Who this guide is for
You paid a contractor or subcontractor this year and you need to know which information slip, if any, to file with the CRA. The two slips that usually come up are the T5018, Statement of Contract Payments, and the T4A, Statement of Pension, Retirement, Annuity, and Other Income, where box 048 reports fees for services.
This page answers the "which slip" question. For the full T5018 process (reporting periods, the summary form, tracking payments), read our T5018 guide for contractors.
This is general information based on the Canada Revenue Agency's published guidance and the Income Tax Regulations, checked September 2026. It is not tax advice. Mixed business lines, related companies, and non-resident contractors can change the answer, so confirm your situation with an accountant.
How we researched this
This is a research-only guide. We did not file these returns ourselves. Every rule below comes from canada.ca pages (the T5018 and T4A slip instructions, the CRA's T4A guide RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary, and the CRA's filing-deadline and penalty pages) and from sections 200, 205, and 238 of the Income Tax Regulations. Where the CRA does not address a situation directly, we say so rather than fill the gap with a guess. The full source list is at the end.
The short answer
The deciding question is what your business mainly does, not what the contractor does.
- Your business is primarily construction (more than 50% of your business income) and you paid a Canadian-resident subcontractor for construction services: file a T5018. The CRA's T4A guide says not to fill out a T4A slip for these payments.
- Your business is not primarily construction: the CRA's T5018 instructions say to use a T4A slip instead. Fees paid for services go in box 048 when the calendar-year total is more than $500.
The law points the same way. Section 200(1) of the Income Tax Regulations requires an information return for payments described in subsection 153(1) of the Income Tax Act, which includes fees for services, unless the payment was already reported under section 238. Section 238 is the T5018 rule. So a payment goes on one slip, not both.
Quick decision checklist
Work through these in order for each contractor you paid:
- Is the person your employee? Then neither slip applies. Employment income goes on a T4, and the CRA says not to report payments to your employees on a T4A. If you are unsure whether someone is an employee or self-employed, either of you can ask the CRA for a CPP/EI ruling.
- Is the contractor a non-resident of Canada? Then it is a T4A-NR, not a T4A or T5018, and different withholding rules apply.
- Did you pay only for goods? A payment for goods only is not reported on a T5018, and box 048 covers fees for services. A materials-only supplier generally gets neither slip.
- Is more than 50% of your business income from construction, and was the payment for construction services? File a T5018 if your total payments to that subcontractor were more than $500 for the year, before GST/HST.
- Otherwise, was it a fee for services? Report it in T4A box 048 if the total for the calendar year was more than $500 (or if you deducted tax from any payment).
T4A vs T5018 side by side
| Feature | T5018 | T4A (box 048) |
|---|---|---|
| Who files | Businesses with more than 50% of business income from construction, paying resident subcontractors for construction services | Businesses and organizations paying fees for services to a person outside an employment relationship |
| Threshold | More than $500 to a subcontractor for the year, not including GST/HST | More than $500 in the calendar year, or any payment you deducted tax from |
| GST/HST and PST in the reported amount | Included in box 22 | Not included in box 048 |
| Reporting period | Calendar year or fiscal period, chosen once | Calendar year |
| Due to the CRA | Six months after the end of the reporting period | Last day of February after the calendar year |
| Copy to the recipient | Not required (optional) | Required by the last day of February |
| Must e-file | More than 5 slips for a calendar year | More than 5 slips for a calendar year |
| Regulation | Income Tax Regulations s. 238 | Income Tax Regulations s. 200(1), with the due date in s. 205(1) |
Who must file a T5018
The CRA says you must issue a T5018 slip (or send a listing of the same information) if all of these apply:
- Your primary source of business income is more than 50% from construction activities. The CRA's test: if more than 50% of a business's income-earning activities are construction, its primary source of business income is considered to be construction.
- You paid Canadian-resident subcontractors for construction services, performed inside or outside Canada.
- Your total payments to a subcontractor for the year were more than $500, not including GST/HST.
"Construction activities" is broad. Section 238(1) of the Income Tax Regulations includes the erection, excavation, installation, alteration, modification, repair, improvement, demolition, destruction, dismantling, or removal of all or part of a building, structure, surface or sub-surface construction, or similar property. Renovation and repair trades are covered, not just new builds.
This applies whether the subcontractor is a sole proprietor, partnership, or corporation. The slip identifies the recipient by their 15-character program account number (for example, 123456789RT0001) or their SIN.
Reporting period and deadline. You report on a calendar-year or fiscal-period basis. Once you choose, section 238(3) says you cannot change it for later years unless the CRA authorizes it. Section 238(4) says the return is due within six months after the end of the reporting period. A calendar-year 2026 return is due June 30, 2027. There is no February deadline for T5018 slips, and you are not required to give subcontractors a copy.
Our T5018 guide for contractors covers the rest: the summary form, fiscal-period examples, and a year-round tracking routine.
Who must file a T4A for fees for services
The CRA calls this "reporting fees for service." Businesses of all sizes, from sole proprietors to large corporations, plus charities, non-profits, and governments, are expected to report fees paid to other businesses for services. The CRA's payroll pages put it as paying a fee to a person to provide a service outside of an employment relationship.
Threshold. Under the CRA's administrative policy, you fill out a T4A slip if the total of all payments in the calendar year was more than $500, or if you deducted tax from any payment.
What goes in box 048. The CRA's instruction is to report any fees or other amounts paid for services, and not to include GST/HST or PST in the amount. If the recipient is a business (sole proprietor, partnership, or corporation), you enter its business number in box 013.
Withholding. For most Canadian-resident contractors, the CRA says not to withhold CPP, EI, or income tax from fees for services. You simply report the fees on the T4A.
Deadline. You file the T4A slips and the T4A Summary on or before the last day of February following the calendar year, and you must give recipients their copies by the same date. For 2026 payments, February 28, 2027 is a Sunday. The CRA treats a return as on time if it receives it by the next business day, which is Monday, March 1, 2027. Our tax deadline calendar lists both dates.
Edge cases the CRA addresses (and one it does not)
A non-construction business pays for construction work. A restaurant that hires an electrician, or a retailer that pays a roofer, is not primarily in construction. The CRA's T5018 instructions say to use a T4A in that case, so the electrician's or roofer's fees go in box 048 if they total more than $500 for the year.
A construction business pays for non-construction services. Think of a general contractor paying a bookkeeper, a marketing agency, or an IT consultant. The CRA's T5018 rules cover payments for construction services, and its T4A guide only redirects construction-service payments to the T5018. Our reading is that fees for other services fall under the general fees-for-service rule, which means T4A box 048. The CRA does not spell this case out, so confirm with your accountant.
Incorporated subcontractors. For a T5018, there is no carve-out for corporations: construction payments to an incorporated resident sub are reported like any other. For a T4A, the CRA's box 013 instruction expects business recipients, including corporations, and the fees-for-service requirement is framed as fees paid to other businesses. What changes for corporations is enforcement, not the rule: the CRA's only active box 048 penalties target payments to Canadian-controlled private corporations in trucking.
GST/HST in the amount. The two slips treat sales tax differently, which trips people up:
| Question | T5018 | T4A box 048 |
|---|---|---|
| Is the $500 threshold tested before GST/HST? | Yes, the CRA says not including GST/HST | The CRA does not say |
| Does the reported amount include GST/HST and PST? | Yes, box 22 includes them | No, box 048 excludes them |
For example, if you are in construction and paid an Ontario subcontractor $2,000 plus 13% HST, the T5018 shows $2,260.00. If you are not in construction and paid the same sub the same amount, the T4A box 048 shows $2,000.00. Because the CRA's T4A pages do not state whether the $500 test is before or after tax, check with your accountant if a total sits close to $500.
Mixed goods and services. On the T5018 side, only payments for goods only are excluded, so a supply-and-install subcontract is reportable. Section 238(2) covers amounts paid for goods or services rendered in the course of construction activities. For T4A box 048, the CRA's instructions refer to fees or other amounts paid for services and do not give a rule for splitting a mixed invoice. If you pay a non-construction contractor for a mix of parts and labour, ask your accountant how to report it.
Non-resident subcontractors. Neither slip applies. The CRA directs these payments to the T4A-NR slip, with 15% withholding on fees for services rendered in Canada.
How to file, and the penalties
Electronic filing. If you file more than 5 slips of one type for a calendar year, you must file electronically. This applies separately to each type of information return, so 4 T4A slips and 4 T5018 slips can both go on paper. The CRA's free Web Forms service handles up to 100 slips and supports both the T4A and T5018.
Late filing. T4A and T5018 are both covered by the CRA's relieving administrative policy, which reduces late-filing penalties for smaller filers:
| Slips filed late | Penalty per day (up to 100 days) | Maximum |
|---|---|---|
| 1 to 5 | Flat penalty | $100 |
| 6 to 10 | $5 | $500 |
| 11 to 50 | $10 | $1,000 |
| 51 to 500 | $15 | $1,500 |
| 501 to 2,500 | $25 | $2,500 |
| 2,501 to 10,000 | $50 | $5,000 |
| 10,001 or more | $75 | $7,500 |
Filing on paper when you should have e-filed. The penalty is based on the number of slips of that type filed in the wrong format: $125 for 6 to 50 slips, $250 for 51 to 250, $500 for 251 to 500, $1,500 for 501 to 2,500, and $2,500 for 2,501 or more.
Not giving recipients their T4A slips. If you distribute slips late or not at all, the CRA says you may be assessed $25 per day per slip, with a minimum of $100 and a maximum of $2,500. This does not apply to T5018 slips, which you are not required to distribute.
What the subcontractor does with the slip
The slip does not change what the subcontractor owes. It gives the CRA a record to match against their return.
- No tax is usually withheld. For Canadian-resident contractors, the CRA says not to withhold CPP, EI, or income tax from fees for services, so the full amount shows as paid.
- Report the income either way. A self-employed subcontractor reports the income as business income on Form T2125, and the CRA's guide T4002 says you must report all your income. That is true whether they got a T4A, a T5018, or no slip at all. An incorporated subcontractor reports it on the corporation's return.
- Amounts may not match invoices exactly. A T5018 includes GST/HST and PST and is based on the date paid, while a T4A box 048 amount excludes sales tax. A subcontractor reconciling slips against their own books should expect those differences.
If you are the one receiving slips and are deciding whether to incorporate, our sole proprietorship vs corporation guide covers how business income is taxed under each structure.
Keeping the right records all year
Both slips are easier if you capture the contractor's details before the first payment: legal name, address, business number (or SIN for an unincorporated sub), residency, and whether you are paying for services, goods, or both. Record each payment by the date paid, split into the pre-tax amount and the tax. That split matters because the two slips handle GST/HST in opposite ways. Clear invoices help too; our guide to what a contractor invoice must include covers the GST/HST fields.
GetMarkup. GetMarkup, which is built by Methodical Studio, the publisher of NorthVetted, is quoting, invoicing, and compliance software for Canadian trades. Its Plus plan includes T5018 subcontractor tracking against the $500 threshold with a CSV export. It is not an accounting ledger, so you or your accountant still prepare and file the return. Because we publish it, weigh this mention accordingly.
Frequently asked questions
Do I issue a T4A or a T5018 to a subcontractor?
If more than 50% of your business income comes from construction and you paid a Canadian-resident subcontractor for construction services, use a T5018. If construction is not your primary source of business income, the CRA says to use a T4A, reporting the fees in box 048.
Do I need to issue both a T4A and a T5018 for the same payments?
No. Section 200(1) of the Income Tax Regulations says the T4A-type information return is not required for a payment that has already been reported under section 238, which is the T5018 rule. Report each payment on one slip.
Is GST/HST included on a T4A or T5018?
It depends on the slip. The CRA says not to include GST/HST or PST in T4A box 048. On a T5018, the $500 threshold is tested without GST/HST, but the amount in box 22 includes GST/HST and PST.
When are T4A and T5018 slips due?
T4A slips and the T4A Summary are due by the last day of February after the calendar year, and recipients must get their copies by the same date. A T5018 return is due six months after the end of your reporting period, so a calendar-year return is due June 30.
Do I need to give my subcontractor a copy of the slip?
For a T4A, yes: the CRA requires you to give recipients their slips by the last day of February. For a T5018, the CRA says you are not required to distribute the slips, though you may give the subcontractor a copy.
Do I issue a T4A to an incorporated contractor?
The CRA's box 048 instructions expect business recipients, including corporations, and tell you to enter the recipient's business number in box 013. The CRA has said since 2011 that it is not assessing penalties for failing to complete box 048, except for the trucking industry starting with the 2025 tax year, but the reporting requirement itself has not been removed.
Sources
- CRA: T5018 slip, Statement of contract payments (checked September 2026)
- CRA: T4A slip, Information for payers (checked September 2026)
- CRA: Filling out the T4A slip (checked September 2026)
- CRA: RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary (checked September 2026)
- CRA: Payments of fees for services (checked September 2026)
- CRA: Reporting fees for service (checked September 2026)
- CRA: Consultations on reporting fees for service (checked September 2026)
- CRA: When to file information returns (deadlines and late-filing penalties) (checked September 2026)
- CRA: How to file information returns (checked September 2026)
- CRA: Distribute the slips (checked September 2026)
- CRA: Penalty for failure to file information returns over the Internet (checked September 2026)
- CRA: Guide T4002, Chapter 1, General information (checked September 2026)
- Income Tax Regulations, section 200 (Justice Laws) (checked September 2026)
- Income Tax Regulations, section 205 (Justice Laws) (checked September 2026)
- Income Tax Regulations, section 238 (Justice Laws) (checked September 2026)
- Income Tax Act, section 153 (Justice Laws) (checked September 2026)