A T5 (Statement of Investment Income) reports dividends, interest, and certain foreign income earned in non-registered accounts during the calendar year. Nothing earned inside a TFSA or RRSP generates a T5 - it only applies to investment income earned outside those registered accounts.

Any institution or corporation that paid you $50 or more in investment income in a year - a brokerage, a bank, or a corporation paying dividends directly. If you hold non-registered accounts at multiple institutions, you'll receive a separate T5 from each one that meets the threshold.

Why is Box 25 on my T5 higher than the dividends I actually received?

Box 25 shows the grossed-up taxable amount of eligible dividends, not the cash amount you received. Eligible dividends are grossed up by 38% because they come from corporate income already taxed at the general corporate rate, and CRA taxes you on that grossed-up figure while providing an offsetting dividend tax credit.

What's the difference between eligible and non-eligible dividends on a T5?

Eligible dividends come from income taxed at the general corporate rate and carry a 38% gross-up with a larger dividend tax credit. Non-eligible dividends - typically paid by private corporations or small businesses - come from income taxed at the lower small business rate and carry a smaller 15% gross-up with a correspondingly smaller credit.

Is interest income taxed the same way as dividends on a T5?

No. Interest income, reported in Box 13, has no gross-up and no dividend tax credit - it's taxed dollar for dollar at your full marginal rate. This makes interest the least tax-efficient type of investment income to hold in a non-registered account, compared to eligible or non-eligible dividends.

Do capital gains show up on a T5?

No. Capital gains are reported on a different slip - typically a T3 or T5008 - and are taxed on only half the gain, rather than through the T5's gross-up and dividend tax credit mechanism.

How should a T5 change how I structure my portfolio?

A T5 is a signal about asset location. Interest-bearing holdings like GICs and bonds are taxed most heavily outside registered accounts, so they belong in a TFSA or RRSP first. Dividend-paying and growth holdings tolerate a non-registered account better, since they receive preferential tax treatment.

23 Jul 2026 7 min read Personal Finance Basics

Personal Finance Basics - Understanding T5 Tax Slips

Every February and March, a second wave of tax slips shows up in your mailbox or your CRA’s inbox. The T4 gets all the attention because everyone who's ever had a job has seen one. The T5 is quieter. It doesn't come from an employer - it comes from Questrade, your bank, or wherever else you're holding investments outside your RRSP and TFSA. Even if you have something as simple as a plain old savings account - you will likely get one. And if this is the first year you're getting one, it can be genuinely confusing.

Nobody explains this one either. You open a non-registered account, buy some dividend-paying stocks or hold cash in a high-interest savings account, and a few months later a slip appears with numbers on it that don't match what you actually received. That mismatch is not a mistake. It's the whole point of the slip.

Here's what a T5 actually tells you, and what to do with it.

What a T5 Is

A T5 - Statement of Investment Income - reports income you earned from non-registered investments during the calendar year. That's the key word - non-registered. Nothing that happens inside your TFSA or RRSP generates a T5. This slip only exists because CRA wants to tax income earned outside those two wrappers (or any other registered accounts).

Whoever paid you the income issues the slip. For most people reading this, that's Questrade or WealthSimple, but it could just as easily be a bank, another brokerage, or a corporation that pays you dividends directly. If you hold accounts at more than one institution, you'll get a T5 from each one that paid you $50 or more in a year. Anything under that threshold technically still needs to be reported by you but the payer just isn't required to send a slip for it.

Who Actually Gets One

You'll get a T5 if, in a non-registered account, you earned any of the following:

Dividends from Canadian corporations or REITs
Interest from savings accounts, GICs, or bonds
Certain foreign investment income paid through a Canadian intermediary

If your investing life is entirely inside a TFSA and RRSP, you may never see a T5. That's one of the quiet advantages of maxing those out first - not just tax-free or tax-deferred growth, but one less slip to deal with every spring.

Breaking Down the Boxes

The T5 has fewer boxes than a T4, but the ones that matter are easy to misread if you don't know what you're looking at.

Box 24 (eligible dividends) and Box 25 (taxable amount of eligible dividends) - This is where it gets non-intuitive. If a Canadian corporation paid you $100 in eligible dividends, Box 24 shows the $100 you actually received. Box 25 shows a grossed-up amount - $138, using the current 38% gross-up - because CRA taxes you on the grossed-up figure and then hands back a dividend tax credit to offset it. You're not being taxed on money you didn't get. The mechanics just look that way until you understand the credit is coming.

Box 26 (taxable amount of dividends, all types) - the total that actually lands on your tax return as income, combining eligible and non-eligible dividends after gross-up.

Box 13 (interest from Canadian sources) - No gross-up here, no dividend tax credit. Interest income is taxed at your full marginal rate, dollar for dollar. This is the box that makes interest the least tax-efficient type of investment income to hold outside a registered account.

Box 15/16/18 area (foreign income and tax withheld) - this shows up if you're holding foreign dividend payers in a non-registered account. There's usually a foreign tax credit available to offset the withholding, but that's a separate calculation on your return.

Why the Gross-Up Trips People Up

When I received my first dividends from a private corporation me, and some friends, set up to manage a few websites and games, I thought I was smart and put some money aside in my RRSP to offset my taxes. That was smart, except I didn't know about the gross-up…and I used the wrong number. I added 38%, the eligible dividend rate, when these were non-eligible dividends paid out of small-business-rate income, which only carry a 15% gross-up. I had dealt with dividends from my engineering firm before, but those were always eligible dividends already grossed up correctly by the payer's reporting. It wasn't a huge deal in the end. I'd just overestimated instead of underestimated, which is the safer way to be wrong. The gross-up trips people up!!!

The gross-up exists because dividends are paid out of corporate profits that have already been taxed once, at the corporate level. The gross-up and dividend tax credit together are CRA's way of avoiding double taxation - roughly approximating what your rate would have been if you'd earned that income directly instead of through a corporation. The result is that eligible dividends are taxed more favourably than interest at almost every income level. It's one of the few places in the tax code where the mechanism working against you on paper (a bigger number in Box 25) is actually working in your favour once the credit applies.

Why This Matters for Your Planning

A T5 isn't just a slip to plug into TurboTax and forget. It's a signal about how efficiently your portfolio is structured.

Asset location matters more than most people realize - Interest income gets taxed in full. Eligible dividends get preferential treatment. Capital gains (which don't show up on a T5 at all - that's a T3 or T5008 situation) are taxed on only half the gain. If you're holding GICs or bonds in a non-registered account while your TFSA is sitting in an equity ETF, you likely have it backwards. Interest-bearing assets belong in registered accounts first; dividend payers and growth holdings can tolerate a non-registered account better.

Dividend income can quietly affect income-tested benefits - Because of the gross-up, dividend income inflates your net income on your tax return by more than the cash you actually received. That grossed-up figure is what's used for calculating things like the OAS clawback threshold - which I wrote about in the OAS post. If you're structuring a retirement income plan around dividend-paying non-registered holdings, the gross-up is a detail worth modelling, not skipping. This can cost you!

This is exactly why TFSA and RRSP room matters before you build a taxable portfolio - Every dollar of dividend or interest income earned inside a TFSA generates zero T5 slips and zero tax. The same holding in a non-registered account generates one every year, indefinitely, whether you sell or not. If you're still filling registered room, the T5 is a reminder of what you're avoiding by doing so.

The Short Version

A T5 reports investment income - dividends, interest, some foreign income - earned in non-registered accounts.
You'll get one from every institution that paid you $50 or more in a year.
Eligible dividends get a gross-up (currently 38%) and a dividend tax credit, making them more tax-efficient than interest.
Interest income is taxed in full at your marginal rate - the least efficient type of investment income outside a registered account.
Capital gains don't appear on a T5 - that's a different slip (T3 or T5008) with its own rules.
The real planning takeaway - asset location. Put interest-bearing holdings in registered accounts first, and treat every T5 as a reminder of income you could have sheltered.

The T5 won't ever be as universal as the T4 - not everyone has a non-registered account, and if you're still building out your TFSA and RRSP, you may not see one for years. But once you do, it's worth understanding what it's actually telling you, instead of just typing the numbers into a box and moving on.