T5018 Slips in Canada: How Contractors Report Subcontractor Payments
- Targeted Accounting
- Bookkeeping
Table of Contents
What Is a T5018 Slip?
If your business is mainly in construction and you pay subcontractors, the CRA expects you to report those payments every year on a T5018 Statement of Contract Payments. The slips let the CRA match what you paid against what each subcontractor reported as income, which is exactly why they matter: they are one of the main ways the CRA finds unreported construction income.
Most contractors only think about the T5018 when the deadline is close and they are digging through a year of supplier payments. This guide covers who has to file, which payments count, the deadline and how to set up your bookkeeping so the slips take minutes rather than days. It is part of our guide to construction bookkeeping in Canada.
Who Has to File T5018 Slips
The rule applies to individuals, partnerships, trusts and corporations whose primary source of business income is construction. The CRA treats construction as your primary source when more than 50% of your business income comes from construction activities.
Construction activities are broad. They include erecting, installing, altering, modifying, repairing, improving, demolishing, dismantling or removing any structure or part of one, from houses and commercial buildings to roads, bridges, dams and pipelines. General contractors, renovators, electricians, plumbers, HVAC companies, roofers, landscapers who build structures and site-preparation outfits are all commonly caught.
If you meet the test, you file for payments you make to Canadian-resident subcontractors for construction services, whether the work was done inside or outside Canada. The details are on the CRA’s T5018 slip page.
Which Payments Go on a T5018
Report the total you paid each subcontractor for construction services in the reporting period, as long as that total is more than $500. For the threshold you leave out GST/HST, but the amount you put on the slip in box 22 includes GST/HST and PST.
| Payment | Report on a T5018? |
|---|---|
| Framing subcontractor paid $18,000 plus HST | Yes, $20,340 including HST |
| Electrician who supplied labour and materials | Yes, the full amount |
| Lumber yard, for materials only | No, goods only |
| Your own employees | No, they get T4s |
| Subcontractor paid $450 in total for the year | No, under the threshold |
A slip is required whether the subcontractor is a sole proprietor, a partnership or a corporation. You report payments in the period you paid them, not when the work was invoiced.
T5018 Reporting Period and Deadline
You can report on a calendar-year basis or on your business’s fiscal period. Many contractors with a non-December year end choose the fiscal period so the slips line up with the year-end books.
The return, made up of the T5018 slips and the T5018 Summary, is due six months after the end of the reporting period. Using the calendar year, payments made in 2026 are due by 30 June 2027. With a 31 March fiscal year end, the slips are due by 30 September.
Put the date on the same calendar as your other filings. Our Canadian business tax filing calendar shows where it sits alongside your T2, GST/HST and payroll deadlines.
How to File T5018 Slips
You file the slips and the summary with the CRA, and you can also give each subcontractor a copy, which helps them reconcile their own income. Online filing through the CRA’s web forms or a payroll or accounting program is the norm, and electronic filing is mandatory if you file more than five slips.
Each slip needs the subcontractor’s name and address and their business number, or their social insurance number if they are an individual without one. Missing identification numbers are the most common reason the job drags on, so ask for them up front.
Late or missing slips attract penalties based on how many slips are involved and how late they are. A CRA review of a contractor who never filed T5018s also tends to widen into questions about whether those subcontractors were really employees.
Set Up Your Books So the Slips Write Themselves
The work is in the bookkeeping, not the form. A few habits make year end painless:
- Onboard every subcontractor properly. Get their legal name, address, business number and GST/HST number before the first payment, and store them on the supplier record.
- Flag subcontractors in your software. QuickBooks Online and Xero both let you mark suppliers or tag their bills so you can run a payments report for exactly that group.
- Code labour and materials separately on bills, so materials-only suppliers never end up on a slip and mixed bills are reported in full.
- Pay through the books. Cash and e-transfer payments that never get recorded are what makes a T5018 report wrong.
Our guide to accounting software for small business in Canada covers how to set this up. Getting the subcontractor’s GST/HST number also protects your input tax credits, which our GST/HST guide explains.
Want Your T5018s Done for You?
We keep construction clients’ supplier records, sales tax and subcontractor reports in order all year, so the T5018 is a quick review rather than a scramble. See our bookkeeping services or get in touch.
