Tax Statements for Injured Workers

T5007 Statements

By law, Workers’ Compensation Boards in Canada must give a T5007 statement to all workers who received compensation benefits in the current tax year.

As an employer, you need to know your responsibilities regarding your workers’ T5007 statements.

We create and distribute T5007 statements at the end of each taxation year. All workers, survivors and dependants who received wage replacement benefits from us get a T5007 statement.

What is a T5007 Statement?

The T5007 statement shows the total amount of wage replacement benefits, less any interest payments, that a worker received up to and including December 31st of the current taxation year. Workers must include these amounts on their income tax returns.

Advances payments

You may continue to pay an employee’s salary or wages while the employee is off work due to a work-related injury or illness. This payment is called an Advance.

If entitlement for payment exists, we reimburse you the equivalent lost time benefits (loss of earning benefits) we would have paid the worker while off work.

Employer Advances Report

In January, we will send you an Employer Advances Report that tells you the payment amount we reimbursed you, on behalf of specific workers, in the current taxation year. This repayment amount needs to be included on your employee’s T4 slip in Box 77 (the Other Information box) in order for your employee to properly fill out an income tax return.

Changes in reporting compensation amounts

As of January 1, 2000, the Canada Revenue Agency (CRA) changed the way that you report compensation reimbursement amounts on your employees’ T4 slips.

If you continue to pay an employee’s salary, before or after the WSIB has made a decision on a claim, you cannot make retroactive adjustments to income and deductions, either in the same year or any prior years. These payments are considered to be taxable income in the year that they are paid.

Consequently, you cannot amend the prior year T4 slips or the current year’s T4 slips by the amount of the worker’s compensation benefits. You must enter the amount of the workers’ compensation that was reimbursed to you, either by the WSIB or the employee, in Box 77 (the Other Information box) of the T4 slip.

An advance or loan made to an employee that is equivalent to a workers' compensation award is not treated as employment income and is not reported on a T4 slip.

Example of reporting

For example, if we reimbursed Advances paid by an employer on January 10, 2004 for a period of lost time in 2003, the CRA considers the WSIB benefits to be part of the 2004 tax year since this is the year in which the benefits were paid. The benefits would be included on the 2004 T5007 statement to the worker, the 2004 Employer Advances Report and the 2004 T4 slip.

Frequently asked questions

Read answers to commonly asked questions about the T5007 statement.