add up. Next find each tax line and note its name, rate, amount, and the base if it is shown. Multiply the rate by the base yourself, or with a percent calculator, and compare. Then add subtotal and tax lines for the total, and check that against the quoted total.

Also check the business tax numbers if they are shown, the date of the quote, and the address of the property the work is for, because place of supply follows that property. A quote prepared with the wrong property province, for example using a contractor home province instead of the property province, can carry the wrong structure entirely.

Keep quotes from different provinces, or different years, separate. Rates and rules change, and a total from an Atlantic HST province at 15 percent cannot be used to judge whether an Ontario 13 percent quote is reasonable, even for identical work. Compare pre tax amounts for the work itself, then compare tax treatment within the correct province.

FAQ

Why is HST in Ontario 13 percent but higher in Atlantic Canada?

Ontario HST combines a 5 percent federal part with an 8 percent provincial part for a total of 13 percent. Atlantic HST provinces have historically used a larger provincial part, for a long standing total rate of 15 percent referenced in Canada Revenue Agency and Department of Finance Canada publications. The federal part is the same idea, the provincial part differs, which is why the combined rate differs.

If a contractor from another province does work on my home, which province tax applies?

For renovation work on real property, place of supply is closely tied to where the property is located, so the property province structure usually drives the result. Cross province situations can have extra detail for goods shipped separately or services performed partly elsewhere. Confirm the treatment for your specific arrangement with the Canada Revenue Agency or the relevant provincial authority before relying on a quote total.

In British Columbia, should I always expect 5 percent plus 7 percent on the full quote amount?

Not always on the full amount. GST and PST have different tax bases and different rules for what is taxable. In a simplified example where both apply in full, you see 5 percent GST and 7 percent PST on the same base. On a real renovation quote, the PST base may differ, or PST may have been paid by the contractor on materials in a way that changes how it appears. Ask what base each tax was applied to.

How is QST calculated in Quebec, and is it charged on top of GST?

QST at 9.975 percent is generally calculated on the pre tax amount, not on an amount that includes GST, for most consumer supplies. So you calculate GST as 5 percent of the pre tax amount and QST as 9.975 percent of the pre tax amount, then add both. QST is administered by Revenu Quebec.

What if my quote shows no tax at all?

Ask why, in writing. There may be a legitimate reason tied to the nature of the supply, the supplier status, or how a particular charge is treated, or tax may be included in the stated price rather than shown separately, or the quote may be incomplete. Do not assume no tax shown means no tax is ever payable. Verify the item with the guidance from the relevant tax authority.

Can I use a percent calculator to check a quote?

Yes, and it is a good habit. Enter the stated base and multiply by the stated rate for each tax line, then add the results to the subtotal. Use a percent calculator for each line separately, especially in GST plus PST and GST plus QST provinces, because combining the rates first and using the wrong base is where most checking errors happen.

Calculators and next steps

Use these tools to check the arithmetic on any quote you receive, line by line.

• Discount calculator: https://mississippimaple.ca/tools/discount.html
• Percent calculator: https://mississippimaple.ca/tools/percent.html
• Split calculator: https://mississippimaple.ca/tools/split.html

Next steps: find the pre tax subtotal on your quote, identify the property province and the tax structure that should apply there, note the rate and base for each tax line, recalculate each tax amount yourself, and ask the contractor to clarify in writing any line where the base or rate is not stated. For a specific situation, verify with the Canada Revenue Agency, Revenu Quebec for QST, or your provincial finance ministry.

Sources and figures

Rates in this guide are the standard published rates referenced by the Canada Revenue Agency, the Department of Finance Canada, and provincial finance ministries and tax authorities, including Revenu Quebec for QST administration in Quebec. GST is stated at 5 percent, Ontario HST at 13 percent, the long standing Atlantic HST rate at 15 percent, British Columbia PST at 7 percent, Saskatchewan PST at 6 percent, Manitoba retail sales tax at 7 percent, and QST at 9.975 percent. Governments can change rates and rules, and detailed place of supply, tax base, and exemption rules are in the official publications and legislation for each tax. This guide summarizes those structures in general terms for quote reading only. It is general information only, not tax advice, and you should confirm the rate and treatment in effect for your date, province, and specific supply with the official source.

Estimates only, verify before you buy materials. This guide plans quantities and costs; it does not replace local building codes, manufacturer instructions, or professional advice.