What is a t4 slip | What Canadian Employees Should Know

What is a T4 slip? What Canadian Employees Should Know

T4 slips are commonly known as Income Tax Forms. We will talk about what is a t4 slip. They’re given to every employee once a year after filing taxes, just in case any numbers were out of balance- which can happen pretty easily.

T4 Slips keep a record for you of all of your income for the year and withholdings that were made from the government.T4 slips also contain information regarding how much insurance coverage the company has provided for you (in short, how much money is given to an employee when he/she falls ill) more information about taxes visit our site.

Because these T4 forms are normally given at the end of August or September, people gained a sort of “slip” saying where they should go during tax time that becomes their 2nd name when going up to do their taxes.

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What exactly is a T4 slip?

April 15 comes around each year and every tax filer is required to submit a T4 slip as a way of showing your income information (What is a T4 slip). In conjunction with income, one should also input their employment expenditures for the year so that any reductions for such things as HST (Harmonized Sales Tax) are known before you file taxes on April 30th. T

The T4 form contains the gross salaries, deductions, and net wages and will be filed with your annual or quarterly taxes accordingly.

Who gets a T4 slip?

T4 Slip

If you are a Canadian resident entity, and you are employed by a Canadian company, the business will issue you employee slip T4. You will have to submit it with your annual tax return to claim any deductions or exemptions. Your employer’s CRA business number is also included on the T4 and it can only be claimed by one branch.

How Can I Get My T4?

When you’re an employee, you have taxes deducted from your earnings. This is what slips like T4 are for, and they tell you how much the government has taken out of your paycheck. They also tell you (What is a T4 slip) how much tax you will have to pay when filing your income taxes.

When you get a T4 slip, it’s important to check that all of the information on it (such as federal and provincial tax deductions) is accurate. If any information is missing or incorrect, contact your employer immediately and ask them to clarify the matter or reissue a new T4 slip to reflect the changes so that neither party makes any mistakes by filing their taxes too early.

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What a T4 slip tells you

What a T4 slip tells you

A T4 slip is fairly simple to fill out – as all of the relevant information is filed into boxed sections that display what each area represents. Key areas on the T4 slip to be aware of are as follows :

  • Box 12: Your Social Insurance Number
  • Box 14: Your income net of taxes, salary is how much you make after paying your taxes.
  • Box 16: The amount you would have contributed under the Canada Pension Plan had you been covered.
  • Box 17: The amount you paid into the Quebec Pension Plan if you were a resident of Quebec at any point since 1977.
  • Box 18: The amount paid into Employment Insurance can be pretty hefty but, at the same time, it is all worth it.
  • Box 22: Your income tax is deducted from your paycheques.

Your employer may include (What is a T4 slip) a lot of benefits in your work package this year so don’t overlook the details! For example, you might be able to deduct charitable donations and Cal Transit passes you paid for directly from your pay.

What are the different T4 slips?

What are the different T4 slips?

  • T4A – Statement of Pension, Retirement, Annuity, and Other Income
  • T4A(OAS) – Statement of Old Age Security
  • T4A(P) – Statement of Canada Pension Plan Benefits
  • T4E – Statement of Employment Insurance and Other Benefits
  • T4RIF – Statement of income from a Registered Retirement Income Fund
  • T4RSP – Statement of RRSP Income

Which T4 slip do I need if I received COVID-19 benefits?

  • Canada Emergency Response Benefit (CERB)
  • Canada Emergency Student Benefit (CESB)
  • Canada Recovery Benefit (CRB)
  • Canada Recovery Caregiving Benefit (CRCB)
  • Canada Recovery Sickness Benefit (CRSB)

What’s new?

Starting on July 1st of 2021, there will be revisions to the program concerning the amount that one can deduct from payroll taxes as “security options” for supporting staff. This may affect where you enter code 39 when preparing your T4 slip.

What to report and what not to report on T4 slips

What to report and what not to report on T4 slips

Types of income you should report on T4 slips

  • You have to report income on a T4 slip for the year during which it was paid, regardless of when the services are performed. For example, you pay your employee in January 2021 for the income they earned in December 2020. You will have to report that income on their T4 slip for 2021 since that is the year it was paid.
  • For people in Canada, particularly businesses that pay employees to complete tasks and take on responsibilities (What is a T4 slip), a salary is a form of remuneration paid in cash.
  • Taking into account other forms of remuneration like bonuses, tips or gratuities, vacations, etc are also significant considerations because they can affect how much money an employee earns during a year.
  • A key consideration for the average Canadian worker is their annual salary which ranges from $22,000 – $47,500 annually.

Types of income you should not report on T4 slips

  • If you made pension payments to your employees, including to a child aged 18 or older, and certain other payments such as annuities and lump-sum amounts, see Guide RC4120, T4A-NR – Payments to Non-Residents for Services Provided in Canada.
  • If you paid fees, commissions, or other amounts to a non-resident for services performed in Canada on behalf of anyone resident (except if the nature of the services is employment), see Guide RC4445, T4A-NR – Payments to Non-Residents for Services Provided in Canada.
  • Also, see this guide if you are an employer with construction being your primary income source and you made payments under building contracts to subcontractors who did most of the work (What is a T4 slip).
  • If you paid money from a retirement compensation arrangement due to retiring age or disability, see Guide T4041, Retirement Compensation Arrangements, for information on how and when to file returns.

What if there is a mistake on my T4 slip?

What if there is a mistake on my T4 slip

If you notice that there is an error on your T4 slip, contact the payroll department of the employer right away. You are not allowed to alter the slip on your own.

Penalties for failure to file returns on time

Penalties for failure to file returns on time
Number of information
returns (slips) filed late
Penalty per day
(up to 100 days)
Maximum
penalty
1 to 5 penalty not based on number of days $100 flat penalty
6 to 10 $5 $500
11 to 50 $10 $1,000
51 to 500 $15 $1,500
501 to 2,500 $25 $2,500
2,501 to 10,000 $50 $5,000
10,001 or more $75 $7,500

Failure to file information returns over the Internet

Number of information
returns (slips) by type
Penalty
 
51 to 250 $250
251 to 500 $500
501 to 2,500 $1,500
2,501 or more $2,500

What if I lose my T4 slip?

If you lose your T4 for some reason, it’s okay because it isn’t essential to return your tax return. The most important thing is that you have all the other paperwork that is required.

Since getting a new one can take time, it should be noted that there are options to make this (What is a T4 slip) much smoother so you won’t be delayed any further. Registering online with the CRA and making sure you keep everything backed up would be your best bet.

Also, talking to them about what would be the fasted way possible to get your slip back in hand after it has been lost or misplaced will save everyone time.

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Amending, canceling, adding, or replacing T4 slips

Amending, canceling, adding, or replacing T4 slips

Amending T4 slips

If you are an employee: If you are an employee when it’s come to tax season and you receive a weird amended T4 as part of your pay stub, don’t look a gift horse in the mouth! You should contact your employer if you are unsure (What is a T4 slip) or have questions about this.

Amending slips over the Internet: To amend an error, change only the incorrect information and retain all of the remaining information from a T4 slip online by using Summary Report Type A and Slip Report Type-A. To learn more, go to Filing Information Returns Electronically (T4/T5 and other types of returns).

Adding T4 slips

Adding slips electronically: To file additional slips electronically go to 

Adding slips on paper: When submitting additional slips on paper, clearly identify the new slips by writing “additional” at the top of each slip. In addition to submitting a copy of (What is a T4 slip) these additional slips to any national verification and collection center, please explain the reason for these additions in an accompanying letter.

Canceling T4 slips

Canceling slips over the Internet: There’s no point in relying on the hassle of slips you’ve already sent and overpaying the IRS, so if your information needs to be corrected, there are a couple of ways of doing so – one being canceling your original submission and filing all new papers with any changes.

Replacing T4 slips

Copies of your issued T4s are very important to verify that all taxes have been remitted. If at any point you find yourself needing replacements, it is not necessary to submit a copy of the destroyed documents to the CRA.

However, before distributing them to your employees, clearly identify these copies as “DUPLICATE” and keep them with (What is a T4 slip) your records as proof.

Online services Of CRA

Online services Of CRA

  • apply for COVID-19 support payments
  • make a payment to the CRA online with My Payment or a pre-authorized debit agreement, or create a QR code to pay in person at Canada Post
  • request a payment search
  • file or amend information returns without a web access code
  • submit documents to the CRA
  • authorize a representative for online access to your business accounts
  • register to receive email notifications and to view (What is a T4 slip) mail from the CRA in My Business Account
  • manage addresses
  • manage direct deposit information
  • View and pay an account balance
  • calculate installment payments
  • provide a nil remittance
  • transfer misallocated payments
  • download reports

How long should I keep my T4?

The Canadian government strongly recommends that Canadians keep any records from the last six years as long as they are directly related to a taxation year. This is so we have documentation (What is a T4 slip) on hand that’s needed if one happens to be audited by the CRA. One will be subject to penalties if they are discovered not having complete documentation on time during a hypothetical audit.

DND T4/Relevé 1 slips available on February 23, 2022

DND T4/Relevé 1 slips available on February 23, 2022

  • By March 4th, 2022, employees will be able to access their next year’s taxes by signing in to their My Account.
  • Former employees, as well as those who are on leave and do not have access to the Phoenix Self-Service, will be mailed a copy of their transcribed version.
  • However, if the new employees or future retirees do not receive this mail by March 7th, they should call PSPC’s Client Centre for further assistance.
  • The tax slips are sent to the home address as recorded in Pay Modernization and Phoenix at the time when such information is provided.

The Bottom Line

The T4 Summary is a template that an employer uses to compile the employee records they have maintained throughout the calendar year. It represents all of the tax info they have gathered on each employee and is sent to the tax authorities in February of every year.

The T4 Summary is a great place to look for information on an employee’s taxable income, as well as the total insurable earnings accumulated over their year. This card also contains information on both employer and employee contributions made for EI, CPP, and taxes.

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