Most homeowners in the Greater Toronto Area get one or two renovation quotes before picking a contractor. But very few know what a normal payment schedule looks like — and that gap costs people money, causes disputes, and occasionally ends relationships before the drywall goes up.
Here’s how contractor billing works in the GTA, what’s standard, what’s negotiable, and a few things the quote won’t mention upfront.
The standard draw schedule
Contractors in Ontario typically structure payments around project milestones, not calendar dates. A draw schedule that’s become fairly standard for mid-to-large renovations looks like this:
- 10% at contract signing (deposit)
- 25% when permits are issued and work begins on site
- 25% at rough-in completion (framing, rough electrical, rough plumbing in the walls)
- 25% at substantial completion
- 15% final holdback upon walkthrough and sign-off
The holdback is there for you. If something goes wrong on final inspection — a door that won’t close properly, tile grout that’s cracked, a fixture that wasn’t installed to spec — you still have 15% of the contract value to negotiate with. Do not release the final payment before you’ve done a proper walkthrough. That’s the only moment where you still have leverage.
Some contractors will push for larger upfront deposits, particularly if materials need to be ordered ahead of start date. A 20–25% deposit isn’t unreasonable if custom cabinetry or long-lead items are involved. Beyond that, be cautious.
The HST line that surprises people
If your contractor quotes you $100,000 for the renovation, the cost at invoice is $113,000.
HST at 13% applies to both labour and most materials on residential renovation work in Ontario. It’s non-recoverable — unlike commercial projects where businesses claim it back. The tax hits the full contract value, and no rebate offsets it for standard residential work.
This doesn’t mean contractors are hiding it. The problem is that people get attached to the headline number before HST is factored in, then feel blindsided at the invoice stage. When comparing quotes, always ask whether the number is plus HST or inclusive of it. That single question prevents a lot of frustration.
Labour rates and soft costs you should budget for
Qualified trades in the GTA run roughly $82–$132 per hour depending on specialty. Electricians and structural carpenters tend to sit toward the higher end; general labourers toward the lower. These rates reflect a tight labour market that hasn’t softened much into 2026.
Soft costs — permit fees, engineering consultations if structural work is involved, and waste disposal — typically add 8–15% to the contractor’s base quote. On a $60,000 project, that’s an additional $5,000–$9,000 before the project is complete.
Permit fees vary by municipality and project scope. For anything involving structural changes, additions, or full HVAC replacement, budget $400–$2,500 for the permits themselves. If the project requires an engineer’s stamp, add another $1,500–$6,000.
The 10–20% contingency rule
Every experienced contractor will tell you to hold 10% in reserve. For older GTA housing stock, the honest number is closer to 15–20%.
The reason is what shows up after demo. Pre-1980 homes in Toronto, Etobicoke, Scarborough, and Mississauga regularly reveal knob-and-tube wiring that has to be replaced before the walls close, asbestos in floor tiles or ceiling texture that requires certified abatement, and structural issues that only become visible once the drywall is out. None of this is the contractor’s fault. None of it was in the quote. All of it has to be dealt with before work continues.
Budget the contingency from day one. If you don’t use it, you’ve had a smoother project than average. If you need it, you’ll be glad it existed.
Timing and pricing
March–April and September–October tend to have softer contractor availability in the GTA compared to the summer peak. Some contractors price 5–10% better during these windows — not a formal discount, but they’re competing harder for the work. If your project isn’t time-sensitive, getting quotes in February or August and scheduling for shoulder season can save real money.
One more thing worth knowing
For projects over $50,000, ask whether your contractor is willing to include a holdback agreement in writing. Ontario’s Construction Act gives subcontractors lien rights on your property if the general contractor doesn’t pay them — meaning a dispute between your GC and their plumber can end up as a lien against your home. A formal holdback clause in the contract, matching the 10% statutory holdback under the Act, protects you from being caught in that.
Most homeowners only learn about construction liens after they receive a notice of one. Getting the clause into the contract upfront costs nothing.
Got questions about your specific project or a quote you’ve received? Drop it below — questions about basement contracts, kitchen builds, or permits in a specific GTA municipality are all fair game.
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