The CRA hears about your revenue before you report it
Any business whose primary activity is construction must file a T5018 slip for each subcontractor paid $500 or more, and an electrical sub working for GTA builders collects several of them a year. The CRA runs those slips against the revenue on your T2, and the mismatches it flags are usually not fraud but arithmetic: most GCs report the gross amount paid, including HST, while your revenue line is booked net of it, and a builder reporting on its own fiscal period never lines up neatly with your year-end.
So we treat the reconciliation as part of the filing rather than a response to a letter. Slip totals get tied to the general ledger before the T2 goes out, the HST portion identified, timing differences noted and kept on file. If a matching query arrives anyway, the answer is one page long and already written.
Slips also arrive late and occasionally wrong. We compare them against your own invoice register, and when a builder has overstated an amount we ask for the amendment before the CRA does the comparing for us.
HST timing on draws, deposits and holdbacks
On progress-billed work, HST is payable on the earlier of the day you issue the draw invoice and the day you are paid. A December draw belongs in the December reporting period even if the GC pays in February, which is exactly the gap that turns into arrears interest when invoicing and filing are not talking to each other.
The exception that saves cash: HST on the 10% holdback retained under Ontario's Construction Act is not due until the holdback is paid or becomes payable. Billing setups that charge tax on the full draw, holdback included, remit months early for no reason, so we configure the invoices to make the deferral real. Income tax mirrors it: holdback receivables are generally not income until you have the legal right to collect them, usually on certification. The deep version of holdback and WIP accounting lives on our general contractor pages; for a sub it mostly means year-end revenue gets a holdback review before the return is final.
The filing year, in one place
Most incorporated electrical contractors are CCPCs paying roughly 12.2% combined on their first $500,000 of active income, which makes the calendar the main risk: late filings and missed instalments cost real money that no planning claws back. Our Corporate Tax Filing work runs on these dates:
| Filing | When it lands |
|---|---|
| T2 corporate return | Six months after the corporation's year-end |
| Corporate tax balance | Three months after year-end for most CCPCs claiming the small business deduction |
| Corporate instalments | Monthly, or quarterly for eligible small CCPCs, once tax payable passes $3,000 |
| GST/HST return | Quarterly or annually, depending on size and election |
| T4 slips for the crew | Last day of February |
| T5018 slips you file | Six months after the reporting period you choose |
The T5018s you owe on your own subs
The reporting flips the day you sub work out: trenching, a second crew for a fit-out, a low-voltage specialist. Construction is your primary business, so payments of $500 or more per sub belong on your own T5018 information return, filed on a calendar or fiscal period and due six months after it ends. Collect every sub's business number before the first cheque clears; chasing numbers in the filing month is how returns go out late.
One caution the slip does not settle: a helper who works your schedule, in your van, with your tools, can be an employee no matter what the invoice says, and construction is a sector where the CRA actually checks. We flag those arrangements before they become payroll assessments with years of CPP and EI attached.
One engagement, both returns, and the letters
We prepare the owner's personal return alongside the corporate one so salary, dividends, slips and instalments tell one consistent story across both. How much to take out, and in what mix, is a decision made during the year, not at the filing deadline; that work sits under Tax Planning & Advisory. And when the CRA writes, CRA Audit & Review Support answers from the working papers we filed from, which is why most letters end at the first reply.
Source: CRA — GST/HST for businesses.
