The T5018 — Statement of Contract Payments is a specialized information return prescribed by the Canada Revenue Agency (CRA) under Regulation 238 of the Income Tax Regulations, made pursuant to the Income Tax Act (R.S.C. 1985, c. 1, 5th Supp.). It applies exclusively to the construction industry and requires construction businesses to report payments made to subcontractors for construction services. The T5018 serves a similar purpose to the U.S. Form 1099-NEC for non-employee compensation, but is specifically targeted at the construction sector.

Regulation 238 defines a “specified construction activity” broadly to include erecting, altering, modifying, repairing, improving, demolishing, dismantling, or removing any part of a building, structure, surface work (such as roads, paving, sidewalks, and parking lots), or underground work (including pipelines, utilities, and excavation). The regulation applies to any business whose primary source of income — meaning more than 50% of its gross revenue — comes from construction activities. This includes general contractors, renovation companies, roofing firms, plumbing contractors, electrical contractors, and any other trade that primarily performs construction work.

The CRA introduced the T5018 reporting requirement to improve tax compliance in the construction industry, where the use of subcontractors is widespread and the underground economy is a significant concern. By requiring payers to report subcontractor payments, the CRA can cross-reference the amounts reported on T5018 slips with the income reported by subcontractors on their own tax returns (T1 for individuals or T2 for corporations), thereby identifying unreported construction income.

A T5018 slip must be filed for each subcontractor to whom a construction business paid $500 or more during the reporting period for construction services. The reporting period is the payer’s fiscal year (which may or may not coincide with the calendar year), and the filing deadline is six months after the end of the reporting period. For example, a construction company with a December 31, 2025 fiscal year-end must file T5018 slips by June 30, 2026.

The $500 threshold is a cumulative amount per subcontractor per reporting period — multiple smaller payments to the same subcontractor that total $500 or more must be combined and reported on a single T5018 slip. Payments include all forms of consideration: cheques, electronic funds transfers, cash payments, promissory notes, and even barter arrangements where construction services are exchanged for goods or other services.

The T5018 requirement applies regardless of whether the subcontractor is an individual, a partnership, or a corporation. Both incorporated and unincorporated subcontractors must be reported. The payer must provide a copy of the T5018 slip to each subcontractor and file a T5018 Summary with all individual slips to the CRA. Electronic filing is required for payers issuing more than 50 T5018 slips. Construction businesses that fail to file T5018 slips face penalties under Income Tax Act s. 162(7), starting at $25 per day for each failure, with a minimum of $100 and a maximum of $2,500 per return.

A properly completed T5018 slip must identify the payer (the construction business) by full legal name and CRA Business Number (BN) in 15-character format. The payer’s complete mailing address, including province and postal code, is required. The reporting period start and end dates must be clearly stated — these typically correspond to the payer’s fiscal year.

The subcontractor must be identified by full legal name (or business name for corporations and partnerships) and either their Social Insurance Number (SIN) in XXX-XXX-XXX format for individuals or their Business Number (BN) for corporations and partnerships. The CRA strongly emphasizes the importance of collecting SIN or BN information from subcontractors before making payments, and payers who fail to provide this information on the T5018 slip may face penalties under Income Tax Act s. 162(6).

The payment amount field reports the total contract payments for construction services made to the subcontractor during the reporting period, expressed in Canadian dollars (CAD). This includes the total of all invoices paid, progress payments, holdback releases, and any other form of compensation for construction work. GST/HST amounts should be excluded from the reported total — only the pre-tax contract amount is reported. If the subcontractor provides both construction services and materials as part of a single contract, the full contract amount (including materials) is reported. However, if materials are purchased separately under a purchase order rather than a construction contract, those payments are not reportable on the T5018.