T5018s: what construction businesses must report about subcontractors

Construction is one of the few industries with its own dedicated CRA information-reporting regime, and it catches many incorporated contractors off guard. If your business pays subcontractors and construction makes up most of what you do, there's a real chance you have a T5018 filing obligation you haven't been meeting — and CRA has specifically built its matching programs around this slip because subcontractor payments in construction are a known area of underreported income.

What a T5018 is, and why it exists

A T5018, Statement of Contract Payments, reports the total amount a business paid to a particular subcontractor for construction services over a reporting period. Unlike a T4A, which applies more generally to certain payments to self-employed individuals across industries, the T5018 regime exists specifically because CRA identified construction as an industry where cash payments and informal subcontracting arrangements made it easy for income to go unreported. The slip itself doesn't change how the subcontractor is taxed; it simply creates a paper trail CRA can compare against what the subcontractor files.

Who has to file

The obligation falls on businesses whose primary source of income is construction activity, whether they operate as a corporation, partnership, trust, or individual. It doesn't matter whether construction is your only line of business — if it's your primary activity by revenue, and you paid a subcontractor for construction services during the year, a T5018 is generally expected for that payment. Businesses in other industries that occasionally hire a contractor for a renovation or repair are not typically pulled into this regime; it's aimed squarely at businesses where construction is the core activity.

What counts as "construction activity"

CRA interprets construction activity broadly. It generally includes erecting, excavating, installing, altering, repairing, dismantling, or demolishing buildings, structures, or surface or subsurface construction, along with many of the trades that support that work — framing, electrical, plumbing, drywall, roofing, excavation, and similar services. A business doesn't need "construction" in its name for the rule to apply; what matters is what the business actually does and where its revenue primarily comes from.

Reporting periods

A business can choose to report on a calendar-year basis or align its T5018 reporting to its own fiscal year — whichever it selects, it should apply that choice consistently from year to year rather than switching back and forth. The completed information return, including the T5018 slips for each subcontractor paid during the period, is generally due within six months of the end of the chosen reporting period. Because this deadline doesn't necessarily line up with your T2 corporate filing deadline, it's easy for a busy contracting business to lose track of it separately.

Why CRA cross-matches T5018s against subcontractor returns

Once T5018 slips are filed, CRA has a record of what every general contractor or construction business says it paid each subcontractor. That record gets compared against what the subcontractor reported as business income on their own return, and against the GST/HST that subcontractor collected and remitted, if they're registered. A mismatch in either direction — a payer who under-reports, or a subcontractor who under-reports income they were clearly paid for — tends to surface an audit for one or both parties. This is part of why certain patterns tend to trigger CRA's attention in construction more than in many other industries.

How this interacts with GST/HST registration

T5018 reporting and GST/HST registration are two separate obligations that often surface together. If a subcontractor you're paying is earning more than the small-supplier threshold, CRA expects them to be registered for GST/HST and charging it on their invoices — and because your T5018 filing shows exactly what you paid them, it can make it obvious when a subcontractor should be registered but isn't. As the payer, it's worth confirming your subcontractors' GST/HST status before you rely on their invoices for input tax credits. Our guide to GST/HST registration covers the threshold and timing rules in more detail.

The bottom line

T5018 reporting is one of the more overlooked compliance obligations in the construction industry, partly because it isn't as widely discussed as GST/HST or payroll. If construction makes up most of your business and you pay subcontractors, it's worth confirming your filing history is current — both because the penalties for missed information returns add up, and because accurate T5018s protect you if CRA later questions a subcontractor's own reporting.

This article is general information for Canadian business owners and is current as of July 2026. It is not tax, legal or accounting advice, and it does not create a client relationship. Tax rules change and your situation is unique — please speak with a CPA before acting on anything here.

About the author

Sunny Dhillon, CPA

Founder of EverStone CPA, an Abbotsford CPA firm, and a member of the Chartered Professional Accountants of British Columbia (CPABC). Sunny works with incorporated contractors and small business owners across Canada on tax, bookkeeping and advisory. More about Sunny →