A T4, formally known as the Statement of Remuneration Paid, is a tax information slip that Canadian employers must issue to employees annually. The T4 summarizes total employment income earned during the calendar year, along with deductions for income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. Employers must provide T4 slips to employees by the last day of February following the tax year.
The form includes several key boxes: Box 14 reports gross employment income, Box 22 shows income tax deducted, Box 16 displays CPP contributions, and Box 18 indicates EI premiums. For example, an employee earning $60,000 annually would receive a T4 showing this amount in Box 14, with corresponding deductions in the other boxes. Employers must also file copies with the Canada Revenue Agency, ensuring accurate tax reporting for both the organization and its workforce.
The T4 is essential for tax compliance in Canada, enabling employees to file accurate income tax returns and claim applicable credits or refunds. Employers who fail to issue T4 slips on time face penalties of $25 per day (minimum $100, maximum $2,500 per return) according to the Canada Revenue Agency. Beyond compliance, timely and accurate T4 preparation reflects organizational professionalism and supports positive employee experience during tax season, reducing inquiries and confusion about year-end compensation statements.
- Collect payroll data: Aggregate all compensation paid to each employee throughout the calendar year, including salaries, bonuses, taxable benefits, and any other remuneration subject to reporting requirements.
- Calculate statutory deductions: Verify total amounts withheld for federal and provincial income tax, CPP contributions, and EI premiums, ensuring accuracy against payroll records and remittance confirmations.
- Generate and distribute slips: Prepare T4 slips using certified payroll software or CRA-approved methods, then distribute to employees by February 28th via paper copy, secure electronic delivery, or employee self-service portals.
- File with CRA: Submit T4 Summary and individual T4 slips to the Canada Revenue Agency electronically if filing more than 50 slips, meeting the same February deadline to avoid penalties.
Key Statistics & Benchmarks
- February 28 deadline — employers must issue T4 slips by this date annually.
- Electronic filing mandatory — required when submitting more than 50 T4 information slips.
- Penalties start at $100 — minimum fine for late or missing T4 submissions.
- Box 14 most critical — reports total employment income for tax assessment purposes.
Common Mistakes to Avoid
- Missing the February deadline: Set internal deadlines two weeks early to allow review time and avoid CRA penalties.
- Incorrect taxable benefit calculations: Verify automobile, housing, and other benefit valuations against CRA guidelines before finalizing T4s.
- Failing to update employee addresses: Confirm current mailing information in January to ensure slips reach employees promptly.
Frequently Asked Questions
What is a T4 form used for?
A T4 form reports employment income and statutory deductions to both employees and the Canada Revenue Agency. Employees use the T4 to complete their personal income tax returns, claiming the income reported in Box 14 and the deductions shown in other boxes. The CRA uses T4 data to verify tax return accuracy and ensure employers have remitted the correct amounts throughout the year.
How do I read my T4 slip?
Your T4 slip contains numbered boxes with specific information. Box 14 shows your total employment income before deductions. Box 22 displays federal income tax withheld, while Box 16 and Box 18 show CPP and EI contributions respectively. Provincial boxes (often in the 20s) report provincial tax withheld. Transfer these amounts to the corresponding lines on your tax return to calculate your refund or balance owing.
What is the difference between a T4 and a T4A?
A T4 reports employment income from an employer-employee relationship, including salaries and wages with statutory deductions. A T4A reports other income types such as self-employment income, pension payments, scholarships, or fees paid to contractors. Employees typically receive T4s, while independent contractors and certain benefit recipients receive T4As. The forms serve different tax reporting purposes and have distinct box structures reflecting their different income categories.
Can I file my taxes without a T4?
While you should wait for your T4 to ensure accuracy, you can file without it if necessary using your final pay stub to estimate income and deductions. The CRA may process your return more slowly and request the T4 later for verification. If your employer fails to provide a T4 by late February, contact them first, then call the CRA after mid-March to request intervention and obtain the necessary information.