Service Fee Reporting: What Trucking Businesses Need to Know

February might be short, but compliance season isn’t.

If your business pays contractors, carriers, or other service providers, there’s an important tax reporting rule you can’t ignore, and starting in 2025, enforcement is getting stricter for the trucking industry.

Here’s what you need to know to stay compliant and avoid penalties.

First, what is service fee reporting?

It’s a legislated requirement for businesses to report certain service payments made to other businesses.

If you pay more than $500 in a year to a business for services, you must report the total in Box 048 on a T4A slip.

The goal? To help the Canada Revenue Agency (CRA) verify that income and expenses are being reported accurately across businesses.

Big Change: Trucking Industry Penalties Return in 2025

For several years, the CRA paused (or placed a moratorium on) penalties related to T4A reporting in the trucking sector.

That’s now changing.

Starting with the 2025 tax year:

• Trucking businesses → Penalties will apply
• All other industries → Moratorium continues

This means trucking businesses should expect stricter enforcement if T4A slips are not filed correctly or on time. This applies to the businesses paying for the services (the payer) and the Canadian-Controlled Private Corporation (CCPC) receiving the payments (the payee)

Does Your Business Count as “Trucking”?

Not every company that occasionally hauls goods qualifies.

A business is considered to operate in the trucking industry only if trucking is its primary source of income.

CRA definition of “primary source”

• More than 50% of total income-earning activities

Examples

Considered trucking:

• A carrier that mainly transports freight

Not considered trucking:

• A construction company that occasionally delivers materials
• A business with multiple revenue streams where trucking is minor

If trucking is not your main activity, the new penalties don’t apply.

What Activities Count as Trucking?

Applicable trucking activities (subject to new penalties)

These include local and long-distance freight transportation, such as:

• General freight
• Specialized freight
• Construction materials
• Hazardous materials
• Heavy machinery
• Oversized loads
• Consumer goods (food, beverages, clothing)
• Livestock
• Lumber and raw materials
• Refrigerated goods
• Furniture trucking
• Machine parts
• Roofing materials and windows
• Freight brokers/intermediaries
• Staffing agencies supporting freight movement

What Activities Do NOT Count?

The following transportation services are not considered trucking for this rule:

• Air transportation
• Rail transportation
• Water or marine transportation
• Ferry services
• Pipeline transportation
• Scenic/sightseeing transport
• Postal services
• Couriers and messengers
• Warehousing and storage
• Charter buses
• School/employee buses
• Taxi or limousine services
• Urban transit systems
• Passenger transportation
• Transportation support services (except freight brokerage)

Who Must Issue a T4A?

Here’s a quick breakdown:

Payee Type	T4A Required?	Subject to 2025 Trucking Penalties?
CCPC in trucking industry	YES (mandatory over $500)	YES
Non-CCPC corporation	Usually YES	NO
Sole proprietor / unincorporated driver	YES	NO
Employee	NO – issue T4 instead	NO

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Key Takeaways for Businesses

If you operate in trucking and are a CCPC:

• Track all service payments
• Issue T4A slips for payments over $500
• Confirm whether vendors are contractors vs employees
• Prepare for renewed CRA enforcement in 2025

If you’re outside trucking:

T4A rules still apply. But penalties remain paused for now. The reporting requirement itself isn’t new, but enforcement is tightening where it matters most.

For trucking businesses especially, this is a good time to:

• Review contractor lists
• Confirm classifications
• Update bookkeeping systems
• Avoid preventable penalties

When in doubt, checking your compliance now is far easier than dealing with CRA penalties later.

Make Compliance Easier, Not Harder

Let’s be honest, tracking contractor payments, monitoring thresholds, and preparing T4A slips manually can get messy fast, especially for transportation businesses juggling multiple drivers, carriers, and vendors.

This is where having the right tools makes a big difference.

Platforms like PaymentEvolution can help automate contractor payments, generate T4A slips, and simplify year-end reporting, reducing the risk of missed filings or costly penalties. Instead of scrambling at tax time, your reporting is handled as part of your regular payroll and payment process.

With penalties returning for the trucking industry, proactive compliance isn’t just smart, it’s essential.