July 16, 2026

BC PST for Engineering Firms: New Rules Starting October 1, 2026

BC engineering firms, hold on to your hard hats! The new PST rules are about to turn invoicing into a design challenge no one asked for.

Starting October 1, 2026, PST will apply to certain engineering and geoscience services in British Columbia.

Before adding 7% PST to every invoice, pause for a moment. Some services will be taxable, while others will remain exempt. One project may include both.

This guide explains the new BC PST rules for engineering firms and how to set up your engineering invoices correctly in QuickBooks Online.

How Much PST Applies to Engineering Services?

For taxable engineering services, PST is calculated as:

7% PST on 30% of the taxable engineering fee

This works out to 2.1% of the taxable fee.

For example, if your firm charges $10,000 for taxable engineering work:

  • PST applies to $3,000
  • PST is $210
  • GST is $500
  • Total invoice is $10,710

Not too scary. Just complicated enough to make the invoicing setup really important.

Which Engineering Services Are Taxable?

Common taxable services include:

  • Schematic design
  • Design development
  • Contract document preparation
  • Tender services

These services generally fall under categories 2, 3 and 4 of the ACEC-BC Budget Guidelines for Engineering Services.

PST may apply when your firm is hired to:

  • Prepare structural designs for a commercial building
  • Create mechanical or electrical construction drawings
  • Complete detailed design work
  • Prepare engineering plans
  • Prepare tender documents

The project location also matters. For example, an Alberta company hiring your firm to design a building located in BC would generally still pay BC PST.

Which Engineering Services Are Exempt From PST?

The following services are generally exempt:

  • Advisory services
  • Construction-related services
  • Resident engineering services
  • Project management services
  • Construction management services

These services generally fall under categories 1, 5, 6, 7 and 8 of the ACEC-BC Budget Guidelines for Engineering Services.

PST may not apply when your firm is hired to:

  • Provide early advice about a project
  • Review possible design options
  • Manage the project schedule and budget
  • Monitor construction work
  • Coordinate contractors
  • Provide resident engineering services

Clear invoice descriptions are important. A line that simply says “engineering services” does not explain why PST was or was not charged.

Vague invoice lines are where tiny tax gremlins like to hide.

Need help getting ready for October 1? Deximal can review your current QuickBooks Online setup and help you prepare before the new rules take effect.

How to Set Up Taxable and PST-Exempt Engineering Services in QuickBooks Online

Many engineering projects include both taxable and PST-exempt work. Separating each service in your proposal, estimate and invoice makes the tax treatment much easier to explain.

Getting the setup right before October 1, 2026 will also be much easier than correcting invoices later.

One option in QuickBooks Online is to divide the taxable engineering fee between two service items.

Go to:

Settings → Products and Services → New → Service

Create these three service items:

Engineering Services, 30% PST-Taxable Portion

Use this item for 30% of the taxable engineering fee.

Set the sales tax code to GST/PST 12%.

Engineering Services, 70% GST-Only Portion

Use this item for the remaining 70% of the taxable engineering fee.

Set the sales tax code to GST 5%.

Engineering Services, PST-Exempt

Use this item for PST-exempt services, such as project management, construction monitoring or advisory work.

Set the sales tax code to GST 5%.

PST-exempt does not mean tax-free. GST still applies, but PST does not.

Only split the taxable engineering fees. Enter PST-exempt services on their own invoice lines.

For a practical example, assume a structural engineering invoice includes:

  • $15,000 of taxable design and drawing preparation
  • $3,000 of PST-exempt construction monitoring
DescriptionAmountSales tax code
Engineering services, 30% PST-taxable portion$4,500GST/PST 12%
Engineering services, 70% GST-only portion$10,500GST 5%
Construction monitoring, PST-exempt$3,000GST 5%

This calculates:

  • GST of $900
  • PST of $315
  • Total invoice of $19,215

Incorrect tax codes can lead to undercharging clients, paying PST out of your own pocket or correcting months of invoices later.

Alternatively, you can create a custom 2.1% PST rate and apply it only to taxable engineering service lines. PST-exempt services would remain on separate lines with GST only.

Not interested in becoming your firm’s unofficial PST specialist? Deximal can take care of the setup and keep it running properly through your monthly bookkeeping. Deximal can customize the QuickBooks Online Sales Tax module and set up the correct tax rates and service items for both taxable and PST-exempt work.

Other Helpful QuickBooks Online Features for Engineering Firms

While updating your invoicing, this is also a good time to review a few other useful QuickBooks Online features:

  • Automatic invoice reminders to follow up on overdue accounts
  • Online payment options so clients can pay directly from the invoice
  • Progress invoicing from estimates to bill projects in stages while keeping sales tax connected to the original estimate
  • Project tracking to review revenue, expenses and profitability by project
  • Recurring invoices for retainers or fixed monthly billing
  • Receipt and document uploads to keep project records organized

A good QuickBooks Online setup should do more than calculate PST. It should help you understand where you are making and losing money.

Deximal can help turn QuickBooks Online into something you actually use to run your business, not just visit once a year like a distant relative.

Does Your Engineering Firm Need to Register for PST?

Your engineering firm will generally need to register if it sells taxable engineering or geoscience services on or after October 1, 2026.

You may not need to register if:

  • You provide only exempt services
  • You qualify under the PST small-seller rules

Registration is completed online through eTaxBC. Firms selling taxable services must also file and pay PST electronically.

Review Projects That Cross October 1, 2026

Pay extra attention to projects that begin before October but continue after the new rules take effect.

Review your:

  • Fixed-fee contracts
  • Deposits
  • Monthly retainers
  • Unbilled work
  • Progress invoices
  • Projects with both design and construction phases

The timing rules can depend on when the client is billed, when payment becomes due and when the work is completed.

Reviewing these projects now will be easier than explaining an unexpected PST charge later.

Have active projects that will continue past October 1? Deximal can help review the invoicing setup before the new rules begin.

Need Help With Bookkeeping for Your BC Engineering Firm?

If your bookkeeping already feels like one more project competing for your attention, the new PST rules will not make it simpler.

Deximal can help set up the new PST process correctly in QuickBooks Online and keep it running properly through your monthly bookkeeping, tax filings and year-end work.

Deximal is a BC-based, tech-savvy accounting firm specializing in paperless bookkeeping, secure online tax preparation and practical QuickBooks Online support for small businesses.

We can help you:

  • Keep your bookkeeping accurate and your tax filings on time
  • See which projects are profitable and where costs are increasing
  • Set up GST and PST correctly in QuickBooks Online
  • Store receipts electronically and eliminate the paper filing system
  • Prepare your business taxes through a secure online process
  • Estimate taxes and set up automatic payments to help prevent surprise CRA balances
  • Meet with Alicia for practical advice when making important business decisions

Our goal is to give you reliable numbers, fewer tax surprises and helpful advice without adding another administrative project to your schedule.

Book a free inquiry meeting with Alicia to review your QuickBooks Online setup and learn how Deximal can take the bookkeeping and tax work off your plate.

You handle the calculations that keep projects standing. Let us handle the calculations that keep your books balanced.

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