PST for contractors in BC: who charges what, and when

Updated August 8, 2026 · A plain-English guide from the team behind Footings

Provincial sales tax is the tax most often billed wrong in BC construction — usually by charging it when it shouldn't be charged, sometimes by forgetting it exists at all. The rule underneath is actually simple once someone says it plainly, so here it is.

The one rule that decides everything

BC treats a contractor doing supply-and-install work — attaching materials to land or a building so they become part of the real property — as the consumer of those materials. You pay 7% PST when you buy the flooring, the lumber, the membrane, the fasteners. Because you already paid it as the consumer, you generally do not charge PST to your customer on the contract price. Their invoice shows GST and no PST line.

That surprises people in both directions. Customers sometimes expect a PST line and think an invoice without one is a mistake. Contractors coming from retail sometimes charge 7% on the whole job — collecting tax the province didn't ask them to collect, and making their quote 7% more expensive than the shop next door's.

So where does the PST you paid go?

Into the job's cost — and this is the part that decides whether your quote makes money. Unlike GST, the PST you pay on materials is not refundable. It is a real cost that belongs in the price. If materials for a job run $10,000, they actually cost you $10,700, and the markup has to be applied to the $10,700.

Example — supply-and-install in BC.
Materials at the supplier: $10,000 + $500 GST + $700 PST = $11,200 out the door.
Your books: $10,700 of job cost (the PST sticks; the GST comes back as an input tax credit).
Your invoice to the customer for the finished work: contract price + 5% GST. No PST line.

When you DO charge PST in BC

The consumer rule applies to installed work. Two situations flip it:

Supply only. Selling goods without installing them — a pallet of tile the customer's own crew will lay — is retail. Charge PST on the goods like any store would.
Contract terms that pass title to materials before installation. Some contracts are written so the customer buys the materials and you install them. The paperwork decides; if you work under contracts like this, have them read by someone who knows the PST rules, because the treatment follows the wording.

Pure labour — service calls with no materials — has no PST in BC either way.

Saskatchewan is the trap for BC contractors

Take a job across a provincial border and the rule can invert. Saskatchewan taxes services to real property themselves: a contractor there charges 6% PST on the whole contract — labour and materials — for exactly the kind of installed work that carries no PST line in BC. A BC contractor quoting a Saskatchewan job with BC habits underbills the tax by 6%, and the province will still want it. Manitoba is different again. The safe habit: the tax follows where the work is, not where your office is.

What this means for your paperwork

Three habits keep it clean. Price the PST you pay on materials into the quote, because it is a cost, not a flow-through. Keep the treatment — supply-and-install, supply-only, or labour — recorded per job, so invoices come out right without anyone remembering rules at 6 p.m. And keep supplier receipts attached to the job, because the PST you paid is part of proving what the job really cost.

Footings does this automatically: every job carries its tax treatment and its province, invoices charge exactly what that combination calls for (including the Saskatchewan rule), the PST you pay on purchases rides into job cost while GST is claimed back, and the GST and PST worksheets total it all for filing time.

The honest caveat: this guide explains the general rules for common situations. Exemptions, special contract wordings and edge cases exist, and provinces update their rules. Have your accountant confirm the treatment for your contracts before you rely on it — that's true in any software, ours included.