Alberta Construction Chart of Accounts for Xero (Free)

Construction bookkeeping runs on the same three complications in every province: retained money, a mixed subcontractor base, and job costs that must stay separable. Alberta adds its own flavour, a flat 5% GST with no provincial layer, and jobs that regularly cross into provinces where that stops being true. This Xero chart encodes the whole picture for an Alberta contractor.

Retention has its own geography in the ledger

Holdbacks receivable and holdbacks payable stand apart from ordinary AR and AP, coded to the custom Out of Scope rate. Alberta’s prompt payment and lien rules make retention part of every progress billing cycle, and the held-back slice is money in limbo: not collectible yet, not payable yet, with GST generally crystallizing at release. Fold holdbacks into regular receivables and both your cash forecast and your tax timing go blind.

The cost engine

• Subcontractor labour defaults to AB - GST on Purchases with Out of Scope listed for the unregistered small supplier. The account note makes registration checks a habit, because a denied ITC after the fact is pure loss.
• Materials carries the delivery-point rule in its note: Alberta-delivered means 5%, and out-of-province job sites take that province’s taxes.
• Equipment and tool rentals keeps plant costs out of materials, matching how estimates get built.
• Safety gear and PPE is claimable 5%; permits and inspection fees code Out of Scope because municipal and safety-code charges are not supplies.

Around the trade-specific pieces, the standard Alberta texture holds: crew meals at the 50% ITC limit, insurance exempt with no provincial premium tax line, payroll and source deductions out of scope, commercial yard rent taxable at 5%.

Setup in Xero

Create the three custom 0% rates once (Tax menu, Tax settings, Tax rates: Zero Rated, Exempt, Out of Scope), then import through Accounting, Chart of accounts, Import. Xero fills line tax by contact, then item, then account, so supplier defaults you set later will override these account defaults where you want them to.

For job profitability, put Xero’s tracking categories to work rather than cloning accounts per project: one Job category across these accounts gives per-project labour, materials, and plant without bloating the chart. The readable CSV doubles as the brief for whoever runs the office; its notes column was written to survive being read at speed.

Own the iron or rent it, but code it accordingly

Equipment decisions echo in the chart. A purchased skid steer is a fixed asset: its 5% GST claims once at purchase, its cost recovers over years through capital cost allowance, and its repairs run through repairs and maintenance. A rented one is a period cost in equipment and tool rentals, claimed as it is billed. Crews blur this constantly by putting rental invoices wherever the last one went, and the estimate-versus-actual comparison dies a little each time. Fuel cards deserve the same discipline: they are vehicle or equipment cost at 5%, not miscellaneous site spend, and the card statement’s line detail is the document that supports the credits.

Field habits that keep it clean

1. Reconcile both holdback accounts to contract terms monthly; releases move tax and revenue together.
2. Confirm GST registration when onboarding any sub, and recheck when a small supplier’s volume obviously grows.
3. Route fuel, lumber yard, and rental invoices through their accounts rather than a generic site-costs bucket.
4. For out-of-province jobs, decide the tax treatment when the contract is signed, not when the first invoice lands.

Construction paper arrives muddy, crumpled, and daily. Hubdoc gets it captured and filed. ExpenseFlow reads each bill and receipt, applies the 5% or no-tax treatment the supply actually calls for, distinguishes registered subs from small suppliers, and posts into Xero against these accounts. Dext keeps the regular merchants consistent with supplier rules.

The QuickBooks mirror lives at Alberta construction chart of accounts for QuickBooks, and the rate mechanics at the Alberta Xero tax rates reference.