To file CRA Form T5018, the Statement of Contract Payments, complete one slip for each Canadian-resident subcontractor you paid more than $500 for construction services during your reporting period, total those amounts on the T5018 Summary, and submit the return to the CRA within six months of your reporting period’s end. Since January 2024, almost every filer must submit electronically.
Confirm You Have to File
The T5018 obligation comes from section 238 of the Income Tax Regulations and catches you when three things are true at once: more than 50 percent of your business income for the reporting period comes from construction; you paid a Canadian-resident subcontractor for construction services (performed in Canada or abroad); and your combined payments to that subcontractor exceeded $500, excluding GST/HST.1Justice Laws Website. Income Tax Regulations CRC c 945 – Section 238
Construction is defined broadly. It covers erection, excavation, installation, alteration, repair, improvement, demolition, or removal of any part of a building, structure, or surface or sub-surface construction. Roofing, plumbing, electrical, site grading, and demolition are all in. Property developers and managers whose construction spending pushes them over the income threshold are caught too. Business structure does not matter: sole proprietorships, partnerships, trusts, and corporations file on the same basis.
One boundary worth stating clearly. A homeowner who hires a contractor to renovate a personal residence does not file a T5018, because the payment is not a business expense.2Canada Revenue Agency. T5018 Slip – Statement of Contract Payments
Which Subcontractors Get a Slip
You only prepare a slip for a subcontractor whose payments totalled more than $500 in the reporting period, calculated without GST/HST.2Canada Revenue Agency. T5018 Slip – Statement of Contract Payments At or below $500, no slip.
Mixed invoices with both goods and labour count only if the service portion in the reporting period is $500 or more. Payments purely for goods, such as a lumber delivery or equipment purchase with no attached labour, are excluded entirely; the regulation exempts amounts paid for goods the payer sells or leases.1Justice Laws Website. Income Tax Regulations CRC c 945 – Section 238
What Goes on the Slip
For every subcontractor over the threshold, you need their legal name, business number (or Social Insurance Number for individuals), and full mailing address. Collect these details when the working relationship begins so you are not chasing paperwork at filing time.
Box 22 — Total Contract Payments
Box 22 is the heart of the slip. Enter the total amount paid to that subcontractor during the reporting period, and include GST/HST and any applicable provincial sales tax in that figure.2Canada Revenue Agency. T5018 Slip – Statement of Contract Payments This is where filers often get tripped up: the $500 eligibility test is calculated without tax, but the Box 22 amount includes it.
Report payments made by any method, including cheque, cash, barter, or offset against an amount you were owed. For barter, use the fair market value of the goods or services exchanged.
The T5018 Summary
Once every slip is done, prepare the T5018 Summary (T5018SUM). Line 82 carries the total of all Box 22 amounts across every slip in the return. The summary also captures the total number of slips and your business identification.3Canada Revenue Agency. T5018 Summary – Statement of Contract Payments
Pick a Reporting Period and Note the Deadline
You can report on either the calendar year (January through December) or your business’s fiscal year. Choose whichever aligns better with your other financial cycles, but choose carefully: switching later requires the Minister’s authorization.1Justice Laws Website. Income Tax Regulations CRC c 945 – Section 238
The return is due six months after the end of your reporting period.4Canada Revenue Agency. When to File Information Returns A calendar-year filer with a December 31 year-end files by June 30. A business with a March 31 fiscal year-end files by September 30.
How to Submit
Since January 2024, anyone filing six or more information returns in a calendar year must file electronically. Paper is realistic only for very small operations, five slips or fewer.
Two main electronic channels handle the T5018. Internet File Transfer accepts an XML file, which works well when your accounting software generates T5018 data. The CRA’s Web Forms application is built for manual entry: sign in with your business account number and web access code, enter your filer information, create slips one at a time, review the auto-calculated summary, and submit. Web Forms then displays a confirmation page. Save or print it as your proof of filing.5Canada Revenue Agency. File Information Returns Electronically – Web Forms You can also file through My Business Account or Represent a Client.
If you qualify to file on paper, mail the slips and summary to the CRA tax centre for your province, listed on the form instructions and the CRA’s Tax Centres page. Keep a copy of everything.
Fixing a Filed Return
If you spot a mistake after filing, you can amend, cancel, or add a slip. On paper, write “AMENDED,” “CANCELLED,” or “ADDITIONAL” at the top of the slip, complete every box (not just the changed ones), and mail one copy to the CRA’s national verification and collection centre with a letter explaining the change. Send two copies to the subcontractor.6Canada Revenue Agency. Amend, Cancel, Add, or Replace Slips and Summaries Do not amend the summary itself; the CRA recalculates it once the corrected slip is processed.
You should not file an amendment when:
- The only change is the subcontractor’s address.
- The CRA has not yet processed your original return.
- You have not actually sent the slips in yet; just correct them before filing.
To cancel an entire return rather than individual slips, send the request to your tax centre by mail or fax, attention “Employer Services.”
Penalties for Late or Paper Filing
Late filing carries a graduated penalty under section 162(7.01) of the Income Tax Act. The daily rate scales with the number of slips, running for up to 100 days, with a $100 floor. For fewer than 51 slips it is $10 per day (maximum $1,000); 51 to 500 slips, $15 per day ($1,500); 501 to 2,500 slips, $25 per day ($2,500); 2,501 to 10,000 slips, $50 per day ($5,000); more than 10,000 slips, $75 per day ($7,500).7Justice Laws Website. Income Tax Act RSC 1985 c 1 5th Supp – Section 162
Filing on paper when electronic filing was required is a separate penalty: a flat $125 for 6 to 50 slips, and more above that.8Canada Revenue Agency. File Information Returns Electronically (Tax Slips and Summaries)
Records to Keep
Hold onto your filed slips, the summary, submission confirmations, subcontractor invoices, proof of payment, and contracts for at least six years from the end of the tax year they relate to.9Canada Revenue Agency. Where to Keep Your Records, for How Long and How to Request the Permission to Destroy Them Early If the CRA reviews the return during that window, clean documentation is what closes the file quickly.