Who gets a T4
You issue a T4 slip to every employee you paid employment income, commissions, taxable benefits or other remuneration during the calendar year, or from whom you deducted CPP, EI or income tax. That includes part-time, casual and seasonal staff and employees who left during the year. Generally a T4 is required if remuneration exceeded $500 or if you deducted any CPP, EI or tax.
Self-employed contractors do not get a T4. Depending on the payment, they may get a T4A (for fees for services in some cases) or, in construction, a T5018 for subcontractor payments. Québec employers also issue an RL-1 slip to employees for provincial purposes.
The boxes that matter most
A T4 has many boxes, but a handful carry most of the information. Errors in these are the ones the CRA most often catches. Box 14 is total employment income before deductions, including taxable benefits. Boxes 16 and 16A are the employee’s CPP and second additional CPP (CPP2) contributions; Québec employees use box 17 for QPP. Box 18 is EI premiums, box 22 is income tax deducted, box 24 is EI insurable earnings, and box 26 is CPP or QPP pensionable earnings.
Other common boxes include box 10 (province of employment), box 12 (SIN), box 44 (union dues), box 45 (employer-offered dental benefits), box 46 (charitable donations through payroll), box 52 (pension adjustment) and boxes 55 and 56 (PPIP premiums and insurable earnings for Québec). Taxable benefits are also reported with specific codes in the Other information area.
- Box 14: employment income
- Box 16 / 16A: CPP and CPP2 contributions (box 17 for QPP)
- Box 18: EI premiums
- Box 22: income tax deducted
- Box 24: EI insurable earnings
- Box 26: CPP/QPP pensionable earnings
- Box 45: employer-offered dental benefits code
Deadlines and filing rules
T4 slips and the T4 Summary are due by the last day of February following the calendar year. When that date falls on a weekend or public holiday, the deadline moves to the next business day. The same date is the deadline to give employees their copies. Québec RL-1 slips share the same deadline.
If you file more than five T4 slips for a calendar year, you must file electronically. Most employers file an XML file through the CRA’s Internet File Transfer service, or use Web Forms to create and file slips online. Payroll software produces the XML; SeroPayroll and payroll in SeroBooks Pro generate T4 and T4 Summary XML along with T4A and T5018 files, and run filing readiness checks before you submit. RL-1 slips are produced as slips only, without electronic transmission to Revenu Québec.
Reconcile before you file
The T4 Summary totals all slips and compares them with what you remitted during the year. If the CPP, EI and tax on your slips (plus your employer share) do not match your remittances, the CRA will notice. Before filing, reconcile three things: total payroll in your books against box 14 totals, deductions on slips against your payroll liability accounts, and total deductions against the remittances on your CRA account.
The CRA also runs a pensionable and insurable earnings review (PIER) after slips are filed. It recalculates CPP and EI for each employee and assesses you for any shortfall, including the employer share. Reviewing PIER issues before filing avoids those assessments. SeroPayroll includes a PIER review that flags under-deductions before the CRA does.
Check employee details and taxable benefits
Before generating slips, confirm every employee’s SIN, legal name and address. A missing or invalid SIN is one of the most common slip errors. Check the province of employment, because it affects which provincial tax applies and must be correct on the slip.
Then confirm that taxable benefits were recorded during the year: employer-paid group term life insurance premiums, personal use of a company vehicle, gifts and awards above the CRA’s non-taxable limits, and employer-paid parking where taxable. Benefits recorded only at year-end often mean deductions were under-taken during the year, which shows up in PIER.
Distribute and amend
Give each employee their copies by the deadline. You can distribute T4 slips electronically, such as through a secure portal or by email, if the employee has consented in writing; otherwise provide paper copies. Former employees should receive theirs at their last known address.
If you find a mistake after filing, file an amended slip electronically (or a paper amended slip marked as such) and give the employee the amended copy. Do not file a second original slip. If the error affects remittances, correct those with the CRA as well.
Common T4 errors to check before filing
Most T4 problems repeat from employer to employer. A final review against this list catches the majority before the CRA does. Run it after the last pay run of the year and again after generating the slips.
Also check the T4 Summary itself: the number of slips, total employment income, total deductions and the employer’s share of CPP and EI. These totals should equal the sum of the slips and reconcile to what you remitted. A difference usually means either an under-remittance (which you should pay before the CRA assesses it) or an error on one or more slips.
- Missing or invalid SINs and misspelled names
- Wrong province of employment in box 10
- Taxable benefits left out of box 14 or reported without codes
- CPP or EI exempt employees not flagged in box 28
- Box 24 and 26 left blank where they should show insurable or pensionable earnings
- Box 45 dental benefits code missing
- Former employees omitted because they left early in the year
A year-end timeline
Year-end is easier if you start in November. Use the last pay runs of the year to fix problems, because corrections made through payroll are cleaner than adjusting slips after the fact.
- November: review taxable benefits, employee SINs and addresses
- December: run final pay runs; correct CPP/EI shortfalls in-year
- January: reconcile payroll to books and remittances; review PIER
- Early February: generate T4/T4 Summary and RL-1; check readiness
- By the last day of February: file and distribute slips
- January 1: load new-year rates and maximums before the first pay run