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Ontario, Canada

HST on holdback calculator

You charge HST on the full value of the work, including the tenth being held. You do not remit all of it yet. Enter the job and get both numbers, and the date the rest falls due.

The invoice

Before tax. The progress billing, the draw, or the whole contract if you bill once.

Ten percent is the statutory rate every payer retains under s.22(1). Enter more if your contract holds more.

What is the holdback held under?

The ten percent every payer retains on an Ontario construction contract under s.22(1) of the Construction Act. This is retained under an Act, so the tax point moves.

When the deferred tax falls due

Fill in either one and the tool takes the earlier. Leave both blank and it will tell you what it is waiting for.

The first limb of s.168(7). If the money has landed, the tax point is that day and nothing else matters.

The owner publishes a notice of annual release of holdback on a construction trade news site within 14 days of the contract anniversary. Publication starts the payment window.

Filled in with an example so the page answers before you type anything. Change any field and the answer, and the link to it, become yours.

HST you charge on this invoice

$2,600.00

On the full value of the work, including the part being held back.

HST on this period's return

$2,340.00

$260.00 of it waits for the holdback.

The two dates in s.168(7), and which one is your tax point

The tax on the held share becomes payable on whichever of these two days comes first.

  • The day the holdback is paid out to you

    Not dated

    not dated yet, because the holdback has not been paid

    Excise Tax Act s.168(7)(a)

  • The day it is required to be paid out

    Not dated

    not dated yet, because no Form 6 notice date was entered

    Construction Act s.26(4); Excise Tax Act s.168(7)(b)

Neither limb has a date yet, so the $260.00 stays off your return until one of them does. That is the whole benefit of the section, and it is the number contractors most often remit early.

What belongs on the invoice

  • HST is charged on the full invoice amount. The holdback does not reduce the consideration. Only the tax point on the held-back share moves.
  • HST of 260.00 on the holdback of 2000.00 is not payable until the earlier of the day the holdback is paid out and the day it is required to be paid out (ETA 168(7)).
  • Each mandatory annual holdback release is its own tax point: the HST on the released share becomes payable on that release, not at final completion.

How that was worked out

  1. Value of the work on this invoice

    what you entered, before tax

    $20,000.00

  2. HST at 13% on the full value of the work

    20000.00 x 13% = 2600.00

    $2,600.00

  3. Holdback at 10%, withheld from this payment

    20000.00 x 10% = 2000.00, taken off the pre-tax value

    ($2,000.00)

  4. Payable now

    20000.00 + 2600.00 - 2000.00 = 20600.00

    $20,600.00

  5. HST attributable to the holdback

    $2,000.00 x 13% = 260.00

    $260.00

  6. HST that goes on this period's return

    $2,600.00 charged, less $260.00 deferred to the holdback tax point

    $2,340.00

Questions this page answers

Do I charge HST on the holdback amount?
Yes. The holdback does not reduce the consideration for the supply, so HST is charged on the full value of the work on the invoice. The holdback is then deducted from what is payable now, after the tax has been calculated.
Do I have to remit HST on money that is being held back from me?
Not straight away, where the holdback is retained under a statute or a written contract. Section 168(7) of the Excise Tax Act moves the tax point on the held share to the earlier of the day the holdback is paid out and the day it is required to be paid out.
When is holdback required to be paid out in Ontario?
Since 1 January 2026 the owner publishes a Form 6 notice of annual release of holdback within 14 days after each contract anniversary, and payment falls due no earlier than 60 days and no later than 74 days after publication. A job finishing inside a year, and the final tranche on a longer one, is payable 14 days after every lien has expired or been satisfied.
What if the holdback is not statutory and not in the contract?
Then section 168(7) does not reach it and no deferral applies. The HST on the whole invoice is payable on the earlier of the day the consideration is paid and the day it becomes due, whether or not the money is being withheld.

Or stop doing this per invoice

Turn the holdback toggle on in the invoice builder and the ten percent comes off every Ontario invoice by itself, HST is calculated on the full value of the work, and the held amount is separated on the document your client receives.

Every held dollar then sits in one tracker with a countdown, so the day it becomes claimable you get told, instead of finding a tenth of a job you forgot about a year later. There is no monthly charge for any of it.

Open the demo businessRead the holdback guide

Where these figures come from

  • hst_rate (CA-ON) Published source Last read from the source Aug 12, 2026.
  • holdback_tax_charged_on_full_consideration (CA-ON) Published source Last read from the source Aug 12, 2026.
  • holdback_tax_point (CA-ON) Published source Last read from the source Aug 12, 2026.
  • holdback_tax_point_without_authority (CA-ON) Published source Last read from the source Aug 12, 2026.
  • holdback_annual_release_is_tax_point (CA-ON) Published source In force from Jan 1, 2026. Last read from the source Aug 12, 2026.
  • holdback_payment_window_open_days (CA-ON) Published source In force from Jan 1, 2026. Last read from the source Aug 12, 2026.
  • holdback_payment_window_close_days (CA-ON) Published source In force from Jan 1, 2026. Last read from the source Aug 12, 2026.

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