Skip to content
English
  • There are no suggestions because the search field is empty.

T5018 – Subcontractor Payments

Learn how the T5018 reports subcontractor income and how Optimize helps contractors and business owners manage it for tax purposes

If you are self-employed in the construction sector, you may receive a T5018 Statement of Contract Payments instead of a T4A or T4. This form is specific to the construction industry and is issued by businesses that paid subcontractors more than $500 during the year for construction services. The Canada Revenue Agency uses it to verify income reporting and ensure tax compliance.

At Optimize, we use your T5018 to help ensure your self-employment income is accurately captured, reported, and planned for within the broader context of your personal and business financial goals. Knowing how this form works helps you avoid underreporting income and prepare for year-end tax obligations.

The Foundation of Construction Income Reporting

The T5018 form is used only in the construction industry and only for contract payments, not wages or salaries. You may receive a T5018 if you:

  • Operate as an independent contractor or subcontractor.

  • Provided construction services to another business or general contractor.

  • Were paid $500 or more by a single payer during the year.

The T5018 includes:

  • Your name or business name

  • Your business number or SIN

  • Total payments made to you for contract services

  • The payer’s name and business number

These amounts are also sent to CRA, allowing them to match reported income with your tax return. It is up to you to include this income on your T1 or business return if you operate as a sole proprietor.

Why the T5018 Matters in Your Financial Plan

T5018 slips are more than just paper records. They reflect business activity that can impact your entire tax profile. This matters when you are:

  • Running a small construction business or working as a self-employed tradesperson.

  • Managing GST or HST remittances alongside income tax.

  • Coordinating multiple income sources as both a contractor and investor.

  • Planning for tax instalments or preparing for CRA verification of income.

Learn how to read a T5018 form to better understand the details and terminology used throughout your return.

Unlike employment income, contract income typically does not have taxes withheld. That means your net earnings are higher upfront, but so is your responsibility to set aside money for taxes.

Tip: Use your T5018 slips as a prompt to review all your contractor income. Some payers may not issue a slip, but all income must be reported. This helps avoid missing income on your return.

Learn how to read a T5018

Understanding your T5018 is more than reporting business income. It shows how contractor payments affect your taxes, audit risk, and long-term planning. Used mainly in construction, the T5018 reports payments to subcontractors, and CRA expects the full amount to be reported as income, even if expenses apply.

At Optimize, we help include this income in your financial plan with accurate reporting and smart strategy. This article breaks down the T5018 to help you stay compliant and focused on growth.

Identification and Basic Information

This section links payments made to you with the company that issued them and the relevant tax period.

Payer’s name and address
The company or contractor who paid you and is reporting those payments to CRA.

Recipient’s name and address
Your name or business name as the recipient of payment.

Tax year or calendar period
The period for which the income is being reported. Some slips cover a calendar year, others a fiscal year depending on the payer’s reporting cycle.

Recipient account or business number
If incorporated, your business number may be shown here. This helps CRA confirm alignment with your business tax return.

Payment Information

This section summarizes the total amount you were paid for contracted services. It is not a net income number — expenses are not included.

  • Box 22 – Total amount paid for services
    This is the gross amount the payer paid you for services, excluding GST/HST. This must be reported as revenue on your business or self-employment return.

Important: T5018 slips do not include any deductions for materials, supplies, wages, or expenses. You must calculate and deduct those separately when filing your return. The CRA uses these slips to match reported income, so underreporting may trigger a review.

GST/HST and Invoicing

While the T5018 reports gross payments for services, it generally excludes sales tax. This has implications for tax planning and GST/HST filings.

  • GST/HST not included
    If you charged sales tax, it typically isn’t reported on the T5018. Make sure your GST/HST filings reflect actual amounts collected.

Tip: If you receive multiple T5018 slips from different contractors, keep detailed invoices and payment records to reconcile the total. CRA often audits T5018 recipients, and matching slips to your books helps reduce that risk.