As a business owner, you need to file T4 and T5 information returns with the Canada Revenue Agency (CRA) if you pay salaries, wages, or dividends to employees or shareholders. These forms help ensure that all payments are properly reported for tax purposes. Here’s a simple guide to help you prepare the information needed to file your T4 or T5 return.

What is a T4 Return?

A T4 slip is used to report employment income, such as salaries or wages, that you paid to your employees. It includes important information like the total salary paid and payroll deductions, such as income tax, Canada Pension Plan (CPP), and Employment Insurance (EI) contributions.

What is a T5 Return?

A T5 slip is used to report any investment income, such as dividends or interest, that your corporation paid to shareholders. If your corporation has issued dividends or if shareholders have received other types of investment income, you must complete a T5 return.

Information You’ll Need to Gather

To prepare your T4 or T5 return, make sure you have the following details ready:

For T4 Returns:

  • Business Number (BN) and Corporation Name
  • Total Salary Paid to each employee
  • Payroll Deductions: Income tax, CPP, and EI contributions
  • An Excel Spreadsheet showing salary, payroll deductions, and payments made to the CRA

For T5 Returns:

  • Total Eligible Dividends paid to shareholders
  • Total Non-Eligible Dividends paid to shareholders
  • Interest from Canadian Sources (if applicable)
  • Capital Gains Dividends (if applicable)

Make sure that the information for each recipient (employee or shareholder) is complete and accurate. This includes their name, address, SIN, and total amounts paid in salaries or dividends.

Why is Filing T4 and T5 Returns Important?

Filing your T4 and T5 returns ensures that your business remains compliant with CRA regulations. Failing to file these returns on time can result in penalties and interest charges. It’s important to ensure that all employment and investment income is properly reported and that you submit the required forms by the deadline.

Let GTA Accounting Help You

Preparing T4 and T5 information returns can be time-consuming, especially if you’re managing multiple employees or shareholders. At GTA Accounting, we can help you gather the necessary information, complete the required forms, and file your returns with the CRA. Contact us today to ensure that your T4 and T5 returns are filed accurately and on time.