Did you hire employees for the first time last year?
Don’t forget: tax season is right around the corner and that means your workers need you to fill out their T-4 tax slips.
A T-4, or Statement of Remuneration Paid, accounts for each employee’s income paid during the tax and the amount of income tax deducted. The income can include salary, bonuses, vacation pay, tips, honorariums, commissions, taxable allowances (eg. vehicle), the value of taxable benefits and payment in lieu of notice.
As a small business owner in Canada you have to complete T-4 slips for all individuals who earned income from you during the taxation year if you paid them more than 500 or if you deducted CPP/QPP contributions, EI premiums, PPIP premiums or income tax.
Your employees must receive their T4 slips by the last day of the February following the taxation year. If you miss the deadline — this year, it’s Friday, February 28 — you are subject to fines, based on how slips are late and how long you go before getting them to your employees.
Filling out T-4 slips
The Canada Revenue Agency is picky about how T4s are filled out.
As an employer, you must:
- Complete the slips clearly
- Report, in dollars and cents, all amounts you paid during the year, except pension adjustment amounts, which are reported in dollars only
- Report all amounts in Canadian dollars, even if they were paid in another currency
- Do not enter hyphens or dashes between numbers or names
- Do not enter the dollar sign ($)
- Do not show negative dollar amounts on slips; to make changes to previous years, send amended slips for the years in question
- Leave a box blank instead of entering ‘nil’ or ‘0’
- Do not change the headings of any of the boxes
Find more detailed instructions for each box on the T-4 slip on theCRA’s web page, Completing the T-4 slip.
The CRA has a great video series on completing T-4 and T-4A slips.Check it out.
Here to help
A1 Accounting, a Calgary accounting and bookkeeping firm, is here to assist you with your taxes and planning. We specialize in personal taxes and small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.
Fill out our contact form or give us a call at 403-226-8297.