Line 10400 on Your Tax Return: Other Employment Income Explained

Most Canadians know their T4 slip covers their employment income. What fewer people realize is that there is a separate line on the T1 return specifically for employment income that never appears on a T4 at all. Line 10400, labelled Other Employment Income, is one of the most commonly overlooked and misreported lines on a Canadian tax return. Missing it entirely or reporting the wrong amounts on it are both common triggers for CRA reassessments.

Line 10100 captures your regular employment income, the salary, wages, commissions, and taxable benefits reported by your employer on your T4 slip. Line 10400 is for employment-related income that sits outside that standard T4 reporting, income you earned from work but that your employer either was not required to document on a T4 or that comes from a source other than a traditional employer-employee arrangement.

Think of Line 10400 as the catch-all for other employment income that does not belong on Line 10100 or any other specific income line. Both lines flow into your total income on Line 15000, but they capture different types of earnings. If you want a full picture of how these lines connect, our breakdown of Line 10100 covers the T4 employment income side in detail.

The CRA specifies several categories of income that must be reported on Line 10400.

Tips and gratuities
Cash tips and gratuities that your employer did not include in your T4 income must be reported here. This applies to servers, hairstylists, drivers, and anyone else who regularly receives tips as part of their work. The CRA is well aware that tip income often goes unreported and treats it as a common audit trigger.

Foreign employment income
If you worked for a foreign employer or performed work outside Canada, that income must be reported on Line 10400 converted to Canadian dollars using the Bank of Canada exchange rate. You do not subtract foreign taxes withheld from the amount you report here. Those are claimed separately as a foreign tax credit on Line 40500.

Clergy housing allowances
If you received a housing allowance or were provided free housing as a member of the clergy, that amount is reported from Box 30 of your T4 slip on Line 10400 rather than Line 10100.

Wage-loss replacement plan payments
Payments from a wage-loss replacement plan shown in Box 107 of your T4A slip are reported on Line 10400.

Research grants
If you received a research grant, the taxable portion after eligible research expenses are deducted is reported on Line 10400. If you later repay a research grant, you can claim a deduction for the repaid amount.

GST/HST rebates on employment expenses
If you deducted employment expenses or union dues in a prior year and later received a GST/HST or QST rebate related to those deductions, that rebate amount is reported on Line 10400 in the year you receive it.

Royalties
Certain royalty payments received as compensation for the use of a copyright, patent, trademark, formula, or secret process are reported on Line 10400, provided they relate to employment activity rather than a business operation.

A common confusion is between Line 10400 and self-employment income. If you operate your own business, work as a freelancer, or earn income as an independent contractor, that income does not go on Line 10400. It is reported on Form T2125 as self-employment income, which then flows to Line 13500 or Line 13700 depending on the type of activity.

The distinction matters because self-employment income carries CPP obligations and allows for business expense deductions that employment income on Line 10400 does not. Misclassifying self-employment income on Line 10400 is a common error that can result in CRA reassessments and either underpaying or overpaying what you owe.

Income reported on Line 10400 is treated as employment income for tax purposes. It is taxed at your marginal rate and adds to your total income on Line 15000 alongside all your other income sources. Unlike self-employment income, amounts on Line 10400 do not generate CPP contribution obligations, and they are not eligible for the business expense deductions available on Form T2125.

Because no tax is withheld at source on most Line 10400 income, particularly tips and foreign employment income, taxpayers who rely heavily on these income sources often face a balance owing at filing time. Setting aside a portion of this income throughout the year avoids an unwelcome surprise in April.

Since Line 10400 often covers income with no formal slip attached, the CRA expects you to maintain your own records. For tips and gratuities, keep a running log throughout the year noting amounts received. For foreign employment income, retain records of all payments received and the exchange rates used for conversion. For any income reported from a T4A slip, keep the slip itself.

The CRA receives third-party reporting from employers, financial institutions, and increasingly from digital platforms. If your reported Line 10400 income does not align with what they already know, a review letter is likely to follow.

If you are unsure whether a specific type of income belongs on Line 10400 or elsewhere on your return, or if you have received a CRA letter questioning amounts reported on this line, our tax services for employed Canadians are designed to handle exactly these situations.