Proactive Property Managament: CRA Rules For Contractors

Statement of Contract Payments - T5018

CRA (Canada Revenue Agency) is cracking down on businesses in regards to contractor services.

If you use the services of a contractor, you are required to submit a T5018 Statement of Contract Payments at the end of the year.

The threshold requirement is $500 per year per contractor. Anything less than $500 per year is considered casual work and the T5018 is optional. CRA will track the contractor’s income tax return to ensure that they claimed the full amount that was invoiced.

Contractors must have more than one client to be considered a true contractor. If you are the only client for a contractor, then they are technically an employee and subject to source deductions.

If the contractor earns less than $30,000 per year, they do not have to apply for a GST number. Any business can apply for a GST number even if they earn less than the $30,000 threshold.

Contractors can get their GST refunded known as GST Input Tax Credits or ITC’s but they need a GST number.