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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 a payment is made in January 2019 for wages earned in December 2018, this amount will be reported on the 2019 T4, not on the 2018 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.
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. Depending on the number of slips involved, employers can be penalized from $5 to $75 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:
The Federal 2017 Budget proposes to eliminate the need for the employee's consent prior to distributing T4s electronically to current active employees. However, sufficient privacy safeguards must be in place before electronic T4s can be sent without express consent, and 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:
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:
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:
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:
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).
Employers who submit more than 100 information slips are required to file electronically.
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, if there are pensionable earnings paid in the year before the election took place. If the total pensionable earnings in the year is zero, then indicate CPP/QPP exempt in box 28. See the CRA instructions for Box 28.
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Canada Revenue Agency (CRA) Resources
Revised: December 28, 2018
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