T5018 slips for contractors: who files, when, and the penalties

A T5018 slip, the Statement of Contract Payments, must be filed by any business whose primary income (more than 50%) comes from construction activities and that paid a Canadian-resident subcontractor more than $500 in the reporting period. The slips and the T5018 Summary are due six months after the end of the reporting period you choose, either the calendar year or your fiscal year.

That covers general contractors, framers, roofers, excavation companies and most trades that hire other trades. It does not matter whether the sub is a sole proprietor or a corporation. If you paid them for construction services and the total passed $500, you file a slip.

The rules

All of the following are from the CRA T5018 page: CRA: T5018 slip.

  • Who files: your primary source of business income is more than 50% from construction activities, and you made payments to subcontractors for construction services.

  • Threshold: total payments to a subcontractor in the period of more than $500, measured before GST/HST.

  • What goes in box 22: the gross amount paid, including GST/HST and PST where applicable. So the test excludes GST but the reported figure includes it.

  • What not to report: payments for goods only, payments to employees (those go on a T4), and payments to non-residents (those go on a T4A-NR).

  • Mixed invoices: if a sub's invoice covers both goods and services, report the whole amount. Only pure goods purchases are excluded.

  • Reporting period: calendar year or fiscal year. Once you choose, stay consistent.

Due date: six months after the end of the reporting period: CRA: when to file information returns. For a calendar-year filer, 2026 slips are due June 30, 2027. For a July 31 fiscal year end, they are due January 31.

Electronic filing: required if you file more than 5 slips of one type in a calendar year (CRA: information return penalties). Six T5018 slips means you must file online through My Business Account or Web Forms. Paper is only allowed for five or fewer.

Penalties

Late filing (same source as the due date page): the greater of $100 or a daily amount by slip count, for up to 100 days.

  • 1 to 50 slips late: $10 a day, maximum $1,000

  • 51 to 500 slips: $15 a day, maximum $1,500

  • 501 to 2,500 slips: $25 a day, maximum $2,500

  • 2,501 to 10,000 slips: $50 a day, maximum $5,000

  • 10,001 or more slips: $75 a day, maximum $7,500

Filing on paper when electronic was required, per slip type (CRA: information return penalties):

  • 6 to 50 slips: $125

  • 51 to 250 slips: $250

  • 251 to 500 slips: $500

  • 501 to 2,500 slips: $1,500

  • 2,501 or more slips: $2,500

Worked example: a Kelowna general contractor

In calendar 2026 the company paid 14 subcontractors. Twelve were paid more than $500 before GST; two were paid $350 and $480 for small jobs. Result: 12 slips, due June 30, 2027, and since 12 is more than 5, they must be filed electronically.

The framer was paid $84,000 plus $4,200 GST. Box 22 shows $88,200. The lumber yard was paid $130,000 for materials only: no slip, because payments for goods only are excluded.

Suppose the owner forgets and files the 12 slips on paper on August 15, 2027, 46 days late. Late penalty: $10 × 46 days = $460 (above the $100 minimum, below the $1,000 cap). Paper penalty for 6 to 50 slips: $125. Total $585. Even one day late costs the $100 minimum, so do the slips in June, not July.

Why the CRA cares

The T5018 is a matching tool: the CRA checks your reported amounts against the subcontractor's return. It also protects you, as evidence the payment was a deductible subcontract cost and not an unreported wage.

Rates verified on 2026-10-25.

FAQ

Do I send a copy of the T5018 to the subcontractor? The CRA does not require you to, unlike a T4. Most contractors do anyway so the sub can reconcile their own books.

Does the $500 threshold include GST? No. The threshold test is on payments before GST/HST. Once a sub is over $500, the amount in box 22 includes GST/HST and PST.

What if my business is 40% construction and 60% property management? You are below the 50% test and not required to file T5018 slips. Check the current rules if your mix changes year to year.

Is a T5018 the same as a T4A? No. A T4A reports fees for services in general. A T5018 is specific to construction businesses paying subcontractors and has no withholding. A construction business files T5018s for subs, not T4As.

Can I pick a fiscal year reporting period if my year end is not December 31? Yes. You can use either the calendar year or your fiscal year. Many corporations use the fiscal year so the T5018 total ties to the subcontract expense on the financial statements.

A trades owner should talk to an accountant before the first year they pay more than five subcontractors, so the electronic filing account and the subcontractor ledger are set up before the June deadline, not after.

How Murtagh & Co. Can Help.

We work with trades and construction businesses across the Okanagan on bookkeeping, GST, payroll, tax and the numbers behind your pricing.

Murtagh & Co. was founded by Devon Murtagh, CFA, FRM, a former trades business owner.

Prefer to talk it through? Book a free 30-minute call, or reach out at info@murtaghco.ca.

More free tools for contractors: murtaghco.ca/contractor-toolkit