I know filling out tax returns can be a bit tricky and complicated. For most people, April tends to be just a tad more stressful than it really has to be.
There is a lot that goes into preparing a proper tax return, especially if you’re planning to save some money and do it yourself.
But even if you’re working with a licensed professional, it’s best to be aware of the basics of your annual taxes to make sure that you are not underreporting or overpaying.
In today’s post, I’m going to go over a very common question regarding Canadian tax returns: “What is line 10100 on a tax return in Canada?”
Line 10100 is a section where you enter your employment income from the previous year. This includes the aggregate of all your salaries and wages, commissions, tips, bonuses, and honorariums from all of your income streams.
Usually, one’s employment income is shown in box 14 of the T4 slip they receive from their employer.
What Is Line 10100 (formerly 101) On Your Tax Return in Canada?
Up until the 2019 tax year, Line 10100 used to be numbered 101. Some people may still refer to it as line 101. However, the correct corresponding line number is now 10100.
This is a section on your annual tax return form indicating your employment income details for the tax year you are reporting. Canadian tax years run from January to December.
For most people, this line will simply include income from all T4 slips you receive from your employer(s). You can find your total employment income from a given employer in box 14 of your T4 slip. If you worked multiple jobs in a given tax year, the sum of your box 14 amounts from all T4 slips will make up your line 10100.
By law, all businesses that have employees must file their T4 information with the CRA and distribute employee T4 slips on or before the last day of February (following the calendar year to which the information return applies).
If the last day of February falls on a weekend or holiday, the T4 slips will be due the next business day.
It’s important to note that line 10100 is your income from employment (whether it’s regular or self-employment) and does not necessarily represent your total income for a tax year.
Your total gross income will be written on line 15000 of your tax return, which includes things such as your rental income, taxable scholarships or bursaries, investment income, RRSP income, Old Age Security (OAS), Guaranteed Income Supplement (GIS), Employment Insurance (EI), or other sources of taxable incomes.
Failure to report the entirety of your taxable income on line 10100 and/or line 15000 of your tax return may result in penalties and/or interest charges on your unpaid tax balance.
Is Line 101 the same as Line 150 on Your Tax Return?
No, Line 101 and 150 on your tax return are not the same.
Now referred to as lines 10100 and 15000, line 10100 (formerly 101) represents a tax-filers income from employment, whereas line 15000 (formerly 105) represents their total income from all income sources.
This means that line 10100 (your employment income) is included in line 15000, along with all your other sources of income.
For instance, other sources of taxable income that may be included in line 15000 are employment income not included in any T4 slips, rental income, taxable scholarships, bursaries or awards, investment income, RRSP withdrawal income, Old Age Security (OAS), Canada or Quebec pension plans, Guaranteed Income Supplement (GIS), Employment Insurance (EI), or other sources.
As such, line 15000 on your tax return cannot be less than the amount indicated on line 10100. They may be equal if the only income you have had for a given tax year is from employment.
When filing your tax return, you must have all of this information on hand in order to complete your forms correctly and lawfully.
If you’ve ever applied for a loan or mortgage through a financial institution, you have likely been asked about line 15000 from the previous year’s tax return. This is because line 15000 represents an individual’s income more holistically, whereas line 10100 only indicates income from employment.
Line 10100, formerly line 101 until the 2019 tax year, indicates an individual’s gross employment income.
As mentioned, line 10100 should contain the aggregated numbers from box 14 of your T4 slips, which indicates your gross, pre-tax employment income from a given employer. As such, line 101 on your tax return is your total employment income before any deductions.
A little reminder that one’s gross income is their earnings before any deductions or taxes. Their net income, on the other hand, is always the same or less than their gross income, as it will have the total tax they owe for the given tax year deducted from their gross income. That is:
Net Income = Gross Income – Taxes
Canadian Tax Returns: How to Submit
As you may already know, a tax return in Canada refers to the mandatory forms that must be prepared and sent to the Canada Revenue Agency (CRA) each financial year by individuals and corporations earning an income.
Your tax return must include information on your employment or self-employed income, foreign investment income, income from assets, or other earnings. You must also include any details regarding your tax deductions, credits, paid tax installments, and expenses.
You can submit your taxes either digitally or manually by mail. After being assessed by the CRA, you may be required to pay additional taxes (if you have underpaid in a given tax year) or get a tax return (if you have overpaid in a given tax year), depending on your total income and eligible deductions.
It is possible to complete your tax return on your own, get digital help, or hire a licensed accountant. However, the two latter will usually have a fee associated with them, ranging from $40 to a couple of hundred dollars.
If you do hire a professional, do note that you will have to supply them with the necessary information to do their job correctly, such as your T4 slips, self-employment earnings, investment incomes, and more.
The CRA will usually have your notice of assessment (NOA) ready in about two weeks after you file your taxes. This statement will include a summary of the amount of income tax you may owe or be owed, tax credit, paid tax installments, and more.
Line 10100 is where you indicate your income from employment on your tax return. Line 15000, on the other hand, indicates your income from all income-generating sources, whether it’s investments, self-employment, or RRSP income.
In my opinion, the best way to up your employment income is through side hustles. Check out this post on the best side-hustles you can take up in Canada to supplement yours.