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CIS tax is a British idea, and Canada doesn’t have a scheme by that name. If you came here looking for it, the closest thing on the Canadian side is the T5018 slip, which construction contractors use to report what they paid their subcontractors. We assumed that’s what you’re after, since the name most often points to the UK’s Construction Industry Scheme.
The difference matters. In the UK scheme, contractors deduct money from a subcontractor’s payments and pass it to the tax office. The CRA’s T5018 pages we read describe a reporting slip and say nothing about withholding.
What is the Canadian version of CIS tax?
It’s the Statement of Contract Payments, the T5018. A contractor whose main business is construction lists the total paid to each Canadian subcontractor for the year. The CRA can then compare that figure with what the subcontractor reports as income.
So the slip is not a tax. It’s a paper trail. Nothing comes off your cheque because of it, and the tax you owe is worked out on your own return like any other business income.
| Question | What the CRA page says |
|---|---|
| Who issues the slip | An individual, partnership, trust or corporation whose business income is more than 50% construction |
| Who is listed | Canadian resident subcontractors paid for construction services |
| Payment test | Total payments in the calendar year above $500, not counting GST/HST |
| What counts | Cheque, cash, barter or offset arrangements for construction services |
| What doesn’t | Payments for goods only, and work by non-resident subcontractors |
When is the T5018 due?
The CRA’s when to file information returns page says the T5018 is due 6 months after the end of the reporting period, which is a calendar year or fiscal period chosen by the payer. For a contractor who reports on the calendar year, that means the end of June of the following year. That’s the contractor’s deadline, not yours, though a late slip is a good reason for a subcontractor to ask for a copy of what was reported.
Do I pay tax on money a contractor gives me?
Yes, as business income if you work for yourself. You report it, deduct the costs you can prove, and pay income tax plus both halves of CPP. Nobody has held anything back for you, so the whole bill lands at filing time.
That surprises new subcontractors. A cheque for $5,000 looks like $5,000 until April.
What does that tax look like on real numbers?
Take a subcontractor in Ontario with $60,000 of net business income after expenses. Using 2026 data, our engine puts federal tax at $6,192.73 and Ontario tax at $3,224.52, which is $9,417.25, or about 15.7% of the income. In Alberta the same income gives $9,171.20.
Those figures cover income tax only. CPP on self-employment comes on top, and it’s a large slice at this level. At the 2026 self-employed rate of 11.9% on income above the $3,500 exemption, it works out to about $6,723.50 on $60,000, since you pay both halves. Add the two and the rough total is $16,140.75, just over a quarter of the income, though a bit less in practice because half the CPP is deductible. The self-employed tax calculator works through the whole picture, though check its notes on what it leaves out. If you’d been on payroll instead, the payroll deductions calculator shows what an employer would have taken off.
How should a subcontractor set money aside?
Because nothing is withheld, put a share of every payment into a separate account. Based on the example above, a quarter of each cheque is a sensible ballpark until you know your real numbers. If your tax bill is big enough, the CRA expects instalments during the year, and the tax instalments calculator tells you if you’re over the line and what the four payments would be.
GST/HST is a separate matter. If you’re registered, the tax you collect belongs to the government, so keep it out of your spending money. The GST/HST calculator splits a price into the amount and the tax.
Mistakes that cause trouble
The first is treating a cash job as invisible. The T5018 exists so the CRA can match what contractors paid with what subcontractors reported, and a mismatch is easy to spot.
The second is mixing up worker and subcontractor. Whether someone is an employee or in business for themselves depends on the working relationship, not on what the two sides call it, and we haven’t tried to settle that here. The CRA has its own guidance on it.
The third is assuming the UK rules apply. If a British site tells you to register for CIS, that advice is for HMRC, not the CRA.
The fourth is not keeping your own records. If a contractor’s slip says $48,000 and your books say $52,000, you’ll want invoices and bank deposits to explain the gap.
The sources behind this page
The T5018 rules come from the CRA‘s pages on the T5018 slip and summary. The income tax figures use 2026 federal and Ontario or Alberta rates from official tax data, checked on 29 September 2026. The description of the UK scheme comes from the UK government’s own page. The filing deadline comes from the CRA page linked above.
Frequently asked questions
Is there a CIS tax in Canada?
Not under that name. CIS is the UK's Construction Industry Scheme. The nearest Canadian item is the T5018 slip, which reports payments to subcontractors.
Does a contractor hold back tax from my pay in Canada?
The CRA pages on the T5018 describe reporting only and mention no withholding. You pay tax on your own return.
Who has to issue a T5018?
Businesses with more than 50% of their income from construction that pay Canadian subcontractors over $500 in a calendar year, not counting GST/HST.
Are payments for materials on the slip?
The CRA page excludes payments for goods only. The slip covers construction services.
How much tax does a subcontractor pay on $60,000?
Our 2026 engine gives $9,417.25 of federal and Ontario income tax, before CPP on self-employment.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill