T5018 checklist: reporting payments to subcontractors

Decide whether you have to file

The T5018 is a slip that reports what a construction business paid its subcontractors. It applies only when all three of the CRA’s conditions are met. Construction must be your primary source of business income, meaning more than 50% of your income-earning activities. The payments must be to subcontractors who are residents of Canada. And the total paid to one subcontractor in the year must be more than $500, not counting GST/HST.

If construction is only a side activity of your business, you are generally not required to file, although the CRA will accept a T5018 if you send one. Payments to non-residents are reported on a T4A-NR instead. Whether a worker is a subcontractor or an employee is a separate question, which we cover in our article on contractor misclassification risks. If someone works for you as an employee and also does separate subcontract work, the employment income goes on a T4 and only the subcontract work goes on a T5018.

The CRA’s list of construction activities is broad. It includes electrical work, plumbing, roofing, drywalling, painting, excavating, fencing, concrete work and swimming pool installation. If most of your work looks like that list, assume the rules apply and test them with your numbers rather than guessing.

List who you paid and what for

Start from your ledger, not from memory. Pull every payment to each subcontractor for the reporting period and include amounts paid by cheque, cash, barter or by offset against something the subcontractor owed you. Barter is reported at fair market value.

Report only the people you contracted with directly. If a cheque is made out to a subcontractor and its sub-trade together, you report the full amount against the subcontractor you hired. The subcontractor reports its own payment to the sub-trade. Payments for goods only are not reported, and heavy equipment rented without an operator is rental, not construction.

Collect the details before you fill in the slip

Each slip needs the subcontractor’s business name and address and either its 15-character GST/HST account number or a social insurance number. Ask for this when you hire the subcontractor, not at filing time, and keep it with the contract. The CRA lets you confirm a GST/HST account number online.

Pick your reporting period too. You can choose a calendar year or a fiscal period, and that choice sets your due date. Slips cover amounts paid in the period, not amounts invoiced. If you pay from more than one payroll account, you file a separate return for each.

Complete the slips and the summary

On each T5018, box 20 is the last day of your reporting period and box 22 is the total paid to that subcontractor. Box 22 includes GST/HST and any PST, even though the $500 test excludes GST/HST. Show amounts in Canadian dollars, leave empty boxes blank, and do not use dollar signs or dashes.

The T5018 Summary carries the number of slips on line 80 and the total of all box 22 amounts on line 82. Those totals have to agree with your slips, and an authorized person signs it. A summary sent without its slips is treated as not received. If you do not use the slip format, the CRA accepts a signed listing with the same information. Do not put your own account number on any copy you give to a subcontractor.

File on time and by the right method

The due date is six months after the end of your reporting period. For a calendar 2026 period, that is June 30, 2027. If the due date falls on a weekend or holiday, the next business day counts. If you stop operating, the filing date moves up to 30 days after that date.

You must file electronically if you have more than five T5018 slips for the year. Web Forms handles up to 100 slips at a time, and larger files can go in by internet file transfer from software. You are not required to give a T5018 copy to the subcontractor, though you may. Late filing can bring a penalty, with a flat $100 for one to five late slips under the CRA’s relieving policy and more as the number of slips grows.

Fix errors and keep the file

If you find a mistake after filing, do not enter a negative amount on a new slip. Follow the CRA’s correction process instead. Keep your contracts, invoices, proof of payment and the account number check with a copy of what you filed, so you can answer questions later. A short folder per subcontractor, with the signed agreement, account number confirmation and payment history, makes the next year’s filing much faster.

Ask your accountant to compare box 22 totals with your ledger and your GST/HST returns before you file. Differences are easier to explain before the CRA asks about them.