T5018s: the contractor's other slip deadline

If construction is your main business activity, you file a T5018 — the information return listing what you paid subcontractors for construction services. You elect the reporting period; the return is due six months after it ends. Payments totalling C$500 or more to one subcontractor inside that period are generally reportable, and the penalty for filing late is charged per slip — which is why this hurts the contractors with the longest sub list, not the ones with the worst books.

It is the return that gets forgotten, because nothing prompts it. Payroll prompts itself monthly. GST/HST prompts itself quarterly. The T5018 sits six months past a period end that may not even be your year-end, on a calendar nobody else in the business is watching.

Whether you file turns on your main activity, not on the job you’re on

The obligation attaches to businesses whose main activity is construction, measured as a share of business income. A general contractor, a renovation company and a specialty trade are inside it; a software company that hires a framer once is not. Legal form is irrelevant — sole proprietorships, partnerships and corporations are all filers if construction is what they mainly do.

The hedge sits on the word “mainly.” A property manager doing much of its own build-out, a manufacturer with a construction division: those files sit near the line, and the line moves as the revenue mix moves. It is tested each year, not settled when you registered.

What goes on the return, and what quietly doesn’t

Payments to a subcontractor for construction services — labour, or labour and materials together — are reportable once they total C$500 or more for that subcontractor in the period. The threshold runs on the period total, not on the single invoice, so four C$200 cheques to the same framer land inside it.

Three things generally fall outside:

• Payments for goods only. The lumber yard and the equipment rental are vendors, not subcontractors. An invoice mixing labour and materials is generally reported in full.
• Amounts you haven’t paid. The return runs on payments made in the period, not invoices booked in it, so an accrual ledger won’t agree with the slips without an adjustment — and a holdback you haven’t released is generally not reported until you do.
• Payments to employees. Those are T4 territory, and if the CRA disagrees with your classification, that is a bigger conversation than this one.

The amount you report is generally the gross you paid, GST/HST included. Each slip carries the subcontractor’s name and their business number, or their SIN where they are unincorporated with no BN. Unlike a T4, the slip does not have to be handed to the subcontractor. The CRA’s copy is the one with consequences.

You choose the reporting period once, then you keep it

You can report on the calendar year or on your fiscal period. Either is fine. Drifting between them is not, because the CRA generally expects you to stay on the one you picked and to tell them before you change it. A change made quietly looks, from their side, like a period with no return in it.

The return is due six months after the end of that period.

Those dates sit alongside your T2, GST/HST and payroll dates on the deadline table.

Most contractors pick the fiscal period, for one practical reason: the T5018 total then reconciles to the subcontract expense in the financial statements already prepared for the T2. Pick the calendar year and you are cutting the same ledger on two different dates, checking the same payments twice. Neither choice changes any tax you owe. One of them changes how long the file takes.

The penalty is per slip, so your sub list sets the size of the mistake

Late information returns carry a penalty charged per slip, scaled by slip count and days late, inside a floor and a ceiling. Two slips a month late is an annoyance. Fourteen slips filed in November for a period that ended in March is a number you remember.

A missing business number or SIN carries its own penalty, per failure, and the obligation is on you to make a reasonable effort to get it. “He wouldn’t give it to me” holds up only if you can show you asked.

Paper is mostly gone, too. Above a small number of slips, information returns must be filed electronically, and filing on paper anyway carries its own charge.

The return is really evidence about your subcontractors’ returns

The T5018 does almost nothing for you. It exists so the CRA can match what you say you paid against what the recipient reported as income. That is the entire design.

Your subs have a real interest in your slip being right — a sub who invoices GST/HST but reports revenue net of it sees a bigger number on their matching letter than they expected. What matters more to you is the other side of the same list: a file thick with subcontractor payments and thin on documentation invites the question of whether these people are subcontractors at all. Filing the T5018 doesn’t decide that question. It is the list the question gets asked from.

Reclassification lands on the payer. Where the CRA finds the working relationship was employment, you are generally assessed the unremitted CPP and EI, both shares, plus penalties and interest, and the review can reach back years. The same facts run the other way for a sub working through their own corporation — control over the work · who supplies the tools · the chance of profit and risk of loss — where they support a personal services business finding on their side of the invoice. Contractors and trades carry both exposures from the same set of invoices.

Invoice hygiene is most of the work

Almost all of this work happens months before the return, in what you require on the invoice.

Ask for the sub’s legal name, their GST/HST number, and a split between labour and materials where both appear. The GST/HST number does double duty. It gives you the business number the slip needs, since the GST/HST account is built on it, and it tells you the sub is registered — an input tax credit claimed against an absent or invalid registration number can be denied, and it is your credit that disappears, not theirs. Collect it when you engage the sub. Chase it in the week the return is due and the ones who finished in month two have stopped answering.

A worked example: fourteen subs and a September year-end

Illustrative, round numbers. A renovation contractor with a September 30 fiscal year-end paid fourteen subcontractors in the year to September 30, 2026, and elects the fiscal period rather than the calendar year.

Start with who is on the return. Two of the fourteen are suppliers — a cabinet shop that delivered and a scaffold rental yard — with no service component, so they are generally out. A drywaller was paid C$420 once for a half-day patch, under the threshold, so he is out too. That leaves eleven slips.

The eleventh is where the threshold bites. A tiler was paid C$300 in March and C$260 in August. Neither payment reaches C$500 on its own; together they reach C$560, and the test runs on the period total. He is in.

The amounts are gross. The electrician’s invoices total C$24,000 before tax; the slip reports the full amount that left the bank, GST/HST included, not the C$24,000 sitting in subcontract expense. That one convention explains most of the gap between the T5018 summary and the income statement. The rest is the C$7,000 holdback on the biggest job, invoiced in August and not released until December — outside this period entirely, and reportable next year instead.

The return is due March 31, 2027, six months after September 30. Eleven slips means filing electronically. The work is one afternoon if every invoice carries a GST/HST number, and a week of phone calls if six don’t.

What Cadence does

We set the reporting period once — usually the fiscal period, so the T5018 total reconciles to the subcontract expense on the same file that produces the T2 — and then it stops being a decision anyone revisits. The subcontractor list is built through the year rather than in the month it’s due: business numbers collected at engagement, goods-only vendors kept off, holdbacks tracked to the period they’re released in. Slips, remittances and payroll accounts run on one calendar with your GST/HST and T4s, and for contractors and trades the T5018 date joins it at onboarding with everything else in the deadline table. Filing-calendar management is in every package. Where a working relationship looks more like employment than the invoice suggests, we say so before the return goes in. That question is cheaper to answer now than after a matching letter.