Every January and February, businesses (or their accountant) are busy preparing T4s and T5s for their employees and shareholders. Both of these information slips are required by CRA by the end of February. If they are not filed on time there are late filing penalties that will be assessed. The minimum penalty for late filed T4s and T5s is $100 for one to five slips. This amount increases based on the number of days late and the number of slips above 5.
The above penalties are in place to ensure individuals receive their information slips to file their personal tax returns on time. Most people know that T4s are for employed individuals although self-employed commissions can appear on them as well. T5s are used to primarily to report dividends and interest. T4 summaries are used to check whether source deduction remittances to CRA during the year equal what is reported on the individual T4s. As well, CRA does annual pensionable and insurable earnings reviews to check source deductions.
If you are a shareholder you can always pay more source deductions by January 15th to increase your wage to cover any shareholder loan draws taken from the corporation during the year. Talk to your accountant about what works best for your individual situation.