Construction Bookkeeping in Québec: CCQ, RBQ, the T5018 and the Taxes Contractors Miss

Construction is one of the most heavily reported industries in Canada, and Québec adds a second layer on top of the federal one. A general contractor we work with came to us after a Revenu Québec letter about subcontractor reporting — the books were fine for income tax, but nobody had been filing the slip that flags subcontractor payments, and the catch-up spanned two years. Nothing about the work was dishonest; the reporting rules for the trade simply weren’t set up. This guide walks through the four fronts that trip up Québec contractors: licensing and registration (RBQ and CCQ), the T5018 subcontractor slip, GST/QST — especially on holdbacks, and job costing plus the employee-versus-subcontractor question that drives most audits.

Do you need an RBQ licence and CCQ registration?

These are two different bodies with two different jobs, and you often deal with both.

• RBQ (Régie du bâtiment du Québec) issues the contractor’s licence. In general, you must hold an RBQ licence — as a general or specialized contractor — before you bid on or carry out construction work in Québec. Licences are renewed on a schedule and renewal fees apply. Electrical and some gas work runs through a separate body (the CMEQ/CMMTQ), not the RBQ.
• CCQ (Commission de la construction du Québec) administers Act R-20, which governs labour relations, training and workforce management on most construction sites. If you do construction work covered by R-20, you register as an employer with the CCQ. Registration ties to your RBQ licence number and your Québec enterprise number (NEQ).

Why a bookkeeper cares: the CCQ asks who keeps your books and produces your reports, so your accounting function is part of your CCQ employer file. And the two numbers — RBQ licence and CCQ registration — have to be consistent with what you put on invoices, bids and tax filings. If you’re just starting, our guide to starting a business in Québec covers the NEQ and structure choices that come first.

The T5018: the slip that catches most contractors

The T5018, Statement of Contract Payments, exists specifically to flag payments in the construction sector and reduce the underground economy. It is the single most-missed filing in the trade, and the rules are precise.

Do you have to file one?

You must issue a T5018 (or an equivalent listing) when all three of the following are true:

• More than 50% of your business income is from construction activities. If construction is not your primary income — say you’re a gas company that happens to build pipelines — you report subcontractor fees on a T4A instead, not a T5018.
• You paid a subcontractor who is a resident of Canada for construction services (performed inside or outside Canada). Payments to non-resident subcontractors go on a T4A-NR, never a T5018.
• Total payments to that subcontractor in the period were more than $500, not including GST/HST.

“Construction activities” is broad — the CRA’s own list runs from framing, roofing, drywall, concrete and excavation to plumbing, electrical, HVAC, paving and demolition. Payments for goods only are not reported; it’s payments for services (or services plus materials) that count. If a person works for you both as an employee and as a subcontractor, the employment pay goes on a T4 and the subcontract work on a T5018.

The GST/HST trap in Box 22

This is where good books go wrong. The $500 reporting threshold is tested excluding GST/HST — but the amount you actually report in Box 22 includes GST/HST and PST/QST. So you test the net, then report the gross. Getting those backwards either triggers slips you didn’t owe or understates the ones you did.

When it’s due

You pick your reporting period — the calendar year or your fiscal period — and the T5018 return is due 6 months after the end of that period. That’s unlike T4s (end of February); contractors who assume a February deadline file late. Amounts are reported on a paid (cash) basis — the year the payment was made, not when the invoice was dated — and always in Canadian dollars.

What happens if you don’t file

Late slips carry penalties from $100 up the CRA’s per-slip scale. More seriously, the CRA singles out the construction sector: a contractor who plans with subcontractors to conceal payments can face criminal prosecution and penalties of up to 200% of the tax avoided. If you have missed years, file them — our catch-up and late-filing guide explains how, and our contractor bookkeeping service runs the T5018s with your year-end so they’re never late again.

CCQ reporting and the records you must keep

If you employ workers on R-20 construction, the CCQ expects ongoing reporting, and your books feed it:

• A monthly report of employees’ hours worked.
• A daily activity register and payroll records, kept for the retention period Revenu Québec requires (generally six years).
• Deductions and contributions handled through the CCQ for construction employees — which is why construction payroll is not the same as ordinary Québec payroll (RL-1, CNESST and QPIP still apply, but the CCQ layer sits on top).

Construction payroll is specialized enough that it’s worth keeping separate from your general books. Our payroll service and the Québec payroll checklist cover the RL-1/T4, CNESST and source-deduction side; the CCQ monthly report sits alongside it.

GST/QST for contractors — and the holdback timing rule

Like any Québec business, you generally must register for GST and QST once your taxable sales pass $30,000 over four consecutive calendar quarters, and in construction you’ll almost always cross it. Revenu Québec administers both taxes. Our free GST/QST calculator and the GST/QST guide cover registration and filing.

The piece specific to construction is holdbacks. On most construction contracts, the customer retains a holdback (often around 10%) until the work is accepted. Under the federal rules, GST/HST on a holdback generally is not payable until the holdback is paid or the holdback period under the contract or the applicable lien legislation expires, whichever comes first — and the QST follows the same logic. In plain terms: you usually don’t remit the tax on the retained 10% until you actually receive it. Contractors who invoice the tax on the full amount up front end up financing Revenu Québec out of their own cash flow. Tracking holdbacks receivable and payable separately is one of the highest-value things a construction bookkeeper does.

Job costing, progress billing and holdbacks on the books

General bookkeeping tells you whether the company made money. Job costing tells you whether the job made money — and in construction, that’s the number that matters. A proper construction set-up tracks:

• Cost by job and phase — labour, materials, subcontractors and equipment coded to each project, so you can compare actual cost to the estimate while there’s still time to act.
• Progress billing and work-in-progress — revenue recognized as the job advances, not just when you invoice.
• Holdbacks receivable and payable — the money retained from you, and the money you retain from your subcontractors, tracked separately from ordinary A/R and A/P (and remember the GST/QST timing above).
• Subcontractor files — each sub’s business number, GST/QST registration status, RBQ licence and CCQ standing, and payment history, so your T5018s are a byproduct of the books rather than a year-end scramble.

Employee or subcontractor? The most expensive question in the trade

Calling a worker a “subcontractor” doesn’t make them one. If the relationship is really employment, the CRA and Revenu Québec can reassess years of unremitted source deductions, QPP/QPIP and CNESST — plus interest and penalties — and the CCQ has its own competency-certificate rules for who may perform construction trades on a site.

The test looks past the label to the substance of the relationship: control over how and when the work is done, who provides the tools and equipment, the worker’s chance of profit and risk of loss, and how integrated they are into your business. One important Québec wrinkle: the province applies its own Civil Code analysis, so a worker can be treated differently for Québec purposes than for federal purposes, and a written “subcontract” won’t save a relationship that functions like employment. If you’re not sure, get the classification reviewed before the worker starts, not after an audit — our employee-vs-contractor guide goes deeper, and we review classifications as part of onboarding.

How we set up contractors

We build construction clients on a job-costed ledger from day one: subcontractor files that generate T5018s automatically, holdbacks tracked on both sides with the GST/QST timing handled, CCQ-ready payroll, and GST/QST and year-end filed on schedule. If your books are behind or a Revenu Québec letter already arrived, we catch up quietly and set up the reporting so it stays clean. See contractor bookkeeping in Montréal or talk to us — no obligation. This guide is general information; your situation deserves a direct conversation.

Frequently asked questions

Sources

• CRA – T5018 slip, Statement of contract payments (who files, $500 threshold, Box 22, T4A-NR)
• CRA – When to file information returns (T5018 due 6 months after period end; penalties)
• CRA – T5018 Summary, Statement of contract payments
• Income Tax Regulations – s. 238, Reporting of Payments in Respect of Construction Activities
• CCQ – Being an employer (Act R-20, registration, records)
• CCQ – Keeping a daily activity and payroll register
• CCQ – Registering with the CCQ
• RBQ – Obtaining a contractor licence
• Revenu Québec – Registering for the GST and QST (small-supplier $30,000 threshold)
• CRA – GST/HST, holdbacks (time of liability for tax on holdbacks)
• CRA – RC4110, Employee or self-employed?
• Revenu Québec – Employee or self-employed person?
• Mallette – Understanding T5018s (secondary, for context)

Keep reading

• How to Do Payroll in Québec (2026): Steps and Real Employee Cost
• GST/QST for Québec Small Businesses (2026): How It Works
• Self-Employed Tax in Québec (2026): Rates, Deadlines, T2125, TP-80
• Month-End Close Checklist for Small Businesses (2026)
• How to File Your Tax Return in Québec: 2026 Tax Year Guide