Skilled tradespeople — electricians, plumbers, carpenters, welders, HVAC technicians, ironworkers, and others — are among Canada's most in-demand workers. Journeyperson wages have risen sharply in the past decade, and many experienced tradespeople earn well above average Canadian incomes. Despite strong earnings, tradespeople often miss financial planning opportunities specific to their work structure. This guide covers the key financial considerations for both unionized and non-union trades workers across Canada.
Trades wages in Canada vary by trade, province, and union status. Journeyperson hourly rates in 2025:
Union trades in Alberta's oil sands, BC's LNG projects, and major infrastructure projects across Canada often pay 20–40% above standard union rates. Income variability is a key challenge — layoffs during economic downturns, seasonal work (particularly in construction), and the apprenticeship income gap all create cash flow challenges.
Employed tradespersons can claim the cost of eligible tools purchased to earn employment income. The deduction is the lesser of: the total cost of eligible tools minus $1,257 (2025 threshold), or 5% of income from the trade. Maximum deductible amount is $500 per year for the basic tools deduction. Apprentice mechanics have a separate, more generous tool deduction.
Apprentice vehicle mechanics can deduct the cost of tools purchased in excess of $1,257 in a year — potentially thousands of dollars in deductions when starting out and building a tool inventory.
Union dues paid to a labour organization are fully deductible and appear on your T4. Don't miss this deduction — it can represent $2,000–$4,000/year for trades union members.
Many tradespeople work as independent contractors or through their own business. Self-employed tradespeople can deduct: tools and equipment, vehicle expenses (business portion), cell phone (business portion), workwear, safety equipment, business insurance, professional licensing fees, and home office costs if applicable. All income must be reported and HST/GST must be collected and remitted if annual revenues exceed $30,000.
Tradespeople working on remote projects (oil sands, mining sites, remote construction) often receive room and board or a living out allowance (LOA). Tax treatment of LOAs depends on whether they are a reasonable reimbursement of actual costs or effectively additional wage income — the CRA has specific rules. Ensure your employer structures these allowances correctly.
Self-employed tradespeople earning above $120,000–$150,000 consistently may benefit from incorporation. A numbered or named corporation allows income deferral at the small business tax rate, separates personal and business liability, and can be used to retain earnings for lean periods or retirement. However, incorporated tradespeople lose access to union benefits and must manage their own taxes, CPP, and benefits.
For unionized tradespeople, incorporation is usually not available or practical while maintaining union membership. Independent contractors and owner-operator tradespeople are better candidates.
Many unionized tradespeople participate in multi-employer pension plans (MEPPs) — defined benefit or defined contribution plans administered by joint union-employer trustees. Examples include:
These plans provide pension accruals based on hours worked and employer contributions per hour. A tradesperson working full union hours for 30 years can accumulate a meaningful pension — but the pension amount is often lower than public sector DB pensions, and benefit portability between locals can be complex.
Non-union tradespeople have no employer pension and must fund retirement entirely through personal savings. Contributing 15–20% of net self-employment income to RRSP annually — treating it as a non-negotiable expense — is the foundation of a secure retirement.
The TFSA is ideal for tradespeople who have variable incomes. Contributions can be made when income is high and money can be withdrawn tax-free in lean years without affecting RRSP room or other benefits.
Whatever your profession, KOHO offers free banking with no monthly fees and no minimum balance. Use code 45ET55JSYA for a bonus when you open your account.
Open KOHO Free — Code 45ET55JSYA