If you paid anyone employment income last year, you almost certainly owe the CRA a T4. It’s one of the simplest filings in Canadian payroll and one of the most commonly botched — usually because the deadline arrives in February while everyone is still thinking about year-end.
What a T4 actually is
A T4, formally the Statement of Remuneration Paid, reports what you paid an employee during a calendar year and what you withheld from that pay. Two copies matter: one goes to the employee so they can file their personal return, and one goes to the CRA so it can match what they report against what you reported.
You must issue a T4 for any employee you paid employment income, commissions, taxable benefits or allowances to, if you deducted CPP, EI or income tax — or if the remuneration was more than $500 in the year.
A T4 is not the same as a T4A, which covers pension, self-employment commissions, fees for services and other income types. Contractors don’t get T4s — but be careful about who counts as a contractor, because the CRA applies its own tests and reclassification is expensive.
The deadline
T4 slips and the T4 Summary are due on or before the last day of February for the preceding calendar year. The same date applies to giving employees their copies.
If the last day of February falls on a weekend, the CRA accepts filing on the next business day. There’s no extension available, and no version of “we were waiting on year-end” that the CRA finds interesting.
This sits inside a wider set of dates you can find in our guide to small business tax deadlines in Canada.
How to file
Most small employers file electronically, and if you’re filing more than five slips of a given type, electronic filing is mandatory.
- Reconcile payroll first. Total gross pay, CPP, EI and income tax withheld across the year, and compare against what you actually remitted to the CRA. Fix discrepancies now, not after filing.
- Prepare the slips. Payroll software generates them from your data. Doing it by hand means the CRA’s Web Forms or a fillable PDF.
- Prepare the T4 Summary. This totals every slip in the batch. Summary totals must equal the sum of the slips.
- Submit. Upload the XML through CRA My Business Account, Represent a Client, or Web Forms.
- Distribute employee copies by the same deadline — electronically with consent, or on paper.
- Pay any shortfall. If you under-remitted during the year, that balance is due.
The boxes people get wrong
- Box 14 (employment income) must include taxable benefits, not just wages.
- Boxes 16, 17, 18 and 22 — CPP, QPP, EI and income tax deducted. These must match your remittance records.
- Box 24 (EI insurable earnings) and Box 26 (CPP pensionable earnings) are frequently left blank or filled in wrong. They are not always the same as Box 14.
- Boxes 40, 34, 36 and other benefit codes — employer-paid benefits like personal use of a company vehicle, group life insurance premiums or parking often get missed entirely.
- Box 44 (union dues) and Box 46 (charitable donations) where applicable.
Taxable benefits are the most common source of error. If you gave employees anything of value beyond salary, check whether it’s taxable before you file.
Penalties
The late-filing penalty for information returns is charged per day, with a minimum of $100 and a maximum that scales with how many slips you failed to file. For a small employer with a handful of slips, a filing that’s a month late is a real and entirely pointless cost.
There are separate consequences worth knowing about:
- Failing to file electronically when required attracts its own penalty.
- Distributing incorrect slips means filing amended slips and dealing with employees who have already filed their returns using the wrong numbers.
- Failing to remit source deductions on time carries penalties that escalate with repeated occurrences, and can be assessed against directors personally.
Penalty amounts change. Confirm current figures on canada.ca before relying on them.
Getting T4 season right
The employers who file T4s in twenty minutes are the ones who reconciled payroll monthly all year. The ones who lose a week in February are reconciling twelve months of remittances at once.
If payroll is new to you, start with Payroll Basics for Canadian Employers: CPP, EI, T4 & ROE Explained. If you’re deciding whether to run it in-house at all, How Much Does a Bookkeeper Cost in Canada? gives you the numbers to compare against your own time.
EverBooks handles year-round payroll and T4 filing for Canadian employers. See our payroll solutions and tax preparation services, or book a free consultation before February arrives.