Understanding the Differences Between T4, T4A, and T5 Payroll Slips

As a student, shareholder, employee, or employer in Canada, you’ll likely encounter T4, T4A, and T5 payroll slips. While many are familiar with these forms, students and others might need clarification on their purposes. Each slip plays a crucial role in completing your income tax return, and it’s essential to understand their differences to ensure accurate filing.

What Are T4, T4A, and T5 Slips?

T4 Slip: Statement of Remuneration Paid

A T4 slip is provided by employers to report your annual earnings. If you’ve had multiple jobs, expect a T4 from each employer. Key details included are your name, address, SIN number, and employer’s information. The T4 reports your salary and deductions, such as income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums.

Important Boxes on T4 Slip:

  • Box 14: Total employment income
  • Box 16: CPP contributions
  • Box 18: EI premiums
  • Box 22: Income tax deducted
  • Box 44: Union dues (if applicable)
  • Box 46: Charitable donations

T4A Slip: Statement of Pension, Retirement, Annuity, and Other Income

The T4A slip is issued for various types of income beyond regular employment, such as self-employed commissions, pensions, and scholarships. If you receive a scholarship over $500, you’ll get a T4A. This slip includes personal and payer details and specific income types.

Important Boxes on T4A Slip:

  • Box 20: Self-employed commissions
  • Box 22: Income tax deducted
  • Box 105: Scholarships, fellowships, or study grants

T5 Slip: Statement of Investment Income

The T5 slip is used to report investment income, such as dividends and interest. Business owners and investors receive T5 slips to detail their earnings from various investments. It’s essential to include this information in your tax return to comply with CRA regulations.

Important Boxes on T5 Slip:

  • Box 10/24: Dividends received
  • Box 11/25: Taxable amount of dividends
  • Box 13: Interest income from Canadian banks
  • Box 27: Currency of income (convert to Canadian Dollars)

Why Are These Slips Important?

T4, T4A, and T5 slips collectively capture the full scope of your income for the year, ensuring you report everything accurately to the CRA. Missing any of these slips can lead to discrepancies since the CRA cross-references their copies with your return. For a stress-free tax season, consider consulting a tax expert or using professional tax services.

By understanding these payroll slips and their key components, you’ll be better prepared to complete your income tax return accurately and efficiently.

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