T5018 filing for Ontario contractors

If more than half your business income comes from construction, you have a filing obligation that most other industries have never heard of. It is called the T5018, and it is the single most common thing a general practice accountant misses on a contractor's file.

Who has to file

You must file if more than 50% of your business income comes from construction activities. That threshold is about your income, not your job title, so a business that does some construction alongside something else needs to check the split rather than assume.

Construction activities are read broadly. Erecting, excavating, installing, altering, modifying, repairing, improving, demolishing, dismantling or removing anything on a site all count.

What you have to report

Payments to subcontractors for construction services, where the total paid to that subcontractor in the reporting period is more than $500, excluding GST/HST.

What is caught:

• Cash, cheque and electronic payments
• The construction services portion of a mixed invoice
• Payments to a subcontractor who is a corporation, a partnership or an individual

What is not:

• Payments for goods only
• Payments to employees, which go on a T4 instead
• Payments under $500 in the period to that subcontractor

When it is due

Six months after the end of your reporting period.

You choose whether your reporting period is your fiscal year or the calendar year. That choice is made once and then applied consistently. You cannot switch back and forth to suit a given year.

For a December 31 year end filing on a fiscal-year basis, that means the T5018 is due June 30.

The three mistakes that cause the penalties

1. Treating it as optional because the subcontractor is incorporated. Incorporation makes no difference. If the payment is for construction services and it exceeds $500, it is reportable.

2. Missing the ones paid in cash. The obligation attaches to the payment, not to how it was made. Cash payments are reportable and they are also the ones most likely to be questioned later.

3. Assuming the bookkeeper is tracking it. Most bookkeeping setups code subcontractor payments to a single expense account without recording the business number or SIN needed to file. Then it is June, the return is due, and someone is phoning around asking for numbers.

The fix is a five-minute change at setup. Capture the legal name, address and business number the first time you pay a new subcontractor, and code their payments to their own sub-account. The T5018 then falls out of the books rather than being reconstructed from them.

What it costs to get wrong

Late-filing penalties are calculated per slip and scale with how many are late and how long. On its own, one late return is not catastrophic. The bigger exposure is what a T5018 review tends to turn into, which is a look at whether the people you are calling subcontractors are subcontractors at all.

That question is answered by control, ownership of tools, chance of profit and risk of loss, not by what the contract says. If it goes against you, the corporation becomes liable for unremitted CPP, EI and income tax, plus penalties and interest, on payments already made.

The short version

• More than 50% construction income means you file
• Report subcontractors paid more than $500, excluding GST/HST
• Due six months after your reporting period ends
• Set up the bookkeeping so the numbers exist before you need them

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General information only, current at August 2026. Tax rules change and GST/HST status is fact-specific. Confirm your own position before relying on anything here.