Painting contractor payroll: crews on T4s, sub-crews on T5018s, WSIB in between

Two labour models, two payrolls

The employed crew is model one: a lead painter and helpers on T4s, hours tracked, CPP, EI and tax remitted, WSIB premiums paid on their earnings. Model two is the sub-crew: an incorporated or registered outfit that prices the work, brings its own sprayers, ladders and drop sheets, fixes its own deficiencies on its own dime, and paints for other builders when your board is empty. Sub-crews invoice you and receive T5018s. Everything CRA cares about is whether the label matches the reality.

The version that fails review is common in painting: a "sub-crew" that is really two people with rollers, paid a day rate, on your schedule, out of your paint, carrying zero quote risk. That is an employed crew wearing an invoice, and when CRA agrees, the reassessment lands with both shares of CPP and EI, penalties, interest, and often an ESA vacation-pay claim riding behind it. If a crew of yours fits that description, we move them onto T4 payroll deliberately — before an auditor does it retroactively.

The T5018 applies to painters, not just builders

Painting is construction for CRA's reporting rules. If construction work is your primary source of business income, each subcontractor paid $500 or more in your reporting period gets a T5018, with amounts reported GST/HST-included and the return filed within six months of your chosen period end. CRA matches these slips against what sub-crews declare, and the matching cuts both ways: a sub who under-reports gets flagged, and a payer whose slips do not reconcile invites a look at the entire labour file. Paying crews in cash with no slips at all is the worst position available — the expense gets challenged and the classification question arrives with it. We set the reporting period once, keep a running subcontractor ledger through the year, and issue the slips from the same records that support your expense claims, so filing season is an export rather than a reconstruction.

WSIB: coverage is mandatory, clearances are your shield

Ontario's compulsory construction coverage reaches painting contractors. Independent operators, sole proprietors and partners in construction generally must carry their own WSIB coverage — the main exception is a narrow one for those doing only home-renovation work hired and paid directly by the occupant. Two payroll consequences follow. First, premiums are payable on your employed crews' insurable earnings at your rate class, so they belong in every quote you price. Second, no sub-crew should start a job before you hold a valid clearance certificate, and another before final payment — without one, their unpaid premiums can become your account's problem. We make the clearance pull a standing step in the payables run, not a memory test for whoever cuts the cheque.

Production pay with a floor under it

Most painting crews earn production pay — per square foot, per unit, per door. That works fine on T4 payroll as long as three anchors hold: production earnings average at least minimum wage over the hours actually worked, vacation pay accrues on the gross production earnings, and overtime after 44 hours gets calculated when the push weeks come. Here is how the common arrangements sort out:

Where painting payroll meets the rest of the business

Labour is the biggest number on a painting job, so payroll has to land in job costs, not just in a remittance. We wire per-job labour — burdened with employer CPP and EI, WSIB and vacation accrual — into the same structure as our painting contractor bookkeeping, so a job that is bleeding hours shows up before the deficiency walk. Franchise painters carry one more layer: royalty and marketing-fund payments to a US brand come with withholding questions on the payment side, which is exactly the territory of our cross-border page for painting contractors.