Workers' compensation benefits – Personal income tax
- Federal: Line 14400
- Tax year: 2025| Prior tax years: 2024 and earlier
Workers' compensation benefits (WCBs) are compensation paid because of an injury, disability, or the death of a worker under the law of Canada or a province or territory.
If you received these amounts, they will be shown on Form T5007, Statement of Benefits.
These benefits are generally not taxable. However, you still have to report them on your income tax and benefit return so that certain credits and benefits can be calculated correctly.
On this page
Who needs to report
You must report WCBs if you received a T5007 slip with an amount in box 10 for the tax year.
The T5007 slip is issued to individuals who received benefits such as:
- benefits that are a wage-loss replacement for time lost from employment due to a compensable injury or condition
- a wage-loss replacement income paid to an injured worker who suffered a partial, total, temporary, or permanent disability as a result of a work-related accident
- compensation for future loss of earnings made to an injured worker who suffers from an injury resulting in permanent impairment or temporary disability
- survivor benefits that are periodic payments to a dependent spouse or common-law partner, dependent children, or orphans
- wage-loss replacement income periodically paid to a surviving spouse or common-law partner to replace the income that a worker who died in a work-related accident or as a result of an industrial accident would have earned
In general, the slip is issued to the injured worker (or the beneficiary), even if payments were made to another party on their behalf.
How much to report
Report the total amount shown in box 10 of your T5007 slip.
When to report
Report WCBs in the year you receive them, even if they relate to a previous year (for example, retroactive payments).
How to report
Report the amount on your federal tax return
- Enter the amount from box 10 of your T5007 slip on line 14400 of your income tax and benefit return.
- Claim a deduction for the same amount on line 25000.
Note:
This ensures the amount is included in your net income but is not taxable. It also ensures that any benefits and credits you may be entitled to are calculated correctly.
Examples of common situations
-
Example 1 – Basic reporting
Nadia receives $6,500 in WCBs, as shown in box 10 of the T5007 slip.
What Nadia does:
- Entering $6,500 on line 14400
- Claiming a deduction of $6,500 on line 25000
Result:
The amount is included in her net income but is not taxable.
-
Example 2 – Reporting and repayment of workers' compensation benefits
Sophie was injured at work and received WCBs during the year. While she was off, her employer continued to pay her salary. At the end of the year, Sophie received both slips:
- a T4 slip showing her employment income
- a T5007 slip showing $8,000 in WCBs (box 10)
Sophie repaid her employer for the WCBs.
What Sophie does:
- Entering $8,000 from box 10 of her T5007 slip on line 14400
- Claiming $8,000 on line 25000 as a deduction
- Reporting her employment income from her T4 slip on line 10100
- Claiming the amount she repaid to her employer on line 22900
Result:
The benefits are not taxable, and the repayment is properly accounted for, ensuring Sophie is not taxed twice on the same income.
-
Example 3 – Reporting retroactive payments
David received WCBs in 2025, including a lump-sum payment of $12,000 for benefits that relate to 2023 and 2024. He received a T5007 slip showing $12,000 in box 10 for 2025.
What David does:
- reports the full $12,000 on line 14400 of his 2025 income tax and benefit return
- claims a deduction of $12,000 on line 25000
Result:
The amount is not taxable but must be reported in the year it is received, even if it relates to prior years, to ensure that benefits and credits are calculated correctly.
Keep your supporting documents
Do not send any supporting documents when you file your tax return. Keep them in case the CRA asks to see them later.