T5018 (Statement of Contract Payments) Defined

The T5018, formally called the Statement of Contract Payments, is a CRA information return that construction businesses must file for every subcontractor paid more than $500 in a reporting period. Its purpose is to cross-reference subcontractor income across tax returns. If you are in the construction business and paid a sub in cash, by cheque, or by e-transfer, the method of payment does not matter. If the total crossed $500 (excluding GST/HST), you need a T5018 slip for that person or company.

Why it matters to Canadian contractors

The CRA uses T5018 data to identify unreported subcontractor income, which is one of the most common audit triggers in the construction sector.
Missing a T5018 slip carries a penalty of $25 per day per slip, minimum $100, up to $2,500 per slip. If you paid six subcontractors and missed all of them, maximum exposure is $15,000.
Construction is one of the highest-audit industries in Canada. The T5018 is a core part of CRA enforcement in that sector, not a rarely-enforced technicality.
If the CRA audits one of your subcontractors and finds unreported income that you paid but never reported on a T5018, you can face gross-negligence penalties on top of the late-filing penalty.

Common mistakes and pitfalls

Threshold is per person per year, not per job. Paying someone $200 on three different jobs totals $600 and triggers a slip even though no single payment crossed $500.
The reported amount on the slip (Box 22) includes GST/HST, even though the $500 threshold is measured without it. Many contractors report the net amount and are later reassessed.
Non-residents go on a T4A-NR, not a T5018. Using the wrong form still leaves you exposed to the failure-to-file penalty on the correct form.
The T5018 deadline is 6 months after your fiscal year end, not the end of February like T4 slips. Calendar-year sole proprietors must file by June 30.
Electronic filing is mandatory if you have 6 or more slips. Paper is only accepted for 5 or fewer.

This glossary entry is for general information only and does not constitute legal or tax advice. Canadian tax and construction law rules vary by province and contract. For advice specific to your situation, consult a licensed professional.

Why it matters to Canadian contractors

The CRA uses T5018 data to identify unreported subcontractor income, which is one of the most common audit triggers in the construction sector.

Missing a T5018 slip carries a penalty of $25 per day per slip, minimum $100, up to $2,500 per slip. If you paid six subcontractors and missed all of them, maximum exposure is $15,000.

Construction is one of the highest-audit industries in Canada. The T5018 is a core part of CRA enforcement in that sector, not a rarely-enforced technicality.

If the CRA audits one of your subcontractors and finds unreported income that you paid but never reported on a T5018, you can face gross-negligence penalties on top of the late-filing penalty.

Common mistakes and pitfalls

Threshold is per person per year, not per job. Paying someone $200 on three different jobs totals $600 and triggers a slip even though no single payment crossed $500.

The reported amount on the slip (Box 22) includes GST/HST, even though the $500 threshold is measured without it. Many contractors report the net amount and are later reassessed.

Non-residents go on a T4A-NR, not a T5018. Using the wrong form still leaves you exposed to the failure-to-file penalty on the correct form.

The T5018 deadline is 6 months after your fiscal year end, not the end of February like T4 slips. Calendar-year sole proprietors must file by June 30.

Electronic filing is mandatory if you have 6 or more slips. Paper is only accepted for 5 or fewer.

T5018 (Statement of Contract Payments) Defined

Why it matters to Canadian contractors

Common mistakes and pitfalls

Related

T5018 (Statement of Contract Payments) Defined

Why it matters to Canadian contractors

Common mistakes and pitfalls

Related