Do you need to file a T4A for a contractor you paid?

Summary

A T4A is a CRA form a business fills out to report money it paid out that wasn’t wages. Most of the form covers pension and annuity income you can ignore, and the box you’re likely to need is box 048, “fees for services”. Box 048 covers what you paid a bookkeeper, a designer or a repair shop for work done as a business, not as an employee.

1. Who gets one. Any supplier, a person or a company, you paid more than $500 in total for services over one calendar year (January 1 to December 31). The $500 counts per supplier, not across all of them, and it comes from a CRA policy rather than from a law. Payments to a corporation count too, whatever you’ve read online.
2. What goes in the box. Only the service part of what you bought, before GST/HST and provincial sales tax, so an invoice covering parts and labour gets split.
3. The deadline. Every slip, plus a T4A Summary (a cover page totalling them), goes to the CRA by the last day of February after the year you paid. For 2026 payments that’s Monday March 1 2027, and each recipient’s copy is due the same day.

In our view, keep a running list of who you paid for services, and file slips for your unincorporated suppliers first. Outside trucking nobody is being penalised for skipping the incorporated ones. You’ll also need a CRA payroll program account, meaning a number ending in RP0001 attached to your business number, so open one well before February. Trucking is the exception: where more than half your gross business revenue (total sales, before expenses) is from trucking, over $500 paid to a supplier that’s a Canadian-controlled private corporation in trucking now carries a penalty.

What a T4A is, and when a payment goes on one

A T4 reports what an employer paid an employee, with Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and income tax already deducted. A T4A is the catch-all slip for everything else a business pays out. Nothing at all is withheld from a box 048 payment to a supplier living in Canada, so your contractor invoices you and receives the full amount.¹

The duty to report sits in subsection 200(1) of the Income Tax Regulations, the rules that sit under the Income Tax Act and carry the same force. Notice what the regulation leaves out: no dollar minimum, and no exemption for paying a corporation.² The CRA’s published practice then adds two triggers. You issue a T4A where everything you paid one supplier during a calendar year adds up to more than $500. You also issue one, at any amount, where you held back income tax from a payment.³ For the Canadian-resident business suppliers discussed here, fees for services ordinarily have no income tax withheld. Non-resident service payments use the separate rules below.

The $500 is administrative policy, meaning a practice the CRA publishes and applies but that sits in no statute or regulation. As such it can move without Parliament doing anything. Only services are reportable, so goods drop out and a mixed invoice gets split: on a vehicle repair bill, the parts come out and the labour goes in.⁴ Sales tax comes out too, so you report the fee before GST/HST and any provincial sales tax.⁵

The slip also wants the recipient’s identifying number, and what you need depends on who they are. From an individual (e.g. a sole proprietor bookkeeper) you need a social insurance number, and you have to show a reasonable effort to get it, which means asking in writing and keeping a copy. Where they still refuse, enter nine zeros in that box and file on time anyway. From a corporation you’d put their business number on the slip, but the CRA says it isn’t required to complete one.⁶

Some payments that look like box 048 belong on another slip. A Canadian-resident construction subcontractor can belong on a T5018, depending on the payer’s construction activity. A non-resident contractor performing services in Canada normally goes on a T4A-NR, with 15% of that fee withheld unless the CRA authorizes a waiver or reduction. Being a foreign supplier alone doesn’t make services performed entirely outside Canada subject to that withholding. Anyone the CRA would treat as an employee goes on a T4, directors’ fees included, and that line is the expensive one to get wrong.⁷

The penalty pause, and the trucking exception

Since 2011 the CRA has run a moratorium, meaning a pause, on penalties for failing to complete box 048. In the CRA’s own account it was meant to give businesses time to get familiar with the requirement. The pause was intended to be temporary, and it remains in place for every industry other than trucking. The CRA also says what the slips are for: third-party information it uses to check what businesses report on their own returns.⁸

On December 4 2025 the CRA lifted the pause for one industry. Four conditions all have to be met before a penalty applies:

• more than half of your gross business revenue (total sales, before expenses) comes from trucking activities.
• more than half of that supplier’s revenue comes from trucking as well.
• the supplier is a Canadian-controlled private corporation, meaning a private company controlled from within Canada.
• what you paid it in the calendar year exceeds $500, before GST/HST.

Trucking activities take in long-haul freight, freight brokers and trucking staffing agencies. They leave out couriers, warehousing, taxi, bus, rail, air and water transport.⁹ Outside trucking the CRA says plainly that the slip is still required, and that only the penalty was ever suspended.¹⁰

Deadlines, the payroll account and the penalties

Every slip, plus the T4A Summary that totals them, is due on the last day of February following the calendar year you paid in. That one date covers both jobs, filing with the CRA and getting each recipient’s copy into their hands. Where it falls on a weekend or a CRA-recognised holiday, the deadline moves to the next business day. Payments made during 2026 are therefore due Monday March 1 2027 rather than Sunday February 28.¹¹

Before any of that you need a payroll program account with the CRA, because your own 15-character payroll account number has to appear on every slip. A corporation that has only ever paid dividends won’t have one, so apply in the autumn. An open account then costs you something every year: the CRA expects to hear from it on your remitting due dates, and you file a nil remittance where you have nothing to send.¹² Six or more slips of one type for one year also have to be filed online, so five T4As and five T4s stay fine on paper.¹³

Two penalties then run separately. The first is for filing late, at the greater of $100 and a daily amount, so the $100 is a floor under the whole table. One to five slips is $100 flat. Six to ten runs $5 for each day the filing is late to a $500 cap, and eleven to fifty runs $10 a day to a $1,000 cap, with the rates climbing again above that. Each daily amount is charged once on the filing rather than once per slip, and the day count stops at 100 days. To provide an example, eight slips filed two weeks late computes to $70, so you’d pay the $100 floor instead.¹⁴ The second penalty is for not getting the recipient’s copy out. It runs at the greater of $100 and $25 for each day that copy is late, to a maximum of $2,500. Whether the CRA counts that per slip or per filing isn’t stated, so it isn’t worth testing.¹⁵

Our default

We’d file a box 048 slip for every unincorporated supplier you paid more than $500 in total across the year, added up rather than invoice by invoice (e.g. a sole proprietor bookkeeper, or a designer billing in their own name). Strictly, the regulation carries no dollar minimum, so every payment for services is reportable. The CRA only asks for slips above $500, and that’s the line we work to.

Starting with the unincorporated ones is a judgment about effort rather than about risk, because outside trucking no penalty applies either way. Filing buys you compliance with the regulation as written, plus documentation behind the contractor costs you claimed on your corporate tax return. What it costs you is real work every year, a payroll account you may not otherwise want, and chasing social insurance numbers out of suppliers who’d rather not give them.

Two situations push you past that default, and neither means filing less. The first is trucking, where the four conditions above put a penalty behind the slip. The second is that you already have a payroll account and a bookkeeper preparing slips each February. Add your incorporated suppliers (e.g. your lawyer, your IT contractor) to that same batch, because the extra cost is close to nothing.

How often this changes

The mechanics here are stable and the CRA’s willingness to penalise isn’t. Once a year in the autumn, re-read this page and check whether the CRA has ended the penalty pause for your own industry. Bring that forward if your revenue mix crosses the 50% line into or out of trucking or construction, or if the business stops operating, which moves the deadline to 30 days from the date it stops.¹⁶ The trucking change landed with three weeks left in the 2025 calendar year and applied to that whole year, so a change of published policy is the likeliest reason this page dates.

Closing thoughts

The awkward thing about T4As is that the information you need is easy to capture the moment you set a supplier up, and painful to reconstruct the following February, once the supplier has stopped returning calls. Whichever position you take on filing, the fix is the same, and it isn’t really a tax decision. Record the supplier’s number, and which part of each invoice was labour, on the day their first invoice arrives.

How we handle it

We build the list of reportable payments as the year goes along, straight out of your bookkeeping records, and we open the payroll program account where the corporation doesn’t have one. We split labour from goods on mixed invoices, then file the slips and the T4A Summary electronically ahead of the deadline. Preparing them sits in our GST/HST and payroll tax service, included in the Year-Round Tax Partner and Tax + Accounting packages rather than billed separately.