• 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 to report these payments to the Canada Revenue Agency (CRA).

Who has to file an information return?

If you are an individual, partnership, trust, or corporation involved in construction activities which provide 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 fill out an information return.

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

An information return for the CPRS consists of the T5018 Summary and the related slips. The T5018 Summary alone is not an information return. You have to fill out a T5018 Summary even if you prepare only one T5018 slip. The Summary and slip are available at canada.ca/taxes-slips.

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 services, or legal services, as these should be reported in box 048 on the T4A information return.

What payments do you report on the slips?

Report all payments of $500 or more you make in the reporting period to subcontractors for construction services. Only report mixed services and payments for goods if there is a service component of $500 or more in the reporting period. The service component includes GST/HST and provincial and territorial sales tax where applicable.

Do not report wages you pay to employees on these slips; instead 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 either on a calendar-year basis, or based on your fiscal period. 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 canada.ca/taxes-slips or call 1-800-959-5525.

Filing formats

If you file more than 5 T5018 slips for a calendar year, you must file the T5018 return over the Internet. You may choose one of the following electronic filing formats:

• Internet file transfer (XML)

• Web Forms

For more information about filing electronically, go to canada.ca/taxes-iref. You can also file information returns online without a web access code using the "File a return" service at canada.ca/taxes-representatives, if you are an authorized employee or representative; or canada.ca/my-cra-business-account, if you are the business owner.

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 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.

You can use the CRA's Web Forms application at canada.ca/taxes-iref to save, print, and send your T5018 slips and summaries electronically – for free!

How to file the paper slips

You can file up to 5 slips on paper. However, we strongly encourage you to file online using Internet file transfer or Web Forms. If you choose to file your return on paper, mail it to:

While it is not mandatory, we encourage you to share this information with the subcontractors by giving them a copy of the slip. Your business number is not needed on the subcontractor's copy. Keep a copy of the slips for your records.

How to fill out the T5018 slips

Box 20 – For the period ending – The last day of the payer's reporting period for this return.

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 fill out a T5018 slip for that subcontractor.

Box 24 – Recipient's program account number (Account number or SIN) –  Enter the recipient's 15-character program account number (which consists of the nine-digit business number, a two-letter program identifier, and a four-digit reference number) or the social insurance number. You can go to canada.ca/gst-hst-registry to verify if the subcontractor is registered for GST/HST, or call 1-800-959-5525 if you are unable to use the registry.

Recipient's business name and address – Enter the name and address of the business or person to whom you made the payment.

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

Payer's program account number – Enter your 15-character business number (which consists of the nine-digit business number, RZ, and a four-digit reference number) on your copy and the copy you send to the CRA only. Do not enter your business number on the copies you give to the subcontractors.

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" with a letter explaining the reason for the cancellation to the above address.

To amend or cancel a slip electronically, go to canada.ca/taxes-iref and select "Make corrections after filing."

How to fill out the T5018 Summary

• Report all amounts in Canadian dollars and cents.

• Keep a copy of the form for your records.

T5018, Summary of Contract Payments

• Fill out the summary to indicate the total of the amounts that you reported on the related T5018 slips.

• Ensure the amounts reported in boxes 80 and 82 on the summary agree with the total of all slips.

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

Payer's program account number – Enter your 15-character business number (e.g., 123456789RZ0001). If you do not have a business number, go to canada.ca/en/services/taxes/business-number.

Payer's information – Enter your legal name, your trade name (if it differs from your legal name), and your entire business address.

Language of correspondence – Enter an "X" in the appropriate box.

Line 80 – Total number of T5018 slips filed – Enter the total number of T5018 slips that you are including with the T5018 Summary.

Line 82 – Total construction subcontractor payments – Add the amounts in box 22 on all T5018 slips. Enter the total on line 82.

Person to contact about this return – Enter the name and telephone number of a contact person that we can call to get or clarify information you reported on this information return.

Certification – The authorized person must sign and date the T5018 Summary.

Filing dates

The T5018 information return is due on or before the date that is six months after the end of the reporting period you have chosen.

If your business stops operating, you must file the T5018 return within 30 days of the date your business ends.

Penalties

Failure to comply

If you fail to file a T5018 information return, the penalty for each failure is $25 a day, with a minimum penalty of $100 up to a maximum of $2,500.

Late filing the T5018 information return

If you fail to file a T5018 information return by the due date, we may assess a late-filing penalty. For all of the penalty rates, go to canada.ca/cra-remit-due-date.

Mandatory electronic filing

If you file more than 5 T5018 slips for a calendar year you must file the return over the Internet. For more information about filing electronically, go to canada.ca/taxes-iref.

For more information, go to canada.ca/taxes-slips or call 1-800-959-5525.