CPA Answers · Knowledge Base · Canada 2026

What Happens If I Don't File a T5018?

The T5018 is the Statement of Contract Payments that construction businesses must file for subcontractor payments. Miss it, and the penalties climb with every slip and every day late, while the CRA quietly builds a picture of a contractor with something to hide. Here is exactly what happens when a T5018 is not filed, and how to fix it before it costs more.

Quick Answer

If you do not file a required T5018, the CRA can charge a late-filing penalty that grows per slip and per day, up to a set maximum per slip type, plus interest. Repeated or deliberate failures raise the penalties sharply and can trigger a review of your whole return. The fix is to file the outstanding slips promptly, since penalties keep building until you do.

The Honest Answer: The Cost Grows the Longer You Wait

A T5018 is not a tax payment, it is an information return, but the CRA treats a missing information return seriously. The penalty is not a flat charge. It rises with the number of slips you failed to file and the number of days you are late, so a contractor with many subcontractors can face a real bill from a single missed filing. The longer the slips sit unfiled, the larger the exposure grows. We handle T5018 filing and construction accounting for incorporated contractors across Ontario.

Lower Risk Situation	Higher Risk Situation
Few subcontractors, slips filed on time	Many subcontractors, slips missed
First-time, promptly corrected	Repeated years of non-filing
Complete records of contract payments	Cash payments with no paper trail
Filed shortly after the deadline	Months or years past the deadline
Accurate subcontractor details	Missing or wrong subcontractor numbers

What the CRA Can Actually Do

A missed T5018 is not just a fee. It opens the door to interest, a closer look at your return, and questions about whether the subcontractor payments were reported at all. These are the consequences that cost contractors the most.

Consequence	What It Means for You
Late-filing penalty per slip	A daily penalty that grows with the number of slips and days late, up to a maximum for that slip type.
Interest on amounts owing	If the filing failure ties to unremitted or unreported amounts, interest compounds daily until paid.
Repeated failure penalties	Failing again after a prior penalty pushes the CRA toward larger, escalated charges.
Trigger for a wider review	A missing T5018 can prompt the CRA to examine your expenses, payroll, and subcontractor treatment.
Subcontractor status questions	The CRA may test whether your subcontractors are truly self-employed or should have been on payroll.

The per-slip structure is what catches contractors out. A single missed T5018 filing covering many subcontractors is not one penalty, it is a penalty calculated across every slip, growing each day. A contractor who paid twenty subcontractors and filed nothing can face a far larger charge than they expect from what feels like one late form. Know Your Exact Fee →

Who Actually Has to File a T5018

Not every business needs to file. The obligation applies where construction is your primary activity and you pay subcontractors for construction services. If that is not you, the T5018 may not apply at all, and there is no point worrying about a form you do not owe.

Your Situation	Do You File a T5018
Construction is your main business activity	Yes, for reportable subcontractor payments.
You pay subcontractors for construction services	Yes, once payments cross the reporting threshold.
Construction is only a minor part of your business	Often no, though it should be confirmed.
You pay only employees, not subcontractors	No T5018, but payroll and T4 rules apply instead.

The cheapest fix is the one you make before the CRA calls. Many contractors do not realise the T5018 obligation exists until a review surfaces years of missed slips at once. Filing late voluntarily, before the CRA raises it, keeps you in a far better position than being assessed. If you have unfiled slips sitting in the background, please deal with them now rather than waiting.

Fixing Missed T5018 Filings

Unfiled T5018 slips can be brought current, and doing it properly matters. The goal is to file the outstanding slips, stop the penalty from growing, and where the failure is genuine, put yourself in line for relief. This is the point where most contractors bring in a CPA.

Fixing Step	Why It Matters
File the outstanding slips promptly	Penalties keep accruing until the slips are filed, so speed directly limits the cost.
Reconcile subcontractor payments	The slips must match what you actually paid, so the underlying records need to be clean first.
Consider the Voluntary Disclosures Program	Where the failure is genuine and unprompted, relief from penalties may be available.
Review subcontractor versus employee status	Getting this right avoids a separate, larger payroll assessment down the line.

Ignoring a missed T5018 does not make it go away, it makes it grow. Contractors sometimes assume that because no tax is owing on the form itself, a missed T5018 is harmless. It is not. The penalty accrues, the CRA notices the gap, and a small information-return miss can become the thread that unravels a full review of your subcontractor costs. Deal with it early and the outcome is almost always smaller.

Case Study: Two Years of Slips That Never Went In

A small construction corporation had paid a steady group of subcontractors for two years without filing a single T5018, unaware the obligation applied to them. When they came to us to clean up their books, the exposure across every unfiled slip over both years had built into a meaningful penalty risk, growing with each passing month. We reconciled the subcontractor payments, prepared and filed the outstanding slips, and submitted a request under the relief provisions given the failure was genuine and brought forward voluntarily. The penalties were reduced substantially, and we estimate the approach saved roughly $6,300 against what a straight assessment would have cost. The figures are illustrative of the kind of outcome we see, not a specific client file.