T5018 - contract payment reporting system

CONTRACT PAYMENT REPORTING SYSTEM

The Contract Payment Reporting System (CPRS) requires construction businesses to record payments they make to subcontractors for construction services and report these payments to the Canada Revenue Agency (CRA).

Who will have to report?

If you are an individual, partnership, trust, or corporation with construction as your primary source of business income and you make payments to subcontractors for construction services, section 238 of the Income Tax Regulations requires you to complete an information return.

An information return for the CPRS consists of the T5018 Summary and the related slips. The summary alone is not an information return. You have to complete a T5018 Summary even if you prepare only one T5018 slip. The form and slip are available from our Web site at www.cra.gc.ca/contract.

A subcontractor is an individual, partnership, trust, or corporation that provides construction services to a business. Subcontractors include individuals or businesses that are registered for the goods and services tax/harmonized sales tax (GST/HST), and non-GST/HST registrants that are below the $30,000 limit for GST/HST registration purposes. You do not need to report payments to subcontractors for services such as bookkeeping, janitorial, or legal.

Construction activities relate to the erection, excavation, installation, alteration, modification, repair, improvement, demolition, destruction, dismantling, or removal of any part of a building, structure, surface or sub-surface construction.

What payments do you report on the slips?

Report all payments you make to subcontractors for construction services including GST/HST and provincial/territorial sales tax where applicable. You do not have to report payments you make for goods only. Report mixed services and goods payments if there is a service component of $500 or more in the year.

If you paid a subcontractor less than $500 for services rendered in the year, you do not have to report these payments. You do not need to report wages you pay to employees on these slips. Report wages on T4 slips.

You also have to report amounts you pay to a Canadian resident for construction services provided outside Canada.

For what period do you report these payments?

You can report payments on a calendar-year basis, or based on your fiscal year end. Once you choose a reporting period, subsequent returns must be filed for the same reporting year unless otherwise authorized in writing by the CRA.

Where do you get more information?

For more information, go to www.cra.gc.ca/contract or call 1-800-959-5525.

Filing formats

Effective January 1, 2010, if you file more than 50 T5018 slips for a calendar year, you must file the return over the Internet. If you do not, you are liable to a penalty. For more information about filing electronically, go to www.cra.gc.ca/iref.

You can also choose to provide a listing or printout of all payments you make to subcontractors, provided it is on a line by line basis in column format with all the information required on the slip. The listing or printout still has to have all the summary information, including the total payments to the subcontractors, the total number of recipients of these payments, and the signature of an authorized person.

If you want to complete your T5018 slips using a personal computer, you can get a copy of the PDF fillable form, along with the instructions for using it, from our Web site at www.cra.gc.ca/contract.

How to complete the T5018 slips

Box 20 - For the period ending - Enter the date that applies to the calendar or fiscal year end of the reporting period you have chosen.

Box 22 - Construction subcontractor payments - Enter the total amount of payments you made to the subcontractor during the period including GST/HST and provincial/territorial sales tax, where applicable. If the total amount of payments to a subcontractor is less than $500, you do not have to complete a T5018 slip for that subcontractor.

Box 24 - Recipient's Identification Number (Account Number or SIN) - Enter the recipient's 15-character Account Number (which consists of the nine-digit Business Number, a two-letter program identifier, and a fourdigit reference number) or the social insurance number. You can call 1-888-490-8220 to verify if the subcontractor is registered for GST/HST, or go to www.cra.gc.ca/gsthstregistry.

Recipient's name - Enter the name of the person or business to whom you made the payment. While it is not mandatory, we encourage you to enter the recipient's address.

Payer's name - Enter your business or individual name.

Payer's Account Number - Enter your 15-character Account Number (which consists of the nine-digit Business Number, a two-letter program identifier, and a four-digit reference number) on your copy and the copy you send to the CRA only. Do not enter your Account Number on the copies you give to the contractors.

How to distribute the paper slips

Send this summary and related slips to:

Ottawa Technology Centre
Canada Revenue Agency
875 Heron Road
Ottawa ON   K1A 1A2

While it is not mandatory, we encourage you to share this information with the subcontractors by giving them a copy of the slip. Your Account Number is not needed on the subcontractor's copy.

Keep a copy of the slips for your records.

How to amend or cancel a slip

If you notice that you made an error on a T5018 slip that you already filed, prepare an amended slip to correct the information. You do not have to file an amended T5018 Summary with these slips. For a paper slip, print "AMENDED" at the top of the revised slip. Send a copy of the slip with a letter explaining the reason for the amendment to the above address.

If you are cancelling a paper T5018 slip, send us a copy of the original clearly marked "CANCELLED."

To amend or cancel a slip electronically, go to www.cra.gc.ca/iref and select the "Amending returns" option.