The short version
A T5018 is the slip a construction business files with the CRA to report what it paid each subcontractor in a year. It exists, in the CRA's own words, to promote compliance in the construction industry and reduce the underground economy: it lets the CRA match what a GC says it paid against what the sub reports as income.
| Who files | A business whose income is more than 50% from construction, that paid Canadian-resident subcontractors for construction services |
| Who gets a slip | Each subcontractor paid more than $500 in the period, not counting GST/HST |
| Amount on the slip | The total paid, including GST/HST and PST |
| Period | Calendar year or fiscal period, the payer's choice |
| Due | 6 months after the end of that period. June 30 for a calendar year |
| Filing | Electronically if you file more than 5 slips |
Do you have to file?
You must issue T5018 slips, or send the CRA a listing with the same information, if all three of these are true:
- More than 50% of your business income comes from construction.
- You paid Canadian-resident subcontractors for construction services, performed inside or outside Canada.
- Your total payments to a subcontractor in the year were more than $500, before GST/HST.
The 50% test is about your primary business, not how much construction you buy. The CRA's example is a natural gas company that builds a lot of pipeline: its business is gas transmission, so it does not have to report.
Most GCs meet the test, and so does a trade that hires its own subs. A drywall company that hires a taping crew is a construction business paying a construction subcontractor, and files a T5018 for that crew.
What counts as construction
The CRA uses the construction sector of NAICS, code 23. Its examples include concrete pouring and finishing, rough and framing carpentry, duct and sheet metal work, structural steel erection, flooring installation, roofing, elevator work and commercial refrigeration that is part of the building.
Two edge cases the CRA spells out:
- Equipment rental with an operator is construction. Without an operator it is just a rental, and not reported.
- Payments for goods only are not reported. Material bought from a supplier is not a contract payment.
What goes on the slip
| Box | What to enter |
|---|---|
| 20 | The last day of your reporting period |
| 22 | Total paid to that subcontractor in the period, including GST/HST and PST |
| 24 | The sub's 15-character business number (for example 123456789RT0001), or their SIN if they have none |
| Name and address | The business or person you paid |
Report amounts in the year they were paid, not invoiced, in Canadian dollars. Payments by barter are reported at the fair market value of what was traded. You can check a sub's GST/HST number with the CRA's GST/HST registry before you file.
Joint cheques
GCs sometimes write one cheque to a sub and its sub-trade together, to keep liens off the job. The CRA's rule: report only the companies you contract with directly. If ABC General Contractor pays XYZ Drywall and MNOP Plastering jointly for work MNOP did under XYZ, ABC reports the payment to XYZ, and XYZ reports it to MNOP.
A sub who is also your employee
If someone works for you as an employee and also does separate subcontract work, the wages go on a T4 and the subcontract payments go on a T5018. Whether someone is an employee or a subcontractor in the first place is a separate question, decided on the working relationship, not on what the paperwork calls it.
Deadlines and penalties
The return is due 6 months after the end of the reporting period you chose. For a calendar year that is June 30. If the date falls on a weekend or holiday, the next business day counts.
Since January 2024, anyone filing more than 5 slips for a calendar year must file electronically. Some guides online still say 50: that was the old rule.
For T5018, the CRA applies a reduced penalty schedule meant to be fair to small businesses:
| Slips filed late | Penalty |
|---|---|
| 1 to 5 | $100 flat |
| 6 to 10 | $5 a day, up to $500 |
| 11 to 50 | $10 a day, up to $1,000 |
| 51 to 500 | $15 a day, up to $1,500 |
A contractor who arranges with subs to hide payments faces something different: the CRA notes criminal prosecution and penalties of up to 200% of the tax avoided.
If you are the subcontractor
You do not file a T5018 for the money you receive. The GC does, and that return goes to the CRA, which can compare it with the income you report. Keep your invoices and deposit records. If a slip a GC gives you looks wrong, ask them to correct it with the CRA; the CRA has a process for amending slips after filing.
If you hire your own subs and construction is your main business, you are a payer too, and the same rules apply to you.
Where to file
The CRA accepts T5018 returns through its Web Forms application or as an XML upload. The form and the full rules are on the CRA's T5018 page.
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