Who this guide is for
You run a construction business in Canada (general contracting, electrical, plumbing, roofing, drywall, HVAC, or similar), you pay subcontractors, and you want to know whether you owe the CRA a T5018 return and how to get it done without a scramble. This guide covers who must file, what counts, the deadlines, how to file, the penalties, and a simple system for tracking it all year.
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. Your structure (multiple business lines, related companies, non-resident subcontractors) can change the answer, so confirm your situation with an accountant.
What is a T5018 slip?
A T5018 is an information slip that reports the total you paid a subcontractor for construction services during your reporting period. It is part of the CRA's Contract Payment Reporting System, which exists to promote compliance in the construction industry and reduce underground economy activity.
You do not pay tax with a T5018. You are telling the CRA how much you paid each subcontractor, so the CRA can compare that with the income those subcontractors report. The filing has two parts:
- T5018 slips: one per subcontractor you are required to report, showing their name, address, identification number, and the amount paid.
- T5018 Summary (T5018SUM): one form that totals every slip you filed for that account: the number of slips (line 80) and the total of all box 22 amounts (line 82), plus a contact person and a signed certification.
If you do not fill out actual T5018 slips, the CRA accepts a line-by-line listing or printout of all your subcontractor payments, in column format with the same information the slip requires, along with summary totals signed by an authorized person.
Do you have to file? The 50% construction test
You must file if more than 50% of your business income comes from construction activities and you pay Canadian-resident subcontractors for construction services. The CRA's wording: if more than 50% of a business's income-earning activities are construction, its primary source of business income is considered to be construction.
That test applies to individuals, partnerships, trusts, and corporations alike. A sole proprietor electrician is in the same position as an incorporated general contractor.
If construction is a real part of your business but not the primary source of income (for example, a supply store that also installs), you are not required to file T5018 slips. The CRA says it will accept them voluntarily. Payments to self-employed people in that situation may belong on a different slip, such as a T4A, so check with your accountant.
What counts as construction activities
The Income Tax Regulations (section 238) define construction activities broadly: the erection, excavation, installation, alteration, modification, repair, improvement, demolition, destruction, dismantling, or removal of all or any part of a building, structure, surface or sub-surface construction, or similar property.
The CRA's examples include air conditioning work, asphalt paving, carpet work, commercial refrigeration, concrete pouring and finishing, demolition, heating, drywalling, duct and sheet metal work, electrical work, excavating, fencing, gas piping, glazing, flooring, insulation, masonry, painting, plumbing, roofing, shingling, and water well drilling. The CRA specifically lists planes, satellites, and ships as not construction.
Repair and renovation are included, not just new builds. A renovation contractor who subs out the electrical and plumbing is squarely in scope.
Which payments do you report?
You report payments to resident subcontractors for construction services, whether you paid by cheque, cash, barter, or an offset against an amount they owed you. You do not report payments for goods only.
That goods-only rule matters for trades. A payment to a lumber yard or electrical wholesaler for materials is not a T5018 payment. A payment to a subcontractor who supplies and installs (materials plus labour) includes a construction service, so it is reportable.
Amounts go on the slip for the period in which you actually paid them, not when the work was done or invoiced. A job finished in December 2026 but paid in January 2027 lands in your 2027 calendar reporting period (or whichever fiscal period includes that January payment).
The $500 threshold and how GST/HST affects it
Under the CRA's administrative policy, you must issue a slip (or include the subcontractor on your printout) if the total of all payments to that subcontractor in the reporting period was more than $500, not including GST/HST.
The key point is that the threshold and the reported amount are calculated differently:
| Question | Include GST/HST? |
|---|---|
| Is this subcontractor over the $500 threshold? | No, test the amount before GST/HST |
| What goes in box 22 of the slip? | Yes, include GST/HST and PST where applicable |
So a subcontractor you paid $480 plus 13% HST ($542.40 total) in Ontario is under the threshold, because the pre-tax total is $480. A subcontractor you paid $2,000 plus HST gets a slip showing $2,260.00, because box 22 includes the tax. The CRA wants amounts in dollars and cents, in Canadian dollars. If you paid in another currency, convert using the Bank of Canada exchange rate.
Because the test is per subcontractor for the whole period, many small payments add up. Five $150 service calls from the same sub put them over $500 even though no single payment came close.
Calendar year or fiscal year: choosing your reporting period
You can report on a calendar-year basis (January to December) or a fiscal-period basis that matches your business year end. Once you choose, the period stays fixed: section 238(3) of the Income Tax Regulations says the period cannot be changed for subsequent years unless the Minister (in practice, the CRA) authorizes it.
Which to choose is mostly about workload. Calendar-year reporting lines up with T4 and T4A season, and a lot of software defaults to it. Fiscal-year reporting lines up with the books your accountant already closes at year end. If your fiscal year already ends December 31, the question answers itself.
Whatever you pick, enter the last day of that reporting period in box 20 of every slip and on the "period ending" line of the summary. Because changing later requires the CRA's permission, decide deliberately the first time you file, ideally with your accountant.
When is the T5018 due?
The T5018 return (slips plus summary) is due six months after the end of the reporting period you chose. That rule comes straight from section 238(4) of the Income Tax Regulations.
| Reporting period ends | T5018 due |
|---|---|
| December 31, 2026 (calendar year) | June 30, 2027 |
| March 31, 2027 (fiscal year) | September 30, 2027 |
| June 30, 2027 (fiscal year) | December 31, 2027 |
If a due date falls on a Saturday, Sunday, or a public holiday recognized by the CRA, your return is on time if the CRA receives it, or it is postmarked, by the next business day.
Unlike T4 and T4A slips, there is no February deadline to hand slips to recipients. The CRA says you are not required to distribute T5018 slips, though you may give subcontractors a copy. If you do, leave your own 15-character account number off their copy; it belongs only on your copy and the CRA's.
How to file: electronic vs paper
If you have more than 5 T5018 slips for a calendar year, you must file electronically. That threshold has applied to returns filed on or after January 1, 2024, and it applies to each type of information return separately.
The CRA's electronic options for T5018 are:
- Web Forms: the CRA's free online form, where you enter slips one by one and submit. T5018 is included in the supported returns. You sign in with your 15-character account number and a Web access code (WAC).
- Internet file transfer: you upload an XML file generated by accounting or payroll software. This is how software that prepares T5018 slips usually submits them.
The T5018 is filed under your information-return account, which the CRA shows in the format 123456789RZ0001. If you are not sure you have the right program account, sort that out well before the deadline.
With 5 or fewer slips, paper filing is still allowed, but electronic filing works for small filers too.
What happens if you file late or on paper?
Late T5018 returns are penalized per slip, and filing more than 5 slips on paper carries a separate penalty. T5018 is one of the returns covered by the CRA's relieving administrative policy, which reduces the late-filing penalty for smaller filers:
| T5018 slips filed late | Penalty per day (up to 100 days) | Maximum |
|---|---|---|
| 1 to 5 | Flat penalty, not per day | $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 |
The penalty for not filing electronically when you are required to is assessed per type of return, based on the number of slips 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.
So a contractor with 12 subcontractors who mails a paper return a month late could face both a late-filing penalty and a $125 format penalty. Both are avoidable with a calendar reminder and Web Forms.
What information to collect from subcontractors
For each slip you need the subcontractor's name, address, and one identification number: either their 15-character program account number (for example, 123456789RT0001) or their SIN. You also need the total you paid them in the period.
The easiest time to get this is before you pay the first invoice. Asking a sub for their SIN or business number in May, when they are waiting on money, is easy. Chasing it the following June, after the job is over, is not.
A practical onboarding checklist for every new subcontractor:
- Legal name and operating name, exactly as registered.
- Mailing address for the slip.
- Business number with program account (their GST/HST number, such as 123456789RT0001) or, for an unincorporated sub without one, their SIN. Store SINs securely and limit who can see them.
- GST/HST registration status. The CRA's GST/HST registry lets you confirm a supplier's GST/HST account number, which is also worth doing before you claim input tax credits on their invoices. Our GST/HST registration guide explains the numbers.
- Residency. Confirm they are a Canadian resident, since non-residents go on a different slip.
- A note on what they supply. Labour, supply and install, or materials only. This tells you whether their payments are reportable at all.
A simple year-round tracking workflow
The goal is to never rebuild a year of payments from bank statements in June. Tag every subcontractor payment as you make it, and the return becomes a report you run rather than a project.
- Set up a subcontractor list with the onboarding details above and a yes/no flag for "T5018 reportable".
- Record every payment on the day you pay it, with the date paid, pre-tax amount, GST/HST, PST, and total. Record by payment date, not invoice date.
- Check running totals quarterly so you know who is over $500 (pre-tax) and whose details are still missing.
- At period end, filter to reportable subs over the threshold, total the tax-included amounts for box 22, and fill out the slips and summary.
- File electronically if you have more than 5 slips, and keep a copy of what you filed with your year-end records.
If you also keep a holdback on subcontracts, track holdback releases the same way, since the release is a payment in the period you actually pay it. Our guide to Ontario construction holdback and prompt payment covers the holdback side.
Tools for tracking T5018 payments
You can handle T5018 with a spreadsheet, with accounting software that has a T5018 feature, or with trades-specific software. The right choice depends on how many subs you pay and what you already use for your books.
Spreadsheet. For a handful of subcontractors, one sheet with a row per payment (date, subcontractor, pre-tax amount, tax, total) and a pivot table by subcontractor is enough. It costs nothing. It depends on you entering every payment, and it does not generate the XML file, so you would key slips into the CRA's Web Forms yourself.
QuickBooks Online. Intuit documents a T5018 feature for QuickBooks Online Canada. You flag suppliers as tracked for T5018 and record their business number or SIN, run T5018 Detail and T5018 Contractor Info reports, and use a T5018 Form Preparation Wizard that produces slips and an XML file for electronic filing. If your bookkeeping already lives in QuickBooks, this is the natural route. It is a full accounting system, so it is more to set up than a spreadsheet if you are not already using it. Our accounting software review compares plans.
Other accounting software. We only list tools here with documented T5018 support. We could not find a documented T5018 slip feature in Xero's Canadian help content, so if you use Xero, confirm with Xero or your bookkeeper how they handle it (typically by exporting subcontractor payment totals and filing through Web Forms).
GetMarkup. GetMarkup, which is built by Methodical Studio, the publisher of NorthVetted, is quoting, invoicing, and compliance software for Canadian trades. Its Plus plan (CAD $89/month) includes T5018 subcontractor tracking against the $500 threshold with a CSV export, and new accounts get a 28-day trial of Plus with no credit card required. The Free and Solo plans do not include T5018 tracking. It is not an accounting ledger, so you or your accountant still prepare and file the return from the export. Because we publish it, weigh this mention accordingly.
T5018 checklist
- Confirm construction is more than 50% of your business income.
- Choose calendar or fiscal reporting once, knowing you need CRA authorization to change it.
- Collect name, address, and BN/program account or SIN from every sub before the first payment.
- Record payments by date paid, split into pre-tax amount and tax.
- Test the $500 threshold on pre-tax amounts; report tax-included amounts in box 22.
- Leave out goods-only payments and non-resident subcontractors.
- File slips and summary within six months of period end, electronically if more than 5 slips.
Frequently asked questions
Who has to file T5018 slips?
Any individual, partnership, trust, or corporation whose business income is more than 50% from construction activities and who pays Canadian-resident subcontractors for construction services. If construction is not your primary source of business income, you do not have to file, though the CRA accepts voluntary T5018 filings.
What is the T5018 threshold?
Under CRA administrative policy, you issue a slip (or report the subcontractor on a printout) when the total paid to that subcontractor in the reporting period is more than $500, not including GST/HST. Once a subcontractor is over the threshold, the amount you report in box 22 includes GST/HST and PST.
When is the T5018 due?
Six months after the end of your reporting period. If you report on a calendar year, payments made in 2026 are due by June 30, 2027. If you report on a fiscal year ending March 31, the return is due by September 30.
Do I have to give my subcontractors a copy of their T5018 slip?
No. The CRA says you are not required to distribute T5018 slips, although you may give recipients a copy. If you do, leave your own account number off their copy.
Do I report payments for materials only?
No. Payments made for goods only are not reported on a T5018. Payments to non-resident subcontractors are not reported on a T5018 either.
Can I switch my T5018 reporting period from calendar year to fiscal year?
Not on your own. Section 238(3) of the Income Tax Regulations says that once you choose a reporting period, it cannot be changed for later years unless the CRA (the Minister) authorizes it.
Sources
- CRA: T5018 slip, Statement of contract payments (checked September 2026)
- CRA: T5018 summary, Statement of contract payments (checked September 2026)
- CRA: T5018 Statement of Contract Payments (form) (checked September 2026)
- Income Tax Regulations, section 238 (Justice Laws) (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: Penalty for failure to file information returns over the Internet (checked September 2026)
- CRA: Distribute the slips (checked September 2026)
- CRA: Filing information returns with Web Forms (checked September 2026)
- Intuit: Using T4A and T5018 forms in QuickBooks Online (checked September 2026)
- GetMarkup pricing (checked September 2026)