With the February 28 deadline approaching, there could be some worries about getting these slips prepared on time. Depending on the size of your company, you should allow at least a couple of hours to complete these slips, including the summaries that must be submitted to CRA. If you have more than 10 employees or slips to prepare, you should consider getting someone else, such as Makes Cents, to prepare these for you.
The Canada Revenue Agency does have an extensive information page for employers on how to fill out and file all of the T4 information. There is quite the extensive amount of information, including all of the normal information as well as exemptions, deferred income, amending, and information on penalties and more. Go to their site now for more reading on this.
The T5 slip, for those of you who are unfamiliar with it, is the slip that is used for investment information. Most people will see one of these if they have open (non-RSP) investments that make money in the year, whether it’s interest income, dividends, or capital gains. What a lot of people, including some small business owners, are unaware of is that when a corporation pays dividends to its shareholders, this slip must be filled out, and the corporation must also file a T5 summary to CRA.
There are options for business owners on how to pay themselves. The easiest, for most people, is to take a salary, which requires monthly submission of personal tax with-holdings However, there is also the option of dividends. Dividends are paid out from the corporation’s retained earnings – the amount of money left after corporate taxes are paid. If you choose this option for paying shareholders, it is required that the T5 information slip and summary be done before the February 28 deadline of the year they are paid in (for 2012, this deadline is February 28, 2013). The CRA has a webpage with more information about this here. There you can read all about the T5 slip, deemed dividends, and more. If these things are confusing for you, then you will need help from a professional. And that’s where we come in!