Massive CRA Penalty
I received an email from a new client a few months ago.
The client runs a painting company.
Not a huge operation. A couple of employees. He’ll do close to $1M this year.
The email had a scanned CRA with a large penalty.
But not for GST/HST or income tax.
It was for a few years of missing T5018 Slips.
The letter was dated in Nov ‘25. It was sent to me in early Jan ‘26.
The CRA penalties stack up pretty quickly:
The penalty for each late return is $25 a day, with a minimum penalty of $100 and a maximum of $2,500.
You read that right, $25 a day.
One late slip will cost you at least $100, and after 100 days, you’ll owe the CRA $2,500.
The client owes slips for 2019-2022 and 2024.
The total bill is $12,500 for late T5018 slips.
I get it, the CRA sucks.
It feels like extortion.
But what makes this worse is that T5018 slips are the easiest CRA requirement to meet.
What’s a T5018 Slips?
The T5018 is a CRA reporting requirement for businesses in the construction industry.
If construction accounts for more than 50% of your business income, and you’re paying subcontractors for construction services, you’re required to file a T5018 slip for every sub you paid more than $500 to in your reporting period.
Think of it like a T4, just for your subs, not your employees.
The CRA put this in place because the construction industry has one of the highest rates of unreported income in Canada.
They use T5018s to cross-reference what you report paying versus what your subs report receiving.
It’s a paper trail, and they take it seriously.
Who Has to File?
This isn’t just for general contractors or big builders. If you’re any of the following, you’re probably on the hook:
- General contractors
- Specialty trades (plumbers, electricians, framers, drywallers)
- Renovation and remodelling contractors
- Home builders
- Landscapers, excavators, and site prep contractors
If you’re hiring subs, even occasionally, and construction is your main business, you likely have an obligation to file.
The Details That Trip People Up
1. The deadline isn’t April 30. T5018s are due six months after the end of your chosen reporting period. If you file on a calendar year, that’s June 30. Most contractors don’t know this and miss it.
2. You pick your reporting period, and you’re stuck with it. You can file on a calendar year or your fiscal year. Once you choose, CRA requires written approval to change it.
3. Paper filing has a threshold. If you’re filing six or more slips, CRA now requires electronic filing. Paper above that limit can trigger its own separate penalty.
4. Penalties are real. Late T5018s cost you $25 per day, with a minimum of $100 and a maximum of $2,500 per return. That adds up fast if you’re behind on multiple years.
How we can help
If you have about 5 subs you need to file T5018s for, we have an easy online tool: https://strucs.co/t5018-slips/
Fill out the details, and it will email all the forms you need to submit to the CRA by mail.
If you have over 5 subs, you’ll have to file electronically. (See item 3 above).
We usually file for our clients on a calendar year.
So, T5018s are due on Jun 30.
If you need help, email us at crew@strucs.co and we’ll get you set up right away.
Don’t let this simple requirement cost you more than it needs to.
