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Individual Tax Series: Understanding Common Tax Slips (T4, T5, T4A, T3, T5008, T4E)
- Rylan Kaliel
- Apr 9
- 4 min read
Updated: Jun 20
One of the critical aspects of accurately filing your Canadian tax return is understanding and correctly reporting the information provided on various tax slips. In this post, we'll explore the most common tax slips you'll encounter, explain their purposes, and outline how each affects your tax situation.
T4 – Statement of Remuneration Paid
The T4 slip is perhaps the most familiar to Canadian taxpayers. It is provided by your employer and details your employment income for the tax year, including:
Box 14 - Gross earnings (salary, wages, bonuses)
Box 40 - Taxable benefits
Box 16/18 - CPP and EI contributions
Box 22 - Taxes withheld at source
Carefully reviewing your T4 ensures you correctly report employment income and claim deductions or credits related to employment.
T4 slips are required to be received by yourself and the CRA generally by two months after the end of the year.
T5 – Statement of Investment Income
The T5 slip is issued by financial institutions to report income earned from investments, including:
Box 13 - Interest from savings accounts, bonds, and guaranteed investment certificates (GICs)
Box 10/24 - Dividends from Canadian investments
Box 15/16 – Foreign investment income earned, and foreign taxes paid
It's crucial to accurately include T5 information on your tax return, as failing to report this income can trigger CRA reassessments and penalties. If you have substantial investments, we would generally recommend a review and reconciliation of your investments be performed to ensure all income is accurately reported.
T5 slips are required to be received by yourself and the CRA generally by two months after the end of the year.
T4A – Statement of Pension, Retirement, Annuity, and Other Income
The T4A slip reports various income types not covered by a standard T4, typically including:
Box 016 - Pension or retirement income
Box 022 - Self-employment commissions
Box 048 – Fees for services
Box 105 - Scholarships and bursaries
Benefits from certain government programs
Understanding your T4A is vital, especially if you have multiple sources of income outside regular employment. If you are a self-employed person and receiving income for self-employment commissions or fees for services, a careful reconciliation of the amount of income you earned and comparison to these boxes should be performed.
T4A slips are required to be received by yourself and the CRA generally by two months after the end of the year.
T3 – Statement of Trust Income Allocations and Designations
Issued primarily by financial institutions or trustees, the T3 slip reports income distributions from trusts, including:
Box 26 – Investment income
Box 21 - Capital gains distributions
Box 23/49 - Dividend distributions
Ensuring accurate reporting of T3 income helps you properly calculate capital gains or losses and maximize eligible tax credits. Similar to the comments under T5, where you have substantial investments, we would generally recommend a review and reconciliation of your investments be performed to ensure all income is accurately reported
T3 slips are required to be received by yourself and the CRA generally by three months after the end of the year.
T5008 – Statement of Securities Transactions
The T5008 slip reports transactions involving securities, such as stocks, bonds, and mutual funds. Key details include:
Box 21 - Proceeds of disposition (sales)
Box 14 - Date of sale and type of security
Box 20 - Adjusted cost base (ACB) may or may not be included
Properly reporting T5008 transactions ensures an accurate calculation of capital gains or losses, which directly affects your tax liability. Where you have sales of any investments that are not denominated in Canadian currency, we would recommend special attention be taken to box 20 to ensure that the cost is in Canadian dollars and is correctly translated to Canadian dollars on the date the investment was purchased, not on the date of sale. More on this in an upcoming blog post.
T5008 slips are required to be received by yourself and the CRA generally by two months after the end of the year.
T4E – Statement of Employment Insurance and Other Benefits
The T4E slip is issued by Service Canada and reports taxable benefits received, such as:
Box 37 - Employment Insurance (EI) payments
Box 37 - Maternity, parental, and sickness benefits
Other social assistance payments
These benefits are taxable, and accurate reporting is essential to avoid reassessments or unexpected taxes owed.
T4E slips are required to be received by yourself and the CRA generally by two months after the end of the year.
How to Use Your Tax Slips Effectively
To manage your tax slips effectively, consider the following best practices:
Keep Organized: Maintain records and documentation for each slip received.
Verify Accuracy: Compare slips against personal records for accuracy. Contact issuers if corrections are needed.
Report Accurately: Clearly and accurately include all information from your slips on your tax return.
Potential Consequences of Inaccurate or Missing Information
Omitting or incorrectly reporting tax slip information can result in:
Reassessments and penalties from the CRA
Additional taxes owed, including interest
Delays in receiving refunds or benefits
CRA’s My Account
The above slips are required to be sent to yourself and the CRA. Once the CRA has received and processed these slips they should be available on the CRA’s My Account. You can view these slips on CRA My Account and most tax software will provide a CRA Auto-Fill option, which will allow you to directly import the amounts on these slips into your tax return, reducing the amount of work you have to do when preparing these returns.
As such, leveraging CRA My Account to prepare your returns is generally recommended. This service will reduce the effort required to organize your slips and reduce preparation time significantly.
Summary
Understanding and correctly managing your common tax slips (T4, T5, T4A, T3, T5008, and T4E) is essential for filing an accurate Canadian tax return. Familiarity with these slips helps you avoid errors, reduce audit risks, and ensures you claim all eligible deductions and credits.
Stay tuned for our next blog, where we'll explore dividend income, including eligible, non-eligible, and foreign dividends, and how each impacts your taxes.
KLV Accounting, a Calgary-based accounting firm, is here to help. Contact us today to enhance your financial strategy, minimize your taxes, and drive business success! For a free consultation, call us at 403-679-3772 or email us at info@klvaccounting.ca.
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