Do i have to mail out t5018 to contractors

In Canada, as a general rule, you are required to issue a T4 Statement of Remuneration Paid to report the income you paid to contractors who are considered employees. However, there are some exceptions and nuances to consider.

When to issue a T4:

You must issue a T4 to contractors who are considered employees, which includes:

  1. Individuals who perform services for your business on a regular and continuous basis.
  2. Individuals who are under your direction and control.
  3. Individuals who are entitled to benefits, such as vacation pay, sick leave, or other benefits.

When not to issue a T4:

You do not need to issue a T4 to contractors who are considered independent contractors, which includes:

  1. Individuals who perform services on a one-time or occasional basis.
  2. Individuals who are not under your direction and control.
  3. Individuals who are not entitled to benefits.

T5018 vs. T4:

The T5018 Statement of Contract Payments is used to report payments made to contractors who are considered independent contractors. You are required to issue a T5018 if you paid a contractor more than $500 in a calendar year.

When to issue a T5018:

You must issue a T5018 to contractors who are considered independent contractors, which includes:

  1. Individuals who perform services on a one-time or occasional basis.
  2. Individuals who are not under your direction and control.
  3. Individuals who are not entitled to benefits.

Key takeaways:

It's essential to keep accurate records and consult with a tax professional or accountant to ensure you are meeting your obligations correctly.