T4 Canada: File Tax T4 slip as a Canadian employee - Guidelines to follow and Mistakes to Avoid

If you’re an employer or employee navigating the Canadian tax system, the term T4 Canada is something you absolutely need to understand. The T4 slip isn’t just a form, it’s a vital document that summarizes how much employment income you've earned and how much tax has been deducted over the year. Whether you're filing taxes or managing payroll, getting this right is key to avoiding costly mistakes and penalties.

In this guide, we’ll break down the essentials of T4 slips in Canada in a clear, easy to understand way no jargon, just straight-up facts to help you stay on track and stress-free during tax season. ​The T4 slip is a crucial document for employers in Canada, serving as an official record of employment income and deductions for each employee over the calendar year. Issued by employers, the T4 slip summarizes wages, taxable benefits, and statutory deductions, ensuring compliance with the Canada Revenue Agency (CRA) requirements.

 

When is a Canada T4's Slip Required?

Employers must issue a T4 slip if they have paid employment income, commissions, taxable allowances, benefits, or other remuneration to an employee during the year. This obligation arises under the following condition.

•  Deductions for Canada Pension Plan (CPP) or Quebec Pension Plan (QPP), Employment Insurance (EI), Provincial Parental Insurance Plan (PPIP), or income tax have been made from the employee's remuneration. You can check more guide about employment guide on Canada Revenue Agency for T4 Canada slip

 

• The total remuneration paid in the calendar year exceeds $500, unless the remuneration is on the CRA's exception list. Notably, even if the total remuneration is $500 or less, a T4 slip must be issued if taxable group term life insurance benefits are provided to current employees.

 

• They have paid employment income, commissions, taxable allowances, or benefits to an employee.

 

 

What Is a T4 Canada Slip?

A T4 slip outlines the total earnings and deductions for an employee within a calendar year. It includes various types of income, such as salary, wages, tips, bonuses, and taxable benefits. Additionally, it details deductions like Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax withheld. This information is essential for employees when filing their annual tax returns.

 

What Should Be Reported on a T4 Canada Slip?

The T4 slip should include:​

• Salary or wages​
• Tips or gratuities​
• Bonuses and vacation pay​
• Employment commissions​
• Taxable benefits or allowances​
• Retiring allowances​
• Deductions withheld during the year​
• Pension adjustment (PA) amounts for employees who accrued a benefit for the year under a registered pension plan (RPP) or deferred profit sharing plan (DPSP)​
• Security options benefits provided to an employee, former employee, or non-resident employee​

 

However, certain payments are not reported on the T4 slip. For instance, pensions, lump-sum payments, annuities, or other income should be reported using the T4A slip. Similarly, amounts paid to a proprietor or partner of an unincorporated business are not reported on the T4 slip.

 

Guidelines for Completing the T4 Canada Slip

When filling out the T4 slip, employers should adhere to the following guidelines:​

• File a separate T4 return for each payroll account if multiple accounts are maintained.​
• Report income on the T4 slip for the year in which it is paid, regardless of when it was earned.​
• If an employee worked in more than one province or territory during the year, complete a T4 slip for each province or territory.​
• Do not show negative dollar amounts on slips. To make changes to previous years, follow the prescribed correction procedures.​
• If a box does not have a value, leave it blank; do not enter "nil" or "N/A".​
• Report all amounts in Canadian dollars, even if they were paid in another currency. Use the Bank of Canada's exchange rate in effect on the day the amount arises for conversion

 

Issuing T4 Slips to Employees

Employers must provide employees with their T4 slips by the last day of February following the calendar year to which the slips apply. Failure to do so may result in penalties. T4 slips can be issued electronically, provided the employee has given written consent. Alternatively, they can be made accessible through a secure employer portal. If an employee requests a paper copy, one must be provided.

What Information Is Reported on a T4 Slip?

A T4 slip includes:

• Box 14: Employment income before deductions.

• Box 16: Employee’s CPP contributions.

• Box 18: Employee’s EI premiums.

• Box 22: Total income tax deducted.

• Box 44: Union dues (if applicable).

• Box 46: Charitable donations deducted from earnings.

Additionally, the "Other information" section allows for reporting various codes related to specific benefits or deductions, such as board and lodging (Code 30) or security options deductions (Codes 91 and 92). Check T4 CANADA employer guide.

 

How to Complete and File the T4 Slip Canada

Employers can obtain the T4 slip form in various formats, including accessible fillable PDFs and print versions. It's crucial to report all amounts in Canadian dollars, even if they were paid in another currency. The CRA provides guidelines for converting foreign income using the Bank of Canada exchange rates.

Each payroll account requires a separate T4 return. If an employee worked in more than one province or territory during the year, a T4 slip must be issued for each jurisdiction. Employers must also submit a T4 Summary, which aggregates the totals from all T4 slips issued under a specific payroll account

What Common Mistakes to Avoid when filing for T4 Canada

• Negative Amounts: Do not report negative dollar amounts on T4 slips. To correct previous errors, employers must follow the CRA's procedures for making adjustments.

• Incomplete Fields: If a box does not apply, leave it blank. Do not enter "nil" or "N/A".

• Currency Issues: Always report amounts in Canadian dollars. Ensure accurate currency conversion when dealing with foreign income.

• Incorrect Codes: Use the correct codes in the "Other information" section to report specific benefits or deductions.

 

How to Obtain T4 Canada slips

1. Access Through the CRA’s "My Account" Portal

The Canada Revenue Agency (CRA) provides an online service called My Account, where you can view and download T4 slips from previous years.

• Sign in using your CRA account details or through a participating financial institution.
• If you don’t have an account, you can create one on the CRA website.
• Once logged in, go to the “Tax information slips (T4 and more)” section to view and download your T4 slips.

Keep in mind that there may be a delay in processing, so if you don’t see a slip immediately, check back after a few days. You can find more details about this service on the CRA’s website.

2. Contact Your Employer Directly

If you're unable to find your T4 slip online, you can always reach out to your employer's payroll or HR department. Employers are obligated to provide T4 slips by the end of February each year. If you haven't received yours, it's best to contact them directly for assistance.

3. Request a Copy from the CRA via Phone

If you are unable to access your T4 slips online or through your employer, you can call the CRA to request a copy. Their individual inquiries line is available at 1-800-959-8281, where you can speak to a representative.

Before calling, be sure to have your Social Insurance Number (SIN) and personal information ready to verify your identity.

4. Use Auto-fill My Return for Easy Filing

If you are filing your taxes online, the CRA’s Auto-fill my return feature can automatically fill in your T4 slip details and other tax information. This service requires your T4 slips to be available in your CRA account, so make sure they’ve been processed and are listed there. If any slips are missing, you can manually enter the information.

For more details on Auto-fill, visit the CRA’s official page on the service.

 

Check more on Taxreliefportal - USA Internal Revenue Service – Ogden Utah