The T5018, Statement of Contract Payments, is a construction-specific CRA information return. If most of your income comes from construction and you pay subcontractors for construction services, you must report what you paid them on a T5018 slip. The threshold is $500 to a single subcontractor over the reporting period. It exists to cut the cash economy in the trades by letting the CRA cross-check that subs declare what they were paid. Filing it is not optional, and the late-filing penalty is $25 per day per slip.
Who must file
All three of these must be true:
- More than 50% of your business income comes from construction activities. The CRA uses NAICS Group 23 (construction) as the reference. A pure-construction GC clearly qualifies; a business only partly in construction may not.
- You paid one or more Canadian-resident subcontractors for construction services during the period.
- Total payments to that single subcontractor reached $500 or more in the reporting period.
The obligation applies whether you are an individual, a partnership, a corporation or a trust, and even if you are below the $30,000 GST/HST registration threshold. Being a small operator does not exempt you.
The $500 threshold, per sub, per period
The $500 test is per subcontractor and per reporting period, not per invoice and not across all subs combined. If you paid one sub $450 all year, no slip is needed for them. If you paid another sub $480 on one job and $300 on another in the same period, that is $780 to one sub, over the threshold, so a slip is required. A point worth flagging honestly: the CRA's own wording on whether the $500 test counts GST/HST is not perfectly clear. The reported amount on the slip generally includes the full payment, but whether the $500 trigger itself is measured before or after tax is a detail to confirm with the CRA or your accountant if a sub sits right on the line.
What counts as construction
The CRA's reference is NAICS Group 23, which covers the full range of trades: electrical, plumbing, HVAC, roofing, framing, drywall, concrete, masonry, excavating, painting, flooring, structural steel, sprinkler systems, heavy equipment supplied with an operator, and demolition. Payments for pure materials, or for equipment rental without an operator, are excluded; labour and labour-inclusive amounts are included. So a dry rental of a digger is out, but the same digger supplied with an operator is in.
What to put on the slip
- Use the subcontractor's Business Number (BN) if they have one.
- If the sub is a self-employed individual with no BN, use their Social Insurance Number (SIN).
- Report the total contract payments for the period.
Reporting period and deadline
You elect to report on either a calendar-year or a fiscal-year basis. The T5018 Summary and all the slips are due six months after the chosen year-end. A calendar-year filer therefore files by 30 June of the following year. Pick a basis and be consistent.
Filing method
For the 2025 tax year onward, the threshold for mandatory online filing was lowered, so more filers must file electronically. The old allowance to paper-file fewer than 50 slips has been tightened. If you have more than a handful of slips, plan to file online.
Penalties
Failure to file, or late filing, costs $25 per day per slip, with a minimum and a maximum of $2,500 per slip. On top of the direct penalty, a T5018 filing can trigger the CRA to audit the reported subcontractors' own returns, which is exactly the policy intent. Filing on time and accurately is far cheaper than the alternative.
Worked example
A framing contractor earns nearly all of its income from construction, so it meets the over-50% test. During the calendar year it pays three subs: a labourer $450, an electrician $6,000, and a drywaller $1,800. The labourer is under $500, so no slip. The electrician and the drywaller are each over $500, so each gets a T5018 slip, and both go on the T5018 Summary, filed by 30 June the following year. Miss that date by 20 days and the penalty is $25 a day times two slips, $1,000, before any audit fallout.
Common mistakes
- Thinking the $30,000 GST/HST floor exempts you. It does not; the T5018 obligation is separate and applies below that revenue.
- Counting per invoice instead of per sub per period. Several sub-$500 payments to the same sub can add up past the threshold.
- Issuing a T4 to a sub. Construction subs get a T5018, not a T4; a T4 is for employees.
- Including dry equipment rental. Materials and operator-free rentals are excluded; only labour and labour-inclusive amounts count.
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