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Year-End Accounting · T2 Filing · Licensed CPA

Year-End Accounting & T2 Filing for Construction Companies

The close that produces the numbers your return reports: jobs measured where they actually stand at year end, work in progress recognised, holdbacks receivable and payable separated, T5018 reconciled, equipment capitalised, and the shareholder loan quantified. T2 from $400. All fees include HST.

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Construction Corporations
Year-end close, T2 filing and construction CPA services
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Weekend and evening support until 9 PM
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Just a call away when you need us

AFFORDABLE Year-End Accounting & T2 Filing for Construction Companies

Most contractors experience year end as a filing. The invoices and statements go to the accountant, a return comes back, tax gets paid. But the return only reports what the close decided. Where each open job actually stands, whether the work performed but not yet billed made it into the year, whether the holdback you cannot collect is being reported as profit, whether the excavator is an asset or an expense: all of it is settled during the close, before the T2 is written.

A contractor's close is not an ordinary one. Your jobs cross the year end, so revenue and cost have to be measured at a point where the work is half done. Your holdbacks are money earned that you cannot collect and money owed that you have not paid. Your subtrades carry a T5018 obligation and a classification risk that lands on you. We close the year and file the T2 from the same office, which is how our construction CPA services are set up.

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Gondaliya CPA team - year-end accounting and T2 filing for construction companies

Our Year-End Services for Construction Companies

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Work in Progress

We measure where each open job stands and recognise the work performed but not yet billed.

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Holdbacks Receivable & Payable

We separate what you have earned but cannot collect from what you owe but have not paid.

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T5018 Reconciliation

We reconcile subcontractor payments to your T5018 filings and bring the obligation current.

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Equipment & Capital Cost Allowance

We capitalise equipment into the right class and handle recapture on disposal.

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Job Costing Rebuild

We trace materials, labour and subtrades back to the jobs that consumed them.

✅

T2 Filing

We prepare and file the corporate return from a properly closed year. From $400, including HST.

Year-End Accounting for Construction Companies by a Licensed CPA

The close that produces the numbers, then the return that reports them. From job measurement to filed T2. AFFORDABLE flat-fee pricing.

1

Jobs That Cross the Year End

Where a contractor's close differs most.

  • Measure how much of each open job has actually been performed.
  • Recognise revenue on the work done, not the progress draw schedule.
  • Record work performed but not yet billed as this year's revenue and cost.
  • Identify any job expected to lose money while it is still known.
  • Keep the measurement basis consistent so profit does not drift between years.
2

Holdbacks, Receivable and Payable

Money earned you cannot collect, money owed you have not paid.

  • Record the holdback receivable rather than ignoring it until release.
  • Record the holdback payable owed to your subtrades.
  • Keep both on the balance sheet, not buried in revenue and costs.
  • Handle the HST on the holdback portion as it becomes payable.
  • Reconcile releases against the original certification.
3

Subcontractors, T5018 and Classification

Two exposures that land on the contractor.

  • Reconcile subcontractor payments against your T5018 filings.
  • Bring the T5018 obligation current where it has never been filed.
  • Assess whether your subtrades are contractors or employees on the facts.
  • Record subtrade payments to match the substance, not the invoice heading.
  • Coordinate the position with your WSIB and payroll compliance.
4

Accruals and Job Costing

Costs that belong to the job and the year.

  • Accrue materials delivered and subtrade work performed but not invoiced.
  • Record equipment rentals, accrued wages and vacation pay.
  • Trace materials, labour and subtrades back to the jobs that consumed them.
  • Reconcile supplier statements so nothing is missed at the cut-off.
  • Give you job margins that mean something rather than one blended total.
5

Equipment, CCA and the Shareholder Loan

Your capital position and your drawings.

  • Capitalise equipment into the class that fits the asset.
  • Separate repairs that restore from upgrades that better the asset.
  • Determine recapture where equipment was sold or traded in the year.
  • Quantify what you drew from the corporation through the year.
  • Deal with the loan balance before it becomes an inclusion in your income.
6

Working Papers, Statements and T2 Filing

One firm for the close, the return and the year ahead.

  • Hold the job schedules and holdback reconciliations behind every figure.
  • Reconcile the HST in your books to the HST on your filed returns.
  • Produce statements a bonding company or lender will actually accept.
  • Prepare and file the T2 from a properly closed year.
  • Track both dates: the return deadline and the earlier balance-due date.

Free Construction Year-End Consultation

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Free Construction Year-End Consultation

Case Studies: Construction Year-End and T2

General Contractor, Toronto (Work in Progress)

Revenue had been recorded from progress billings, so three jobs that straddled the year end carried weeks of unbilled work that never reached the year. We measured each open job on the work actually performed and recognised the work in progress, and the year finally reported what had been built. The figures here are illustrative of the work we do, not a specific client file. Construction Bookkeeping →

Open jobs measured properly

Trade Contractor, Mississauga (Holdbacks Separated)

Holdbacks receivable had been treated as collected revenue and holdbacks payable were not recorded at all, so the balance sheet showed profit the contractor had never been paid. We separated both and corrected the HST timing on the holdback portion. The figures here are illustrative of the work we do, not a specific client file. Holdback Accounting →

Holdbacks off the income statement

Builder, Brampton (T5018 Brought Current)

A dozen subtrades had been paid every year and no T5018 had ever been filed, and the owner did not know the obligation existed. We reconciled the subcontractor payments, brought the filings current, and reviewed the classification position before the CRA raised it. The figures here are illustrative of the work we do, not a specific client file. Subcontractor Classification →

T5018 current, classification reviewed

Construction Corporation, Ontario (Close Made Routine)

An owner was rebuilding a year of job costs every year end, and the bonding company had queried the statements twice. We moved them to monthly bookkeeping with jobs costed as they run, so the close became a confirmation and the statements held up at prequalification. The figures here are illustrative of the work we do, not a specific client file.

Monthly books, routine year-end

Ordinary Year-End vs a Construction Year-End

Jobs that cross the date, holdbacks, subtrades and T5018 make a contractor's close a different exercise.

ConsiderationOrdinary Year-EndA Construction Year-End
RevenueSold and delivered within the periodJobs half built at the date, measured on work performed
BillingInvoice matches what was deliveredProgress draws rarely match the work behind them
ReceivablesInvoiced and collectibleHoldbacks earned but not collectible until certification
PayablesSupplier invoicesHoldbacks payable to subtrades, plus costs not yet invoiced
Information returnsUsually none beyond payrollT5018 on subcontractor payments, separate from the T2
WorkforceEmployees, settledSubtrades whose status is decided on facts, not invoices

What a Construction Year-End Close Must Cover

Recording transactions is only the start. These items decide your tax position before the return is written.

ItemWhy It Matters for Your CorporationHow We Handle It
Work in progressUnbilled work vanishes from the year it was earned inEach open job measured on work actually performed
Expected lossesA losing job hides until it is too late to price aroundIdentified in the close, while the next bid is still open
Holdbacks receivableProfit reported on money you cannot collectRecorded as a receivable, not as collected revenue
Holdbacks payableUnderstates what you owe your subtradesRecorded on the balance sheet, releases reconciled
T5018Separate filing, own deadline, own penaltiesReconciled to subcontractor payments and brought current
Subtrade classificationReclassification exposure sits with the contractorPosition assessed on the facts, before the CRA
Equipment and CCAExpensing an excavator misstates the deduction and the balance sheetCapitalised into the correct class, recapture determined
Shareholder loanCan be included in your personal incomeQuantified and dealt with before the deadline passes

The close records what happened. It cannot change it. Compensation mix, the shareholder loan, whether to buy equipment this year or next: every one is a lever that works before your year end and stops working after. Please talk to us before your year end rather than after, because the close can only measure what the year already contains.

What Is Included in Our Construction Year-End Service

Everything from the close to the filed return. No hourly billing. All fees include HST.

IncludedWhat We Do
Work in progressWe measure each open job and recognise work performed but not billed.
HoldbacksWe separate holdbacks receivable and payable and handle the HST timing.
T5018 reconciliationWe reconcile subcontractor payments and bring the filings current.
Classification reviewWe assess the subtrade position on the facts before the CRA does.
Accruals and job costingWe accrue uninvoiced costs and trace them to the jobs that consumed them.
Equipment and CCAWe capitalise correctly, maintain the schedule and determine recapture.
Shareholder loanWe quantify the balance and deal with it before it becomes income.
T2 preparation and filingWe prepare and file the return from a properly closed year.

The Construction Year-End Mistakes We Prevent

#MistakeWhy It HurtsHow We Prevent It
1Recording revenue on progress billingsUnbilled work vanishes from the year it was earned inJobs measured on work actually performed
2Treating holdbacks receivable as collectedProfit reported on money you cannot collectRecorded as a receivable on the balance sheet
3Not recording holdbacks payableUnderstates what you owe your subtradesRecorded and reconciled against certification
4Remitting HST on the holdback too earlyHST paid on money not yet receivedTiming handled as the amount becomes payable
5Never filing a T5018A separate obligation with its own penaltiesReconciled to payments and brought current
6Assuming an invoice settles subtrade statusReclassification exposure sits with youPosition assessed on the facts, before the CRA
7Expensing equipment in the yearMisstates the deduction and the bonding positionCapitalised into the correct class
8All costs in one overhead accountJob margins are guesswork and bids repeat the errorCosts traced to the jobs that consumed them

Why Choose Gondaliya CPA for Your Year-End and T2?

📊

Built Around a Contractor

Work in progress, holdbacks, T5018 and subtrade status handled properly, not as an ordinary business.

📋

Licensed CPA Firm

The close, the working papers and the T2 all from a licensed CPA firm, from one office.

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Construction Experience

Trades, general contractors and builders. Job costing, holdbacks, WSIB, T5018 and T2 filing.

🤝

AFFORDABLE Flat Fee

Quoted upfront, all fees including HST, no hourly billing. 30-Day Money-Back Guarantee. 60-Day Fees-Matching Policy.

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Transparent Flat-Fee Pricing

No hourly billing. No surprises. You know your exact fee before we start. All fees include HST.

ServiceFeeIncludes
T2 filing for construction corporationsFrom $400Corporate return prepared and filed from a properly closed year.
Construction bookkeepingFrom $100/monthMonthly books with jobs costed and the loan balance tracked.
Year-end close plus T2Quoted upfrontWork in progress, holdbacks, T5018, accruals, equipment and the filed return.
Catch-up bookkeepingQuoted upfrontRecords and job costing brought current before the close begins.
Free consultationFREEScope review and exact flat-fee quote before any work begins.

All fees include HST, so the number quoted is the number you pay. Fees depend on the number of open jobs, the complexity of the corporation and the state of the records. Payment is by Interac e-Transfer to info@gondaliyacpa.ca with auto-deposit enabled and the security question set to Not Applicable. Please use our pricing calculator to know your exact fee.

How It Works

Four steps. The heavy lifting sits with us.

1

Consult

We learn your year end, how many jobs are open, whether you use subtrades, whether holdbacks are tracked, and the state of your records, then quote a flat fee.

2

Close

We measure each open job, recognise the work in progress, separate the holdbacks, reconcile T5018, accrue the uninvoiced costs and quantify the loan.

3

File

We prepare and file the T2 from the closed year, with the working papers held behind every figure.

4

Plan Ahead

We set the job costing cycle and the pre-year-end review so next year the decisions are made while the levers still work.

Construction Year-End and T2: Cities We Serve

We handle year-end and T2 filing for contractors across every Ontario city and Canada. No distance limits, no extra fees.

Frequently Asked Questions

What does year-end accounting for a construction company involve?
It is the work that produces the numbers your T2 reports: measuring where each job stands at year end, recording revenue on the work completed rather than the cash received, separating holdbacks receivable and payable, accruing costs incurred but not invoiced, valuing equipment, reconciling subcontractor payments and T5018 filings, and quantifying the shareholder loan.
How is a construction year-end different from an ordinary business?
Your jobs cross the year end. An ordinary business sells and gets paid within a period; a contractor may start a job in October and finish it in April, so revenue and cost have to be measured at a point where the work is half done. Add holdbacks and T5018 and it is a different exercise entirely.
What does work in progress mean at year end?
It is the value of work performed but not yet billed. If your crew put three weeks into a job before your year end and the progress draw goes out afterwards, that work is this year's revenue and this year's cost. Leaving it out understates the year and distorts every job that straddles the date.
Should revenue be recorded when I invoice or when the work is done?
Generally on the work performed, not the invoice date and not the cash. Progress billings rarely line up with the work behind them, so a contractor billing on a draw schedule reports revenue that has little to do with what was actually built that period. The close corrects it.
How do you measure a job that is only part finished?
By reference to how much of the work has actually been performed, most commonly by comparing costs incurred to date against the total expected cost of the job. That means your job costing has to be reliable, because the measurement is only as good as the cost data behind it.
What if a job is going to lose money?
An expected loss on a contract is generally recognised as soon as it is known, rather than spread across the remaining work. Contractors are often reluctant to face this at year end, but a loss identified in the close is a loss you can still do something about on the next bid.
What are holdbacks and how do they affect my year end?
A holdback is a portion of each progress payment retained until the work is certified complete. Holdbacks receivable are money you have earned but cannot collect yet, and holdbacks payable are money you owe your subtrades but have not paid. Both belong on the balance sheet, not buried in revenue or costs.
Should holdbacks be recorded as revenue?
The holdback receivable is part of what you earned on the work performed, so it sits as a receivable rather than being ignored until it is released. What it is not is collected cash, and treating it as such is how contractors end up reporting profit they have not been paid for. See our holdback accounting guide.
How is HST handled on holdbacks?
The HST on the holdback portion generally follows when the amount becomes payable rather than when the invoice is issued, which is a common point of confusion. Getting it wrong means remitting HST on money you have not received. See our construction GST/HST filing.
What is a T5018 and does my close depend on it?
It is the Contract Payment Information Return, required where construction is your principal business activity and you pay subcontractors for construction services. It is separate from your T2, with its own deadline and penalties, and the close reconciles what you paid your subtrades against what was reported.
What happens if I have never filed a T5018?
It is a live exposure that should be dealt with proactively rather than waiting for the CRA to raise it. The obligation exists whether or not anyone told you about it, and the amounts flow from your own books. It is worth bringing current alongside the close.
Are my subcontractors actually subcontractors?
It is a question of fact rather than a matter of what the invoice says. The CRA weighs control, ownership of tools, chance of profit and risk of loss, and the overall relationship. Reclassification exposure sits with you, not the subtrade. See our classification guide.
What happens if a subcontractor is reclassified as an employee?
The exposure lands on the contractor: unremitted source deductions, both employer and employee portions, with penalties and interest, and it typically runs across every affected worker and every affected year. WSIB consequences can follow on the same facts. See our WSIB compliance guide.
What are accruals and why do you ask about them?
Costs incurred before year end but not yet invoiced: materials delivered, subtrade work performed, equipment rentals, accrued wages and vacation pay, professional fees. Construction is full of them because suppliers and subtrades invoice late. Missing them understates cost on jobs that straddle the year end.
Is equipment expensed or capitalised?
Equipment with lasting value is capitalised and deducted over years through capital cost allowance. Small tools and consumables are generally expensed. The line matters because an excavator expensed in the year of purchase misstates both the deduction and the balance sheet a bonding company or lender will read. See our capital cost allowance guide.
What happens when I sell or trade equipment?
There can be recapture. Where the proceeds exceed the depreciated value in the class, previously claimed capital cost allowance is added back to income in the year of disposal as ordinary income rather than a capital gain. Contractors turning over equipment regularly meet this more often than they expect.
What is a shareholder loan and why does it come up at year end?
It is what money you took out of the corporation becomes when it is neither salary nor dividend. Contractors draw what they need and pay personal costs from the business account, and the balance grows quietly. Year end is where it gets confronted, because an unrepaid balance can be included in your personal income.
What happens if my shareholder loan is not cleared?
The amount can be included in your personal income, meaning money already spent becomes taxable. It sits on the balance sheet in plain view of any reviewer. It is one of the most avoidable findings in an owner-managed construction file.
Do I decide salary versus dividends at year end?
The decision should be made before your year end, because most of the levers close when the year does. The close confirms the position and executes what was decided. An owner raising it while the return is being prepared has fewer options than one who planned ahead.
Why do lenders and bonding companies care about my year end?
Because your financial statements are what they underwrite. A bonding company assesses working capital and equity to set your surety limit, which determines what you can bid on. A close that misstates work in progress or expenses your equipment can quietly reduce what you are allowed to tender for.
Do I need financial statements as well as a T2?
Your corporation needs financial statements, and bonding companies, lenders and general contractors may ask for them at moments you do not control. Contractors most often need them at prequalification, which is rarely when you want to explain that the books are not current.
Can I pay my spouse through the company?
You can, where the work is real and the pay is reasonable for what they actually do. Estimating, scheduling, invoicing and compliance paperwork are genuine work in a contractor. The duties, hours and a defensible rate need documenting during the year, not assembled when someone asks.
What do you need from me at year end?
Bank and credit card statements through year end, your job list with contract values and costs to date, progress billings and holdback schedules, subcontractor invoices and T5018 records, supplier statements, equipment purchase and financing documents, payroll and WSIB records, and an account of what you drew from the company.
How long does a construction year-end close take?
Where the bookkeeping has been kept monthly and jobs are costed as they run, weeks. Where costs sit in one overhead account and nobody knows what each job consumed, months, because the close then begins with rebuilding the job costing before any measurement is possible.
My job costing is a mess. Can you still close the year?
Yes, but it is a rebuild first, and the result is only as reliable as what can be reconstructed. Materials, subtrades and labour have to be traced back to the jobs that consumed them before work in progress means anything. See our construction bookkeeping and past account clean-up.
How often should my books be done?
Monthly. A contractor reconciling annually cannot see a job going sideways while there is still time to act, meets the shareholder loan when it is already a problem, and bids the next job on last year's guesses. See our construction cash flow management.
What is a working paper file and why does it matter?
It is the support behind every number on your return: the job schedules, the work in progress calculations, the holdback reconciliations. It is what makes the position defensible if the CRA asks. See our construction CRA audit support.
What is the T2 filing deadline for my construction corporation?
Six months after your year end for the return. The balance of tax is generally due earlier, two or three months after year end depending on the corporation. Filing on time and paying on time are separate obligations. If several years are outstanding, see our catch-up corporate tax filing.
What does a construction year-end close and T2 cost?
T2 filing starts from $400 and construction bookkeeping from $100 per month, quoted as an exact flat fee upfront with no hourly billing. All fees include HST. Payment is by Interac e-Transfer to info@gondaliyacpa.ca, auto-deposit enabled, security question Not Applicable. Please use our pricing calculator.
How do I get started?
Please book a free consultation and tell us your year end, roughly how many jobs are open, whether you use subtrades, whether holdbacks are tracked, and the state of your records. We confirm what your close involves and quote a flat fee. Book Free Consultation →

Meet Your Construction Year-End Team

Sharad Gondaliya CPA

Sharad Gondaliya, CPA

Founder & Managing Director
Gondaliya CPA Professional Corporation

Sharad leads the year-end close, subtrade classification and T2 filing for construction corporations.

Vandana Goel CPA

Vandana Goel, CPA

Senior Accountant
Gondaliya CPA Professional Corporation

Vandana handles the job measurement, holdback reconciliation, T5018, accruals and working papers.

What Our Clients Say

1300+ five-star reviews from contractors and business owners across Ontario and Canada.

Related Services for Construction Companies

Construction Bookkeeping

  • Monthly job costing
  • Shareholder loan tracking
  • From $100/month, including HST

Holdback Accounting

  • Receivable and payable separated
  • HST timing on the holdback
  • Releases reconciled to certification

Catch-Up Corporate Tax Filing

  • Unfiled years brought current
  • Penalty and interest exposure
  • Records rebuilt in order

WSIB Compliance

  • Registration and clearances
  • Subtrade coverage exposure
  • Premiums and reporting

A Close That Confirms, Not One That Excavates.

Gondaliya CPA measures each open job on the work actually performed, recognises the work in progress your billings missed, separates holdbacks receivable and payable and handles the HST timing, reconciles your T5018 and reviews subtrade classification before the CRA does, capitalises your equipment correctly, quantifies the shareholder loan, and files the T2 from a properly closed year. T2 from $400. All fees include HST.

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