T5 Dividend Slip Deadline and Penalty Calculator 2026
You declared a dividend and never filed the slip. Work out the exact deadline for the year, the per-slip penalty, the gross-up and dividend tax credit on the recipient’s return, and the three things that matter far more than the penalty itself.
CRA penalty
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The Penalty, Step by Step
| Item | Basis | Amount |
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What the Slip Does on the Recipient’s Return
| Step | Basis | Amount |
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The Penalty Band You Fall Into
| Number of Slips | Per Day | Minimum | Maximum | Your Band |
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What Waiting Costs
| If You File | Days Late | Late Filing Penalty | Total Penalty |
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What Matters More Than the Penalty
What to Do Next
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Disclaimer: This calculator applies subsections 162(7.01) and 162(7.02) of the Income Tax Act for late filing and mandatory electronic filing of information returns, and 2026 Ontario dividend rates being a 15% gross-up with a federal credit of 6.9231% and an Ontario credit of 2.9863% for non-eligible dividends, and a 38% gross-up with a federal credit of 15.0198% and an Ontario credit of 10% for eligible dividends. Personal tax is shown at the top Ontario marginal rate, so a recipient with lower income will pay less. Interest on assessed penalties, the alternative minimum tax, provinces other than Ontario and the tax on split income are not modelled. This page is general information, not tax advice.
The Deadline Is the Last Day of February
T5 slips and the T5 Summary are due by the last day of February following the calendar year in which the dividend was paid or credited. Where that date falls on a Saturday, Sunday or public holiday, it moves to the next business day.
The same deadline applies to giving a copy of the slip to each recipient, and that is a separate obligation with its own penalty. It is also the practical deadline that matters most, because a shareholder cannot complete their own return without it.
Do I Need a T5 for Dividends I Pay Myself
Yes. A corporation that pays a taxable dividend of $50 or more to a shareholder must issue a T5, and that applies just as much when the shareholder is the sole owner and director. There is no exemption for a one-person company.
Owner-managers are the group that misses this most often, precisely because there is no payroll process running to prompt it. A salary triggers remittances, a PD7A and a T4. A dividend triggers nothing at all until February, by which time it has usually been forgotten.
Paid or credited both count. A dividend declared and credited to the shareholder loan account has been paid for T5 purposes even though no cash moved. If money simply came out of the corporation with no dividend declared, that is not a dividend at all, it is a shareholder loan, and it has a much more serious problem attached to it.
The Penalty by Slip Count
| Number of Slips | Penalty Per Day | Minimum | Maximum |
|---|---|---|---|
| 1 to 5 | Flat penalty | $100 | $100 |
| 6 to 10 | $5 | $250 | $500 |
| 11 to 50 | $10 | $500 | $1,000 |
| 51 to 500 | $15 | $750 | $1,500 |
| 501 to 2,500 | $25 | $1,250 | $2,500 |
| 2,501 to 10,000 | $50 | $2,500 | $5,000 |
| 10,001 or more | $75 | $5,000 | $7,500 |
For most owner-managed corporations the penalty is $100 and that is not the point. One or two slips attract a flat $100 however late they are. The reason to care is that an unfiled T5 usually means an unreported dividend on a personal return, and unreported income carries a penalty of 50% of the tax understated under subsection 163(2). On $150,000 of dividends that is a different order of magnitude entirely.
The Separate Penalty for Paper Filing
Since 1 January 2024, more than five information returns of one type must be filed electronically. Filing six or more on paper attracts a further penalty from $125 to $2,500 depending on volume, on top of any late filing penalty. Filing through the CRA web forms service is free and removes it entirely.
Gross-Up and the Dividend Tax Credit
A dividend is not taxed on the cash amount. It is grossed up to approximate the pre-tax corporate income, taxed at your marginal rate, and then a credit is given for the tax the corporation already paid. The two types work differently.
| Factor | Non-Eligible | Eligible |
|---|---|---|
| Paid out of | Income taxed at the small business rate | Income taxed at the general rate |
| Gross-up | 15% | 38% |
| Federal dividend tax credit | 6.9231% of the taxable amount | 15.0198% of the taxable amount |
| Ontario dividend tax credit | 2.9863% of the taxable amount | 10% of the taxable amount |
| Top Ontario rate on the actual dividend | 47.74% | 39.34% |
| Slip box | Boxes 10, 11 and 12 | Boxes 24, 25 and 26 |
Eligible Dividends and the GRIP Limit
A Canadian-controlled private corporation can only designate a dividend as eligible to the extent of its general rate income pool. That pool builds from income taxed at the general rate, not from income that received the small business deduction.
Designating more than the pool balance attracts Part III.1 tax at 20%, rising to 30% where the excess designation was made deliberately. A small corporation that has only ever claimed the small business deduction usually has no pool at all, so every dividend it pays is non-eligible.
Schedule 3 and the Dividend Refund
Taxable dividends paid are reported on Schedule 3 of the T2, which is also where the dividend refund is calculated. A corporation with a refundable dividend tax balance recovers $38.33 for every $100 of taxable dividend it pays.
A dividend paid with no T5 and no Schedule 3 entry leaves that refund unclaimed. On a corporation with investment income that has built a refundable balance, forgetting the paperwork can cost far more than it saves.
T5 or T4 for an Owner-Manager
| Factor | Salary, T4 | Dividend, T5 |
|---|---|---|
| Corporate deduction | Yes, reduces corporate income | No, paid from after-tax income |
| Source deductions | Required, with remittance deadlines | None |
| CPP | Both halves payable | None |
| RRSP room | Creates it | None |
| Employer health tax | Counts as remuneration | Does not |
| Mortgage qualification | Easiest to document | Accepted, more questions |
| Slip deadline | Last day of February | Last day of February |
The Shareholder Loan Problem Behind Most Missing T5s
Where money left the corporation and no dividend was ever declared, there is no T5 to file because there was no dividend. What exists instead is a shareholder loan, and subsection 15(2) includes the full amount in the shareholder’s income where it is still outstanding at the end of the following tax year.
The fix is usually to declare a dividend and issue the slip before that deadline passes, which converts a full income inclusion into a properly reported dividend. That has to happen inside the window, and it needs a directors’ resolution dated when the decision was actually made.
Our fee to prepare and file the slips and summary is $200, including HST. That covers the T5 slips, the T5 Summary, electronic filing and the recipient copies. Where the dividend also needs to be picked up on a personal return or reflected on Schedule 3 of a filed T2, we will tell you before starting what that adds. Full detail is on our slip preparation page.
Frequently Asked Questions
Common questions from owner-managers who declared dividends.
Related Calculators and Guides
More tools for owner-managed corporations.
Slips Filed This Week, Fixed Fee $200
Send us the dividend amounts and dates and the shareholder details. We prepare the slips and the summary, file electronically, issue the recipient copies, and tell you whether the personal return and Schedule 3 need correcting too.