T5018 slips in Alberta, minus the panic.

If you hire subs, T5018 slips in Alberta are probably on your to-do list, whether you know it or not. Every spring, a lot of contractors discover they were supposed to be tracking something all year: the T5018, or Statement of Contract Payments. It's how CRA keeps an eye on income earned by subcontractors in construction.

The good news: the slips are simple if you set things up right at the start of the year. This guide covers who files, what to collect, and when it's due, whether you're a framer in Spruce Grove, a renovator in Sherwood Park or a general contractor based in Edmonton.

1Who has to file T5018 slips in Alberta

The rule hangs on your primary business activity. If construction is the main thing your business does, you generally have to report what you pay subcontractors for construction services. CRA looks at where most of your business income comes from.

That covers a wide range of businesses:

• General contractors and renovation companies
• Trades such as framing, roofing, electrical, plumbing, HVAC, drywall, flooring, concrete and painting
• Excavation, demolition and site work businesses
• Smaller trades that sub out parts of their jobs, even occasionally

It doesn't matter whether you're a sole proprietor or a corporation. And "construction" is broad: building, renovating, repairing and demolishing all count.

2What counts as a reportable payment

You report the total you paid each subcontractor for construction services during your reporting period, once that total reaches $500. A few details trip people up:

Whether to include GST in the amount is a detail worth checking in CRA's current T5018 guide for your situation. Whatever you choose, be consistent across all your slips.

3What to collect from every sub

The hardest part of the T5018 is chasing information from people you paid months ago. Make it part of onboarding a sub, before the first payment goes out.

A simple one-page sub intake form does the job. Store it with their vendor record so you're not digging through old emails at year-end. Treat SINs carefully: they're sensitive personal information, so store them securely and limit who can see them.

4The T5018 deadline

You choose your reporting period: either the calendar year or your fiscal year. Once you pick one, you generally stick with it. The information return is due six months after the end of that period.

• Calendar-year reporting: January to December payments, due June 30 of the next year.
• Fiscal-year reporting: for a corporation with a March 31 year-end, due September 30.

You file the slips with CRA, and it's good practice to give each sub a copy too. Most subs will want it to check against their own income when they file their T2125 or corporate return.

CRA expects electronic filing once you're past a small number of slips, so most contractors file online, either through their accounting or payroll software or through CRA's own web forms. Check CRA's current rules each year, because filing methods and thresholds do change.

Making T5018 slips easy in QuickBooks or Xero

Both QuickBooks Online and Xero can help, but only if your vendors are set up properly. The approach that works:

• Mark each subcontractor vendor as a T5018 or contractor vendor.
• Code sub invoices to a "Subcontractors" expense account, separate from materials.
• Pay subs from the business account, never cash out of pocket without a record.
• Run a vendor payment summary at year-end and check it against your bank statements.

If your books are behind and you're staring at a June deadline, catch-up bookkeeping can rebuild the year from your bank records and pull the sub totals out cleanly. If you're also juggling job costing and holdbacks, our guide to contractor bookkeeping in Edmonton covers the bigger picture.

5A worked example

Say you run a small renovation company in Sherwood Park that reports on a calendar year. Over the year you paid:

• An electrician: $18,400 across six jobs. Slip required.
• A drywall crew (incorporated): $26,000. Slip required; being incorporated doesn't change that.
• A tile setter: $420 for one small backsplash. No slip, because the total is under $500.
• A lumber yard: $41,000 in materials. No slip, because it's goods, not construction services.

That's two slips, due by June 30. If your vendor records already have each sub's legal name, address and business number, the whole job takes well under an hour. If they don't, you're emailing the electrician in May asking for a number he doesn't remember giving you.

If you missed a year

It happens, especially in a business's first few years. The fix is to gather the payment totals from your books or bank statements, collect the missing sub details, and file as soon as you can. Late-filing penalties generally grow the longer a return is outstanding, so waiting rarely helps. If you're unsure how to approach it, talk to your accountant before filing.

6Common T5018 mistakes

• Forgetting small subs. The helper you paid $650 over two weekends still counts.
• Reporting materials suppliers. Lumber yards and supply houses don't get slips.
• Using a nickname instead of a legal name. The slip should match what CRA has on file for that person or business.
• Assuming a sub's corporation means no slip. Incorporated subs are still reportable.
• Missing a year entirely. If it's happened, deal with it sooner rather than later.

Plum handles T5018 prep for trades across Edmonton, Sherwood Park, Spruce Grove and Leduc as part of our monthly bookkeeping. If you'd like this off your plate before next June, book a short call and we'll take a look.

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This article is general information for Alberta businesses and isn't tax or legal advice. Rules and thresholds change, so confirm your situation with your accountant or CRA.