Does T5018 sound like something your accountant deals with at year-end?
Sometimes they file it. But the work behind it happens all year, in your books, every time you pay a sub.
Get that part right and the slips take minutes. Get it wrong and you’re digging through a year of payments in a panic.
What is a T5018 slip?
It’s CRA’s way of tracking what construction businesses pay their subcontractors.
The official name is the Statement of Contract Payments. Each slip shows one subcontractor and the total you paid them for construction services in the period. CRA uses the slips to line up what you paid with what your subs reported.
Every province is the same here, BC included. It’s a federal filing.
Who has to file T5018 slips?
You do if your business is mainly construction. CRA’s test is simple: you have to file if more than 50% of your business income comes from construction activities.
That goes for sole proprietors, partnerships, trusts and corporations alike.
Here’s a made-up example. Say 80% of your income comes from framing. You file.
Say you mostly sell building supplies and do the odd install. Then construction probably isn’t more than half your income, and you may not have to.
And “construction” is broad. CRA’s list includes things like electrical work, plumbing, roofing and shingling, excavating and grading, and plenty more. If you’re a general contractor or a trade on job sites, assume it applies to you until you’ve checked.
Which payments do you report?
Here’s what goes on the slips, according to CRA:
- Payments to Canadian subcontractors for construction services. That includes work they did inside or outside Canada.
- Only subs you paid more than $500 in the period, not counting GST.
And here’s what stays off:
- Payments for goods only. Buying materials from a supplier isn’t a T5018 payment.
- Payments to subcontractors who aren’t Canadian residents.
The tricky part is the mixed stuff. A sub who supplies and installs isn’t selling you goods only. A lumber yard delivery is.
Your books need to tell those apart all year, not in June.
Do cash payments count?
Yes. Paid a sub in cash for a weekend of work? It still counts.
CRA’s rules cover what you paid or credited to a subcontractor, whether that was by cheque, cash, barter or by offsetting it against something they owed you. How the money changed hands doesn’t change what you report.
This is exactly where contractors get caught. The cheques and e-transfers show up in the bank statements. The cash doesn’t.
So if you pay any sub in cash, write it down and get a receipt the same day.
When is the T5018 due?
Six months after the end of your reporting period.
You choose the period: the calendar year or your fiscal year. Amounts go on the slip for the year you actually paid them.
So if you report on the calendar year, everything you paid subs in 2026 is due by June 30, 2027. If your fiscal year ends March 31, 2027, that year’s slips are due by September 30, 2027.
Pick one and stick with it. Mixing periods is a great way to report the same payment twice.
What do you need from each subcontractor?
For each slip, CRA wants:
- The sub’s business number, or their SIN if they’re a sole proprietor without one
- Their business name
- Their address
- The total you paid them in the period
Here’s the thing. Getting a SIN from a sub you stopped working with eight months ago is painful. Getting it on day one is easy.
So ask for it when you hire them. While you’re at it, get their WorkSafeBC account number and pull a clearance letter. Same file, same conversation.
What happens if you file late?
CRA charges a penalty based on how many slips are late.
Under CRA’s current administrative policy, it works like this:
- 1 to 5 slips late: a flat $100
- 6 to 10 slips late: $5 a day, up to $500
- 11 to 50 slips late: $10 a day, up to $1,000
Bigger filers pay more. Full details are on CRA’s page on when to file information returns.
A hundred bucks won’t sink you. But it’s a hundred bucks for nothing, and a late T5018 usually means the books behind it are behind too.
What are the most common T5018 mistakes?
- Reporting suppliers. Buying materials isn’t a construction service. Leave goods-only payments off.
- Missing cash payments. If you paid it, it counts.
- Chasing SINs in June. Get them on day one.
- Mixing periods. Pick calendar year or fiscal year and stay with it.
- Forgetting the small subs. Three small jobs from the same sub can add up past $500 fast.
Sound familiar? None of these are hard to fix. They’re just hard to fix in a hurry.
How do you make T5018 slips easy?
Set your books up so the slips are a report, not a project.
- Set up every sub as a vendor with their business number or SIN, legal name and address from day one.
- Code every sub payment to that sub, not to a general “contract labour” pile.
- Keep goods and services apart. If a sub bills materials and labour on one invoice, record it the way it was billed.
- Check the list before year-end. Anyone over $500 for construction services goes on a slip.
Better yet, run that report every quarter. If a sub’s file is missing a business number in March, you’ve got months to get it, not days.
Do that, and at year-end you run one report and file.
Skip it, and you’re scrolling through twelve months of bank statements trying to remember who “J. Smith Contracting” was.
Want your T5018s handled?
Trades and construction is our specialty at MBC Canada. We record every sub payment to the right sub through the year, and we prepare your T5018 slips from those records, so year-end isn’t a scramble.
Our bookkeeping starts at $800 a month, and here’s what decides your number. See everything we do on our services page, or book a free 30-minute call.