T4, T4A, T5, and T3 slips explained

Every spring, a small pile of tax slips shows up — some in the mail, some in your CRA My Account, some buried in your bank's online portal. Each one is a letter, a number, and a list of boxes, and each reports a different kind of income to both you and the Canada Revenue Agency. The four you are most likely to see are the T4, T4A, T5, and T3.

The letter is really just a category label. A T4 covers your employment income, a T5 covers investment income from interest and dividends, and a T3 covers income from a trust, which for most people means the mutual funds and ETFs they hold outside a registered account. The T4A is the catch-all that sweeps up everything else: pensions, self-employment commissions, scholarships, and any other income that doesn't fit the first three.

Here is what each one reports, who sends it, when it arrives, and the one timing trap that trips people up every April.

The T4 — employment income

The T4 (Statement of Remuneration Paid) is the slip almost every working Canadian gets. Your employer issues one for each job you held during the year. It reports your total employment income for the year plus everything that was withheld from your pay: CPP contributions, EI premiums, income tax, and any registered pension plan (RPP) contributions.

If you want to understand how those withholding boxes were calculated paycheque by paycheque, that is exactly what your Canadian paystub was tracking all year — the T4 is essentially the year-end summary of every stub added together. Your employer has to get it to you by the last day of February, and it flows straight onto the employment-income lines of your T1 General return.

The T4A — pensions, self-employment, and everything else

The T4A (Statement of Pension, Retirement, Annuity, and Other Income)is the miscellaneous slip. It shows up for a wide range of income that isn't regular employment:

• Pension and annuity payments
• Self-employed commissions and fees for services (common for contractors and freelancers)
• Scholarships, bursaries, and research grants
• RESP educational assistance payments
• Lump-sum payments and certain taxable benefits

So if you do contract work on the side, a client who paid you for services may issue one, and if you are a student, your scholarship or RESP withdrawal may show up on one instead. Whoever the payer happens to be, whether a pension administrator, a client, or an educational institution, they have until the last day of February to send it to you.

The T5 — interest and dividend income

The T5 (Statement of Investment Income), issued by your bank or brokerage, reports investment income earned in a non-registered account: interest from savings accounts and GICs, dividends from Canadian and foreign stocks, and certain other investment income.

One quirk: a payer generally only has to issue a T5 if you earned more than $50 of investment income from them in the year. Below that, you may not get a slip — but you are still technically required to report the income. Dividends on a T5 are split into eligible and non-eligible, which matters because they get different dividend tax credits.

The T3 — trust income (mutual funds and ETFs)

The T3 (Statement of Trust Income Allocations and Designations) reports income passed through to you from a trust. For most people, the trust in question is a mutual fund or ETF structured as a trust, which distributes interest, dividends, capital gains, and return of capital to its unitholders.

The T3 is the slip that causes the most trouble, and it's purely a timing problem. While T4s, T4As, and T5s must be issued by the end of February, T3 slips have a later deadline: 90 days after the trust's year-end. Since most fund trusts have a December 31 year-end, that pushes the T3 deadline to roughly the end of March.

The four slips, side by side

How the slips become your tax return

Every slip you receive maps onto a line of your T1 General, the personal income tax return all Canadians file: employment income from your T4 lands on the employment-income line, interest and dividends from your T5 flow to the investment-income lines (with dividends grossed up and credited), and trust distributions from your T3 slot into their matching lines. Because the CRA receives its own copy of every slip and runs an automated matching program, forgetting to report one it has on file will usually earn you a reassessment and, sometimes, a penalty.

This is why the safest approach is to wait until you have every slip before filing, then cross-check against the slips listed in your CRA My Account. The amount of tax you ultimately owe depends on your marginal tax rate, which is applied to the total income these slips add up to.

Other slips you might see

The four above cover most people, but a few others are common:

• T4E — Employment Insurance benefits, issued by Service Canada.
• T4RSP / T4RIF — withdrawals from an RRSP or RRIF (taxable in the year withdrawn).
• T5008 — securities transactions (proceeds from selling investments), used to calculate capital gains.
• T2202 — tuition paid, for the tuition tax credit.
• RRSP contribution receipts — not a T-slip, but essential for claiming your RRSP deduction.