Accounting for Plumbers in Ontario: Call-Outs, Van Stock and the 306A Requirement

Last reviewed: July 2026

A plumbing business has a different financial shape from most trades. Revenue arrives as a large number of small service calls rather than a small number of large contracts, a meaningful share of the work happens after hours at premium rates, and a few thousand dollars of parts live in each van where nobody counts them. Those three facts determine what your bookkeeping has to do, and they are the reason generic small-business accounting produces numbers a plumbing owner cannot use.

Plumber (306A) is also a compulsory trade in Ontario, which puts a certification requirement underneath every hour you bill.

What is different about a plumbing business

Feature	Why it matters to your numbers
High volume, low value jobs	Margin per call matters more than revenue. One bad call type can lose money all year
After-hours and emergency work	Premium billing with premium labour cost. Needs separate margin tracking
Van stock	Parts inventory nobody counts, spread across vehicles
Municipal permits	Pass-through costs that distort revenue if coded as sales
306A compulsory certification	Certification and renewal costs, and a legal requirement to work
Service plus renovation mix	Two business models under one roof, priced differently

Certification: 306A is compulsory

Plumber (306A) is one of Ontario's 23 compulsory trades and a Red Seal trade. To work legally as a plumber a person must hold a Certificate of Qualification, a Provisional Certificate of Qualification, or a Registered Training Agreement, and appear on the Skilled Trades Ontario public register.

Ministry inspectors can request proof of authorization at any time and can issue compliance orders and administrative monetary penalties.

The costs are modest and deductible: the certifying exam is $150 plus HST, with the first attempt waived for those completing an Ontario apprenticeship on or after January 1, 2025, and annual renewal of a compulsory trade certificate is $60 plus HST. The experienced-worker Trade Equivalency Assessment route is $235 plus HST.

One useful thing to know, because it differs from electrical: there is no provincial plumbing contractor licence. Electrical contractors need an ECRA/ESA contractor licence. Plumbing is regulated through individual 306A certification plus municipal Building Code permits and inspections. Some municipalities impose their own business licensing, so check locally, but there is no provincial equivalent of the electrical contractor licence.

After-hours call-outs: where the margin actually is, or is not

Emergency plumbing is priced at a premium, and plumbing owners often assume it is the most profitable work they do. Sometimes it is. Often it is not, and the reason is that the cost side gets a premium too.

An 11pm call carries:

• Overtime or premium labour, at a higher fully loaded cost

• Travel time that is entirely unproductive and unavoidable

• A higher rate of diagnostic-only visits where the fix needs a return trip

• Parts pulled from van stock at whatever cost was last paid, often unrecorded

• A materially higher callback rate on work done fast in bad conditions

If you bill a flat emergency call-out fee, you are averaging across all of that. Track it properly for one quarter, separating after-hours calls into their own job type with actual hours including travel, and you will find out whether the premium is real.

The two most common findings: flat-rate diagnostics are subsidised, and after-hours work is profitable at two hours and loss-making at four.

Van stock is inventory, and it is usually invisible

Three service vans each carrying $4,000 of fittings, valves, cartridges and fixtures is $12,000 of inventory. In most plumbing bookkeeping it appears as an expense the day it was bought from the supply house and then vanishes.

Two consequences. Your gross margin by job is wrong, because the parts consumed on a job are not costed to that job. And your balance sheet understates assets, which matters when a lender or a buyer looks at it.

The practical fix is not a perpetual inventory system, which no plumbing business will maintain. It is:

• Count van stock at year end, per vehicle, and book it as inventory. One evening a year

• Code supply house purchases to a materials account, not directly to cost of sales, so the year-end adjustment has something to move against

• Charge parts to jobs at a marked-up rate that recovers handling, delivery, returns and waste, not at invoice cost

• Watch shrinkage. The gap between what was bought and what was billed or counted is the number worth knowing. It is rarely zero and it is sometimes large

Permits and pass-throughs

Municipal plumbing permits are issued by the local building department under the Ontario Building Code, and fees are set by each municipality, so they vary. Backflow prevention requirements come from the Building Code, and some municipalities layer their own cross-connection control programs on top by by-law.

For the books, the question is simple and consistently mishandled: is the permit inside your quoted price, or a pass-through line to the customer?

Either is fine. What is not fine is coding recovered permit fees to revenue while the permit cost sits in expenses, which inflates both revenue and cost and quietly distorts your gross margin percentage. Pick a treatment, use it consistently, and make sure your bookkeeper knows which it is.

The two businesses under one roof

Most plumbing corporations run service work and renovation or new construction work together. They behave completely differently:

• Service: small invoices, fast payment, high van stock usage, high travel share, priced by call or hour

• Renovation and construction: large contracts, progress billing, holdbacks, subcontractor relationships, T5018 obligations, slow payment

Reporting them together produces a blended margin that describes neither. Set them up as separate job types or classes from the start. Then you can answer the question that actually matters: which one should get the next truck and the next hire.

If you do contract work for builders and general contractors, two things follow that pure service plumbers never deal with: holdbacks with their own HST timing rules, and T5018 slips if more than half your income is from construction and you pay subcontractors more than $500.

The numbers a plumbing owner should see monthly

• Gross margin by job type: service, after-hours, renovation, new construction

• Average invoice value and average hours per call, by type

• Callback rate, and the cost of callbacks

• Van stock movement, purchases versus billed materials

• Utilization by technician: billable hours divided by paid hours

• Accounts receivable ageing, because residential service should not have a 60-day column

Frequently asked questions

Is plumber a compulsory trade in Ontario?

Yes. Plumber (306A) is one of Ontario's 23 compulsory trades. To work legally a person must hold a Certificate of Qualification, a Provisional Certificate of Qualification, or a Registered Training Agreement, and be on the Skilled Trades Ontario public register.

Do I need a provincial licence to run a plumbing company in Ontario?

There is no provincial plumbing contractor licence, unlike electrical which requires an ECRA/ESA contractor licence. Plumbing is regulated through individual 306A certification and municipal Building Code permits. Check whether your municipality imposes its own business licensing.

How should van stock be handled in a plumbing company's books?

Count it at year end per vehicle and record it as inventory, code supply house purchases to a materials account rather than straight to cost of sales, and charge parts to jobs at a marked-up rate. Without this, gross margin by job is wrong and the balance sheet understates assets.

Is emergency plumbing work actually more profitable?

Not automatically. Premium billing comes with premium labour cost, unproductive travel, more diagnostic-only visits and a higher callback rate. Track after-hours calls as their own job type with actual hours including travel for one quarter to find out.

How should permit fees be recorded?

Consistently, one way or the other. Either build them into the quoted price or treat them as a pass-through, but do not record recovered fees as revenue while the cost sits in expenses, because that inflates both revenue and cost and distorts gross margin.

Do plumbers have to file T5018 slips?

If more than 50% of your business income comes from construction activities and you paid a Canadian-resident subcontractor more than $500 for construction services in the reporting period, yes. A pure residential service plumber with no subcontractors generally will not.

What CCA class does a plumbing service van go in?

If it qualifies as a motor vehicle rather than a passenger vehicle, Class 10 at 30% with no cost ceiling. A cargo van used more than 50% to transport goods and equipment generally qualifies, which avoids the $39,000 passenger vehicle cap.

What should a plumbing business review every month?

Gross margin by job type, average invoice value and hours per call, callback rate and cost, van stock movement, technician utilization, and receivables ageing.

Key takeaways

• Plumber 306A is compulsory in Ontario. Certification is a legal requirement, and renewal is $60 plus HST a year

• There is no provincial plumbing contractor licence, unlike electrical

• After-hours premium pricing is not automatically profitable. Separate it as a job type and measure it

• Van stock is real inventory. Count it annually, code purchases to materials, mark up parts on jobs

• Pick one treatment for permit pass-throughs and stay with it

• Service and contract work are two business models. Report them separately or you learn nothing from either

Talk to an accountant who works with plumbers

SKG Financial handles corporate tax, bookkeeping, HST and payroll for plumbing and mechanical corporations across Mississauga, Oakville, Vaughan, Markham, King City, Caledon and Burlington. Job costing that separates service from contract work, van stock, and the HST on holdbacks are routine here. Van stock and call-out margins are not things most accountants ask about. They are things we build into the bookkeeping for plumbing corporations.

Fixed fees quoted up front. Straight answers, no lecture.

Book a free 20-minute call

References: Skilled Trades Ontario, Plumber and Certificate of Qualification. Ontario, compulsory trades and enforcement and Ontario's Building Code. Fees current at July 2026 and set annually. General information only.