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Business ->  Personal Tax -> T4 Slips

T4 Slips - Requirements and Timing

Employment income is included on a T4 for the year in which it is received, not earned, as per s. 5(1) of the Income Tax Act, which states:  "a taxpayer's income for a taxation year from an office or employment is the salary, wages and other remuneration, including gratuities, received by the taxpayer in the year."  If payment is made in January 2021 for wages earned in December 20220, this amount will be reported on the 2021 T4, not on the 2020 T4.  One exception to this is related to employee trusts, which will not affect most employees.  Income from an employee trust is reported on a T4 for the period in which the income was allocated to beneficiaries by the trustee, not for the period in which any payment was made to beneficiaries.

Due date for T4 slips to be filed and given to employees: Last day of February, but if this falls on a Saturday or Sunday, the the due date is the next business day.

Update for 2020 T4 slips for all employers:  In addition to reporting employment income in Box 14 or Code 71, all employers must also use the following new information codes for employment income paid (not earned) in the following periods:

 - Code 57:  March 15 to May 9 (8 weeks)

 - Code 58:  May 10 to July 4 (8 weeks)

 - Code 59: July 5 to August 29 (8 weeks)

 - Code 60: August 30 to September 26 (4 weeks)

Note that the above codes are a requirement for all employers, not just for those employers that have received payroll related benefits.  If T4 slips have been filed already without this information, then amended slips should be filed.  However, if the 2020 T4 slips and summary were filed on or before December 22, 2020, an amended T4 will not be required.  If more than 6 "other information" codes apply to the same employee , the CRA Guide indicates that an additional slip should be used.

See the CRA Information for employers about the new codes.  The new information is to be used to help CRA validate payments under the Canada Emergency Wage Subsidy (CEWS), Canada Emergency Response Benefit (CERB), and Canada Emergency Student Benefit (CESB).  The CERB eligibility periods cover March 15 to September 26.  The CESB eligibility periods cover May 10 to August 29.

These amounts will be entered by employees in tax software as part of the T4 data entered.

T4 and T4A slips must be distributed, and T4 and T4A returns must be filed, on or before the last day of February following the calendar year to which the slips apply.  If the last day of February falls on a Saturday or Sunday or public holiday, the tax slips and returns are considered on time if postmarked on the next business day.  Employers can be penalized $25 per day late, with a minimum penalty of $100 and a maximum penalty of $7,500.  See link at bottom, to Canada Revenue Agency (CRA) page re penalty.

The employee should be provided 2 copies of the T4, preferably printed on one sheet (CRA Web Forms does this automatically).  This can be done by:

bulletmail to the employee's last known address
bulletdelivery in person
bulletelectronic delivery, if you have the employee's consent in writing or electronic format

T4s can be distributed electronically to employees through a secured portal and with a secured printer.  T4s can be distributed using email with written consent from the employee, but employers must issue paper T4s to employees who request them.

A T4 slip must be completed for each individual who received remuneration during the year if:

bullet CPP/QPP contributions, EI premiums, income tax, or Quebec PPIP premiums had to be deducted from the remuneration, or
bullet the remuneration was more than $500

An exception to the $500 limit is when employees are provided with taxable group term life insurance benefits.  In this case, for T4s must always be prepared, even if the total remuneration paid in the calendar year is less than $500.  When former employees or retirees are provided with such benefits, a T4A slip must be completed.  For the 2018 and subsequent taxation years, a T4A will only be required for taxable group term life insurance benefits in excess of $50, if it is the only income being reported on a T4A slip.  See CRA's January 2018 announcement about this.

What is Included in Remuneration?

Remuneration reported in box 14 (employment income) of the T4 slip includes:

bullet salary or wages
bullet severance pay
bullet tips or gratuities
bullet bonuses
bullet vacation pay
bullet employment commissions
bullet honorariums
bullet director's fees
bullet management fees
bullet executor's and administrator's fees received to administer an estate (unless the administrator or executor acts in this capacity in the regular course of business)
bullet taxable allowances
bullet value of taxable benefits, including any GST/HST or other applicable taxes
bullet amounts paid under a supplementary unemployment benefit plan (SUBP) that do not qualify as a SUBP under the Income Tax Act, including top-ups for maternity, parental, or compassionate care leave
bullet payments out of an employee benefit plan (EBP)
bullet amounts that a trustee allocated under an employee trust.

Other types of remuneration that must be reported on a T4 slip, but are not included in box 14 include amounts paid to the following workers, if they work for you but are not your employees:

    - drivers of taxis or other passenger-carrying vehicles

    - barbers or hairdressers

The T4s are completed for these self-employed workers for purposes of EI and PPIP only.

There are special reporting requirements for the following workers, depending on the work situation or type of payment:

    - placement or employment agency workers

    - fishers (self-employed)

Filing T4 Slips

An employer can file up to 100 T4 slips using Canada Revenue Agency's T4 Web Forms.  See their Filing Information Returns Electronically information.  No software is required - the T4 slips are prepared online.  Note that you no longer need to wait for a new web access code to file your T4s, T5s or other information returns online.  You can use the web access code provided to you previously. However, if you log into My Business Account or Represent a Client and select to file a return, no web access code will be required.  If you are not using My Business Account or Represent a Client and you've forgotten or misplaced your code, you can retrieve it online  - see Web access code on the Filing Information Returns Electronically page (link above).

Web Forms will be available starting 6 am on Monday, January 11, 2021 (Eastern Time).  See above re extra codes for 2020 T4 slips.

Employers who submit more than 100 information slips are required to file electronically.

T4 Summary re 10% Temporary Wage Subsidy (TWS)

The TWS must be reported to CRA on Form PD27, 10% Temporary Wage Subsidy Self-Identification Form for Employers.

The amount by which you reduced your remittances is deemed to be paid, so will be included with the amount of your actual remittances when complete your T4 Summary.

See the February 2021 Life In the Tax Lane video for more information on this, as well as the Video Tax News article on Correcting Form PD27 Submissions, if you have already filed PD27 and determine that the amount was incorrect.

T4 Slip re Election to Stop Contributing to CPP - Pensionable and Insurable Earnings Review (PIER)

When a Canada Pension Plan recipient age 65 to 70 has elected to stop contributing to the CPP by completing and submitting form CPT30, box 28 on the T4 (CPP/QPP exempt) should be left blank in the year of the election.  See the CRA instructions for Box 28.

TaxTips.ca Resources

Automobile taxable benefits

Canada Pension Plan Rules

Ceasing Business - including T4 requirements

COVID-19 Benefits - Tax Slip Issues - New

Employee vs contractor

Tax-free (or reduced tax) employee benefits

Canada Revenue Agency (CRA) Resources

Important Dates for Payroll

My Business Account

T4 slip - information for employers

Employers' Guide - Filing the T4 Slip and Summary

Filling Out the T4 slip - Identification and pre-numbered boxes - scroll to the bottom of the page to access further box numbers

T4A slip - information for employers/payers

Filing Information Returns Electronically (T4/T5 and other types of returns) - How to file, access to Internet file transfer (XML) and Web Forms

Tax Slips - information for employees

Penalty for failure to file an information return by the due date

IT502 Employee Benefit Plans and Employee Trusts and IT502SR (special release) (both Archived)

Revised: April 18, 2021

 

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