# CRA T5018 Statement of Contract Payments Guide 2026: Subcontractor Tax Form & T2125 Rules

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- **Summary:** CRA T5018 Statement of Contract Payments guide (2026): C$500 subcontractor reporting threshold, Box 22 GST/HST inclusive rules, and T2125 Line 8360 filing.

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# CRA T5018 Statement of Contract Payments Guide 2026: Subcontractor Tax Form & T2125 Rules

**Short answer: Under Section 238 of the Income Tax Regulations, the CRA T5018 Statement of Contract Payments is a mandatory information return that Canadian construction businesses (earning more than 50% of gross revenue from construction activities) must file within 6 months of their reporting period for every subcontractor paid C$500 or more (including GST/HST and provincial tax). In Box 22, payers report the total gross tax-inclusive payments, while subcontractors report their pre-tax revenue on Form T2125 Line 8000.**

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Every year across Ontario, British Columbia, Alberta, and Atlantic Canada, general contractors and trade subcontractors run into the same costly audit discrepancy when reconciling a **[CRA T5018 Statement of Contract Payments](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/completing-filing-information-returns/t5018-statement-contract-payments.html)**:

1. **The Box 22 GST/HST-Inclusive Trap for Subcontractors:** Unlike a T4A slip, **Box 22 on a T5018 slip includes the 5% GST or 13%–15% HST** that the general contractor paid you. If you simply copy Box 22 straight onto **Line 8000** of your **[Form T2125](/keel/canada-t2125-explained/)** without backing out the GST/HST you collected, you will accidentally pay federal and provincial income tax plus **11.9% CPP** on your sales tax.
2. **The Payer Filing Penalty for General Contractors:** If your construction business derives **more than 50% of its business income from construction activities** and you hire a framing crew, electrician, plumber, drywaller, or excavation sub for **C$500 or more** in a year without filing a T5018 Summary and slips within 6 months of your year-end, the CRA assesses automatic late-filing penalties per slip—and may audit your **Line 8360 (*Subcontracts*)** deduction on Form T2125.

Below is the complete **2026** statutory guide to the **CRA T5018 Statement of Contract Payments** from both sides of the job site: when a general contractor must issue T5018 slips, what information you must collect from a sub before releasing their first draw, and how a subcontractor reconciles Box 22 with **[CRA GST/HST invoice requirements](/keel/canada-cra-gst-hst-input-tax-credit-invoice-requirements-guide/)** and **[Form T2125](/keel/canada-t2125-explained/)**. (For Québec construction contracts, see our companion guide to **[Attestation de Revenu Québec and Form TP-1086.R.23.12-V](/keel/quebec-attestation-revenu-quebec-et-sous-traitant-tp-1086-guide/)**.)

## Who must file a CRA T5018 Statement of Contract Payments in 2026?

Under the **Contract Payment Reporting System (CPRS)** administered by the Canada Revenue Agency, you are legally required to file a **T5018 Summary** and individual **T5018 slips** if your business (sole proprietorship, partnership, trust, or corporation) meets **all three** statutory conditions:

1. **The >50% Construction Revenue Test:** More than **50%** of your business's gross income for the reporting period comes from **construction activities**—defined by the CRA as the erection, excavation, installation, alteration, modification, repair, improvement, demolition, destruction, or dismantling of any building, structure, road, bridge, pipeline, or real property (including residential renovations, roofing, HVAC, electrical, plumbing, concrete, landscaping structures, and painting).
2. **Subcontractor Payments for Construction Services:** You made payments to subcontractors (whether unincorporated sole proprietors, partnerships, or corporations) for **construction services** (or mixed labour-and-material subcontracts). Purely off-the-shelf material purchases from a lumber yard or supply house (such as Home Depot, Rona, or EMCO) with no installation labour do **not** go on a T5018.
3. **The C$500 Annual Threshold per Subcontractor:** The total gross amount you paid or credited to a specific subcontractor during your chosen reporting period (either the **calendar year** or your **fiscal year**) was **C$500 or more**, **including GST/HST** and any provincial sales tax.

*Important Exemption for Homeowners and Non-Construction Businesses:* If a private homeowner hires a general contractor to remodel a kitchen, or if a retail restaurant hires a plumber to fix a drain, the homeowner or restaurant does **not** file a T5018 because less than 50% of their business revenue comes from construction.

## What goes in Box 20, Box 22, and Box 24 of the T5018 slip?

Whether you are a general contractor preparing your annual CPRS return or a subcontractor checking a slip issued to you, here is what each box on the **CRA T5018 Statement of Contract Payments** represents:

| T5018 Box / Field | Statutory Rule & What Must Be Entered | Common Audit Mistake to Avoid |
|---|---|---|
| **Period Ending (Year / Month / Day)** | Either December 31 of the calendar year **or** the last day of the payer's fiscal period | Mixing calendar-year subcontractor totals with fiscal-year GST/HST periods without a reconciliation schedule |
| **Box 20 — Subcontractor Payments (For CRA Use)** | Internal period code used by the CRA | Leave blank on paper slips where instructed by CRA guide RC4711 |
| **Box 22 — Total Contract Payments ($CAD)** | **Gross total paid or credited** to the subcontractor during the period (**C$500 or more**), **INCLUDING GST/HST**, provincial tax, and any materials billed on the subcontract invoice | Reporting pre-tax amounts in Box 22, or failing to include the GST/HST portion paid to the sub |
| **Box 24 — Recipient's Program Account Number (`BN`) or `SIN`** | Either the subcontractor's **15-character CRA Business Number** (`123456789RT0001` / `RP` / `RC`) **or**, for an unincorporated sole proprietor without a BN, their **9-digit Social Insurance Number (`SIN`)** | Paying a subcontractor C$500+ before collecting their legal name, address, and 15-character `RT0001` BN or SIN |
| **Filing Deadline** | Due **within 6 months** after the end of the reporting period you chose (e.g., **June 30** for a December 31 calendar-year reporter) | Missing the 6-month CPRS deadline or forgetting that electronic filing is mandatory above 5 slips |

## How does a subcontractor reconcile T5018 Box 22 with Form T2125 and GST/HST returns?

Because **Box 22** on a **CRA T5018 Statement of Contract Payments** is reported **including GST/HST** (and on a cash-paid basis during the payer's fiscal period), your T5018 slip will almost never equal the pre-tax revenue line on your **[Form T2125](/keel/canada-t2125-explained/)** unless you are a non-registered small supplier under `C$30,000` working on the same calendar year as the payer.

Here is the exact **2026 reconciliation table** for a subcontractor in Ontario (13% HST), Alberta/BC (5% GST), and Nova Scotia (14% HST) who billed **C$80,000** in pre-tax construction services and was paid in full during the calendar year:

| Province &Subcontractor Tax Status | Pre-Tax Invoices Issued (`Form T2125 Line 8000 / 3C`) | GST/HST Collected (`GST34 Line 101`) | Gross Amount Payer Reports in **T5018 Box 22** | Why theCRA Cross-Match Passes Cleanly |
|---|---:|---:|---:|---|
| **Ontario Subcontractor (`13% HST` Registered — Regular Method)** | **`C$80,000.00`** | `C$10,400.00` (`13% HST`) | **`C$90,400.00`** | CRA automated matching compares `T5018 Box 22 (C$90,400)` minus `GST34 Line 101 (C$10,400)` = `T2125 Line 8000 (C$80,000)` |
| **Alberta / BC Subcontractor (`5% GST` Registered — Regular Method)** | **`C$80,000.00`** | `C$4,000.00` (`5% GST`) | **`C$84,000.00`** | `T5018 Box 22 (C$84,000)` minus `5% GST (C$4,000)` reconciles to `C$80,000.00` on Form T2125 |
| **Ontario Subcontractor Using [HST Quick Method (8.8%)](/keel/canada-contractor-hst-quick-method-guide/)** | **`C$80,000.00`** *(plus `C$2,732.80` Quick Method incentive)* | `C$10,400.00` collected; `C$7,667.20` remitted | **`C$90,400.00`** | Gross sales include GST/HST on Line 3A, minus Quick Method remittance and government incentive adjustment on T2125 |
| **Small Supplier Subcontractor (Under `C$30,000`, Not GST/HST Registered)** | **`C$24,000.00`** | `C$0.00` *(No GST/HST charged)* | **`C$24,000.00`** | Because no GST/HST was charged, `T5018 Box 22` matches `T2125 Line 8000` dollar-for-dollar |

### Why fiscal-year T5018 slips often differ from calendar-year T2125 returns
A general contractor corporation with a **March 31** or **September 30** fiscal year-end is allowed to file its T5018 return based on its fiscal year rather than the calendar year. That means a T5018 slip you receive from an incorporated builder may cover payments made from **April 1, 2025 to March 31, 2026**, whereas your personal **Form T2125** covers **January 1, 2026 to December 31, 2026** on the **accrual method** (invoices earned during the calendar year).

**Golden Rule for Subcontractors:** Always report your true **January 1 to December 31 pre-tax accrued invoice revenue** on **Form T2125**, and keep your sequential PDF invoices and bank deposit dates on file. If the CRA sends a T5018 matching query letter, your invoice log proves immediately which invoices fell into the prior calendar year and how much of Box 22 was GST/HST remitted on your GST/HST return.

## What 5 items must a General Contractor collect from every Subcontractor before paying the first invoice?

If you are a general contractor deducting subcontractor payments on **Form T2125 Line 8360 (*Subcontracts*)** and claiming **Input Tax Credits (`Line 108`)**, set up an onboarding rule before releasing the first progress draw:

1. **Legal Name & Operating Trade Name:** Must match the name registered with the CRA (and provincial corporate/business registry).
2. **15-Character GST/HST Registration Number (`123456789RT0001`) or Small Supplier Declaration:** For any invoice of **[C$100 or more](/keel/canada-cra-gst-hst-input-tax-credit-invoice-requirements-guide/)**, verify the subcontractor's `RT0001` number on the **[CRA GST/HST Registry](/keel/canada-gst-hst-number-lookup/)** as of the invoice date so your ITC cannot be denied.
3. **CRA Business Number (`BN`) or Social Insurance Number (`SIN`) for T5018 Box 24:** Required to complete your annual T5018 return once payments hit **C$500**.
4. **Provincial Workers' Compensation Clearance Certificate (`WSIB` in Ontario, `WorkSafeBC` in BC, `WCB` in AB/MB/SK/NS, `CNESST` in Québec):** If a subcontractor does not hold active clearance, the principal contractor becomes personally liable for the subcontractor's unpaid premiums on that contract.
5. **Sequential Itemized Subcontractor Invoices:** Every draw must be backed by a dated invoice showing the site address, work period, labour/material description, and separated GST/HST.

## How do you track subcontractor invoices, T5018 totals, and T2125 receipts on site?

Under **Section 230 of the Income Tax Act**, both general contractors and subcontractors must retain all T5018 records, sequential invoices, and supplier receipts for **[6 years from the end of the last tax year](/keel/canada-cra-6-year-record-keeping-sole-proprietor/)** to which they relate. Keeping every client invoice, subcontractor bill, and material receipt organized by job on your iPhone ensures your T5018 Box 22, GST/HST `Line 101 / Line 108`, and Form T2125 reconcile in seconds.

## Frequently asked questions

**Is a T5018 the same as a T4A slip in Canada?**

No. A **CRA T5018 (*Statement of Contract Payments*)** is specifically for **construction subcontractors** paid **C$500 or more** (including GST/HST) by a business that earns more than 50% of its revenue from construction. A **T4A (*Statement of Pension, Retirement, Annuity, and Other Income*, Box 048 — Fees for Services)** is used across non-construction industries to report service fees paid to independent contractors. In addition, **T5018 Box 22 includes GST/HST**, whereas **T4A Box 048 excludes GST/HST**.

**Does a general contractor have to give a copy of the T5018 slip to the subcontractor?**

Interestingly, while the CRA **requires** the payer to file the T5018 Summary and all T5018 slips with the Canada Revenue Agency within 6 months of the reporting period, the CRA states that providing a paper or PDF copy to each subcontractor is optional (though strongly recommended as a best practice so the subcontractor can see the exact Box 22 total and period ending reported to the CRA under their `RT0001` BN or SIN).

**Where do I enter a T5018 slip on my personal tax return (Form T2125)?**

If you are an unincorporated subcontractor, your T5018 revenue is part of your gross self-employed business income on **[Form T2125 (*Statement of Business or Professional Activities*)](/keel/canada-t2125-explained/)**. If your tax software has a T5018 data-entry screen, link the slip to your T2125 business schedule and ensure you do **not** double-count the same invoices in both the T5018 box and your manual gross sales line, and ensure that any **GST/HST included in Box 22** is backed out so you only pay income tax and CPP on your pre-tax revenue.

**Do I include materials and GST/HST when calculating the C$500 T5018 threshold?**

Yes. For any mixed contract involving construction services (such as a drywaller or electrician billing both labour and materials on the job), the **entire gross payment including materials and GST/HST** counts toward the **C$500** threshold and is reported in **Box 22** of the T5018 slip. Only pure goods-only purchases (such as buying lumber or fixtures from a retail supply store with zero installation service) are excluded from T5018 reporting.

**What is the CRA filing deadline for the T5018 Summary and slips?**

Under Section 238 of the Income Tax Regulations, a construction business must file its **T5018 Summary and slips within 6 months** after the end of the reporting period it selected (for example, by **June 30** if reporting on a January 1 to December 31 calendar-year basis, or within 6 months of its corporate fiscal year-end). If you file more than 5 T5018 slips for a period, mandatory electronic filing via CRA Internet File Transfer (XML) or Web Forms applies.

**Can the CRA disallow my subcontractor expenses on Form T2125 Line 8360 if I do not file T5018 slips?**

Yes. During a construction desk review or GST/HST audit, the CRA cross-checks **Line 8360 (*Subcontracts*)** on Form T2125 and **Line 108 (*Input Tax Credits*)** against your filed T5018 Summary and verified `RT0001` GST/HST numbers. Paying cash without a dated invoice, a verified GST/HST number, and a filed T5018 slip can result in disallowed business deductions plus late-filing penalties under Section 162(7) of the Income Tax Act.

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*This guide provides general statutory information for Canadian contractors and subcontractors as of 2026 and is not formal tax or legal advice. Always verify current filing rules with the [Canada Revenue Agency (CRA) T5018 Contract Payment Reporting System](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/completing-filing-information-returns/t5018-statement-contract-payments.html) or a Chartered Professional Accountant (CPA).*