T5 Slips Explained: Reporting Dividends to Yourself

If you pay yourself dividends from your corporation, a T5 slip is how CRA finds out. It's the dividend equivalent of a T4 — the corporation issues it, you receive it, and the numbers on it are what actually show up on your personal tax return.

What a T5 Slip Actually Does

A T5 reports investment income, and dividends from your own corporation fall under that umbrella. The corporation is the issuer, you (or any other shareholder receiving dividends) are the recipient, and one copy goes to CRA while another goes to you for your personal return.

Before any of that happens, though, the dividend has to actually exist properly: it should be formally declared through a director's resolution and recorded in the corporation's records. The T5 reports the dividend — it doesn't create it.

The slip splits dividends into two categories, and mixing them up is the single most common T5 mistake:

For dividends other than eligible dividends:
Box 10 = actual dividend
Box 11 = taxable dividend (grossed up by 15%)
Box 12 = federal dividend tax credit

For eligible dividends:
Box 24 = actual dividend
Box 25 = taxable dividend (grossed up by 38%)
Box 26 = federal dividend tax credit

The basic idea behind the split is how the corporation's income was taxed before the money reached you. Non-eligible dividends are generally connected to income that benefited from the lower small-business corporate tax rate. Eligible dividends can generally be paid when the corporation has what's called eligible-dividend capacity — essentially, corporate income that's already been subject to higher-rate corporate tax, or that otherwise built up that capacity. Because more corporate tax is assumed to have happened before an eligible dividend reaches you, its gross-up and dividend tax credit are both larger.

Which category a specific dividend falls into, and whether it's properly designated as eligible, is something your accountant confirms based on the corporation's actual tax situation — not a box you check yourself.

Example: A corporation pays its owner a $20,000 non-eligible dividend in July. Come tax season, the T5 shows $20,000 in Box 10, $23,000 in Box 11 (the 15% gross-up applied), and the corresponding dividend tax credit in Box 12 — filed with CRA by the end of the following February. The amount in Box 11 is the number that flows onto the personal tax return as income; Box 12 is what reduces the tax otherwise owing on that income.

How to Manage This Ongoing

Get the year right. Don't assume the T5 year is determined solely by when cash leaves the corporate bank account. The timing can depend on how and when the dividend was declared, became payable, or was credited to the shareholder. This becomes particularly important with dividends declared around December 31 — make sure the corporate records and bookkeeping agree on which year the dividend belongs in before issuing the T5.

Mark the filing deadline. T5 slips and the accompanying summary are due to CRA, and to the recipient, by the last day of February following the calendar year the dividend was paid in — subject to CRA's next-business-day rule if that date falls on a weekend or recognized holiday. Dividends reportable for 2026 need their T5 filed by the end of February 2027 — not April, not the personal tax deadline.

Know when a T5 isn't actually required. CRA doesn't require a T5 slip if the total paid to one recipient for the year is under $50. That's a narrow exception in practice for most owner-managers, since dividends usually run well above that — but it exists.

If you're issuing more than five T5 slips, they need to be filed electronically — most owner-managed corporations won't hit that threshold, but it's a clean rule to know.

Late filing has real penalties. CRA's legislated late-filing penalty is based on a daily amount and the number of slips involved, but CRA currently applies administrative relief for smaller filers: 1 to 5 late T5 slips generally result in a flat $100 penalty, with a different, escalating structure starting at six slips. It's not a rounding error to skip — it's a real, scheduled cost.

Watch where dividends connect to the rest of your books. If dividends are being regularly declared but not properly recorded against retained earnings (the accumulated profit the corporation has kept, rather than paid out) or a shareholder loan account, the T5 is often where the gap surfaces — CRA's copy won't match what your books show, which is exactly the kind of mismatch worth catching before it becomes a bigger cleanup.

If the T5 Was Wrong or Never Filed

If a T5 was filed with an error — wrong box, wrong amount, wrong dividend type — it can be amended. Amended and cancelled slips follow their own CRA process separate from just refiling the original, so this is worth handling with your accountant or bookkeeper rather than guessing at the correction yourself.

If a T5 simply wasn't filed for a dividend that should have been reported, file it as soon as the omission is discovered. Late-filing penalties can apply and are subject to maximums, so leaving it unfiled doesn't solve the problem — filing late is still better than continuing to leave it outstanding.

If you're not sure whether a past dividend was ever properly reported on a T5, that's worth confirming rather than assuming it was handled — especially if bookkeeping and tax filing have been split between different people or changed hands at some point.

FAQ

Do I need to issue a T5 for a small dividend?
Not always. CRA says you don't have to prepare a T5 slip when the total amount paid to one recipient for the year is less than $50. That doesn't mean the income becomes tax-free — taxable income still has to be reported even when no T5 slip is required.

What's the actual difference between eligible and non-eligible dividends, in plain terms?
The basic difference is the corporate tax treatment that happened before the dividend reached you. Non-eligible dividends are generally connected to income that benefited from the lower small-business corporate tax rate. Eligible dividends generally require the corporation to have eligible-dividend capacity, which is usually connected to income that faced higher-rate corporate tax. That's why eligible dividends get a larger gross-up and dividend tax credit.

What happens if I file the T5 late?
CRA can assess a late-filing penalty. Under its current administrative relief policy, 1 to 5 late T5 slips generally result in a flat $100 penalty; a different, escalating structure applies starting at six slips.

Can I fix a T5 after it's been filed?
Yes — amended and cancelled slips are a normal part of the process when something needs correcting. It's worth handling through your accountant or bookkeeper rather than resubmitting informally.

Follow the system. File with confidence.