T4 Slip (Canada)
The annual Canadian tax form (Statement of Remuneration Paid) that employers must prepare and file for each employee, reporting total employment income, income tax deducted, CPP and EI contributions, and other payroll information to the Canada Revenue Agency.
What Is a T4 Slip?
Key Takeaways
- ✓The T4 slip (Statement of Remuneration Paid) is a Canadian tax form that employers must prepare for each employee annually, summarizing total employment income and all payroll deductions for the calendar year.
- ✓Employers must file T4 slips electronically with the CRA and provide copies to employees by February 28 following the calendar year (or the next business day if February 28 falls on a weekend).
- ✓The CRA processed approximately 10.9 million T4 slips for the 2022 tax year, making it the most common information return in Canada.
- ✓The T4 slip feeds directly into the employee's T1 personal income tax return, pre-filling income and deduction data through the CRA's Auto-fill feature in tax software.
- ✓Starting in 2024, T4 slips include new boxes for CPP2 contributions (second ceiling), requiring payroll software updates.
The T4 is one of the most important tax documents in Canada. Every employee who earned employment income during the calendar year receives one from each employer. The slip summarizes everything: gross income, income tax withheld, CPP contributions, EI premiums, union dues, pension adjustments, taxable benefits, and a dozen other payroll components. For employers, preparing accurate T4 slips is a year-end obligation that carries real penalties for errors and late filing. The CRA cross-references T4 data against the employer's payroll remittances, the employee's tax return, and other information returns. Discrepancies trigger automatic queries and potential audits. Most payroll software generates T4 slips automatically from pay run data. The challenge isn't the form itself. It's ensuring that every payment, benefit, and deduction was coded correctly throughout the year so the year-end numbers are right.
Key T4 Boxes and What They Report
The T4 has 88 boxes, but most employers use a core set regularly. Here are the ones that matter most for payroll processing.
| Box | Description | What It Reports |
|---|---|---|
| Box 14 | Employment income | Total gross employment income before deductions (the most important box) |
| Box 16 | Employee's CPP contributions | Total CPP deducted from the employee's pay during the year |
| Box 17 | Employee's QPP contributions | Total QPP deducted (Quebec employees only) |
| Box 18 | Employee's EI premiums | Total EI premiums deducted from the employee's pay |
| Box 22 | Income tax deducted | Total federal and provincial income tax withheld |
| Box 24 | EI insurable earnings | Total earnings subject to EI premiums (may differ from Box 14) |
| Box 26 | CPP/QPP pensionable earnings | Total earnings subject to CPP/QPP contributions |
| Box 40 | Taxable allowances and benefits | Value of taxable benefits (company car, group life insurance premiums above CAD 25,000) |
| Box 44 | Union dues | Total union or professional dues deducted |
| Box 52 | Pension adjustment (PA) | Value of employer pension plan benefits accrued (affects RRSP room) |
| Box 54 | Business number of employer | The employer's CRA business number and payroll account identifier |
How to File T4 Slips
The T4 filing process involves preparing individual slips, a summary return, and electronic submission to the CRA.
Electronic filing requirement
Employers filing more than 5 T4 slips must file electronically. In practice, this covers virtually every employer except the smallest. Electronic filing is done through the CRA's Internet file transfer (XML upload), Web Forms (manual online entry for small volumes), or through payroll software that transmits directly to the CRA. Paper filing is only permitted for employers with 5 or fewer T4 slips, and even then, electronic filing is encouraged.
T4 Summary (T4SUM)
Along with individual T4 slips, the employer files a T4 Summary that totals all T4 slip amounts. The summary includes total employment income paid, total deductions withheld, and total remittances made to the CRA during the year. The CRA reconciles the T4 Summary against the employer's actual remittance records. If total T4 Summary amounts don't match total remittances, the CRA issues a balance due or credit notice. This reconciliation catches under-remittance and over-remittance errors.
Distribution to employees
Employers must provide T4 copies to employees by February 28. This can be done electronically (if the employee consents to electronic delivery and can access the slip through a secure portal) or by mail (postmarked by February 28). Many payroll platforms now offer T4 access through employee self-service portals, which saves printing and mailing costs. The employer must keep copies of all T4 slips for 6 years from the end of the tax year.
Common T4 Filing Errors and How to Avoid Them
T4 errors are one of the top triggers for CRA payroll audits. These are the mistakes that cause the most problems.
Box 14 vs actual payments
Box 14 (Employment Income) must include all taxable employment income: salary, wages, bonuses, commissions, taxable benefits, vacation pay, and retroactive payments. A common error is excluding taxable benefits (company car benefit, group life insurance premiums above CAD 25,000 coverage, employer-paid parking) from Box 14. These amounts must be included even if the employee didn't receive them as cash. Another error: including non-taxable amounts like employer RRSP contributions.
CPP and EI maximum mismatches
If the employee's CPP deductions (Box 16) or EI premiums (Box 18) don't match the expected maximum based on their earnings, the CRA flags it. Common causes: employee started mid-year and deductions are prorated correctly (this is fine, but it looks like an error), employee was over-contributed due to a payroll calculation error, or the employer missed a pay period and under-deducted. Always run a pre-T4 audit report that compares actual deductions to expected maximums.
Pension adjustment (Box 52) errors
The pension adjustment (PA) in Box 52 represents the value of benefits accrued in the employer's registered pension plan (RPP) or deferred profit sharing plan (DPSP). The PA directly reduces the employee's RRSP contribution room for the following year. An incorrect PA can cause the employee to over-contribute to their RRSP (triggering a 1% per month penalty) or under-contribute (missing out on tax-deferred savings). PA calculations are complex for defined benefit plans and should be reviewed by the plan actuary.
Social Insurance Number (SIN) issues
Every T4 must include the employee's SIN. Invalid or missing SINs cause the slip to be rejected. Employees with SINs starting with 9 are temporary workers with a valid work permit. Their SIN should be flagged in the payroll system for monitoring because it expires when the work permit expires. If an employee's SIN changes (upon becoming a permanent resident), both the old and new SIN should be on file, with the current SIN on the T4.
Amending and Cancelling T4 Slips
Errors on filed T4 slips can be corrected, but the process depends on when the error is discovered.
Amending before filing deadline
If you discover an error before February 28, you can file an amended T4 slip. The amended slip replaces the original in the CRA's system. Provide the corrected copy to the employee as well. If using payroll software, make the correction in the system and regenerate the T4 file for electronic submission. The CRA accepts replacement files that override previously submitted data.
Amending after filing deadline
After February 28, amending a T4 requires submitting an amended T4 slip and an amended T4 Summary through the CRA's Web Forms or Internet file transfer. The employer must also provide the employee with a corrected T4 copy. If the amendment results in additional income for the employee, the employee may need to file an adjusted T1 tax return. If it reduces income, the employee can request a reassessment from the CRA.
Cancelling a T4
If a T4 was issued in error (wrong employee, duplicate, payment was actually for a contractor who should receive a T4A), the employer can cancel it by filing a cancellation through the CRA's system. The cancelled slip must be replaced with the correct slip type if applicable. Cancelled T4 slips still appear in the CRA's records as cancelled, so there's an audit trail.
Quebec Employers: T4 Plus RL-1
Employers with employees in Quebec have a double filing obligation. They must file both a T4 (federal) and an RL-1 (provincial) for each Quebec employee.
RL-1 overview
The RL-1 (Releve 1) is Quebec's equivalent of the T4, filed with Revenu Quebec. It reports employment income, Quebec income tax deducted, QPP contributions, QPIP premiums, and other Quebec-specific deductions. The RL-1 deadline is the last day of February (same as the T4). Many boxes on the RL-1 correspond to T4 boxes, but the amounts can differ because Quebec has its own tax calculations, QPP rates, and benefit inclusion rules.
Key differences from T4
QPP contributions instead of CPP (Box B on RL-1 vs Box 16 on T4). QPIP premiums reported on RL-1 (no equivalent on T4). Quebec provincial income tax deducted (Box E on RL-1, not reported on T4). Certain taxable benefit valuations differ under Quebec tax rules. Employer health tax contributions may be reported differently. Payroll software that handles multi-province operations should generate both T4 and RL-1 automatically, but the configuration must account for these provincial differences.
T4 Filing Statistics
T4 slips are the backbone of Canada's employment income reporting system.
Frequently Asked Questions
What if an employee didn't receive their T4 slip?
Do contractors receive a T4?
Can an employer issue an electronic T4 instead of a paper copy?
What are the penalties for filing T4 slips late?
How do I handle T4 slips for employees who worked in multiple provinces?
Written by Adithyan RK