Form T4

Form T4, officially known as the Statement of Remuneration Paid, is one of the most essential payroll tax documents in Canada. Issued annually by employers, the T4 slip reports an employee’s total employment income, statutory deductions, taxable benefits, and other compensation paid during a calendar year. Every Canadian employer who pays salary, wages, bonuses, commissions, vacation pay, or taxable benefits must file T4 slips with the Canada Revenue Agency (CRA) and provide copies to employees for their personal income tax filings.

For multinational organizations operating in Canada, accurate and timely T4 reporting is a legal obligation. Errors in CPP contributions, EI premiums, or employment income reporting can trigger CRA reviews, costly penalties, and Pensionable and Insurable Earnings Review (PIER) reports. That is why global businesses rely on Mercans, a global leader in payroll technology and Employer of Record (EOR) services, to manage Canadian payroll compliance across all provinces and territories.

What Is Form T4?

The T4 slip is the CRA-mandated information return that documents an employee’s earnings and deductions for a calendar year (1 January to 31 December). It serves as the foundation of Canadian year-end payroll reporting and is essential for both employer compliance and individual tax filing.

Key purposes of Form T4:

• Reports total employment income earned by the employee in the calendar year.
• Documents Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) contributions.
• Records Employment Insurance (EI) premiums withheld.
• Captures federal and provincial income tax deducted at source.
• Reports taxable benefits, allowances, and special compensation items.
• Identifies pension adjustments under registered pension plans (RPP) or deferred profit sharing plans (DPSP).
• Indicates employer-offered dental benefits coverage status.
• Provides the basis for the employee’s T1 personal income tax return.

The T4 slip is paired with the T4 Summary (T4SUM), which consolidates totals from all T4 slips an employer issues for the year and reconciles them against payroll remittances made to the CRA throughout the year.

Who Must File Form T4?

Under Canadian Income Tax Act regulations, every employer who pays remuneration during the calendar year is required to file T4 slips for qualifying employees.

Employers must issue a T4 slip if any of the following apply:

• Employment income, taxable benefits, or other remuneration of $500 or more was paid in the year.
• CPP, QPP, EI, or income tax was deducted from the employee’s pay.
• The employee earned pensionable, insurable, or taxable income, regardless of total amount.
• Provincial Parental Insurance Plan (PPIP) premiums were deducted in Quebec.
• Group term life insurance taxable benefits were provided.

T4 slips must be issued to:

• Full-time and part-time employees.
• Casual, temporary, and seasonal workers.
• Employees who left during the year (the slip still covers the period worked).
• Employees in multiple provinces (a separate T4 slip is required for each province of employment).
• Canadian Armed Forces personnel and police officers on international missions.
• Volunteer firefighters and search and rescue volunteers (with specific code reporting).

T4 is NOT used for:

• Independent contractors and self-employed individuals (they receive a T4A slip instead).
• Pension recipients (issued a T4A for pension and other income).
• Quebec residents requiring provincial reporting (Quebec employees also receive an RL-1 slip from Revenu Québec).

For global companies entering the Canadian market, Mercans’ Canada Employer of Record and payroll services ensure correct worker classification, accurate T4 issuance, and full CRA compliance without the need to set up a Canadian legal entity.

Key Boxes and Sections of the T4 Slip

The T4 slip contains numerous numbered boxes, each capturing specific tax-relevant information. Understanding each box is essential for both employers preparing the slip and employees reviewing their year-end records.

Employee and Employer Identification

• Box 10, Province of Employment: Two-letter code indicating where the employee was employed (for example, ON for Ontario, QC for Quebec, BC for British Columbia, AB for Alberta).
• Box 12, Social Insurance Number (SIN): The employee’s nine-digit SIN.
• Box 14, Employment Income: Total gross employment income before deductions.
• Box 54, Payroll Account Number: The employer’s 15-character CRA business number (for example, 123456789RP0001).

Statutory Deduction Boxes

• Box 16, Employee’s CPP Contributions: Canada Pension Plan contributions deducted (excluding Quebec residents).
• Box 16A, Employee’s Second CPP Contributions (CPP2): Second additional CPP contributions, applicable for 2024 and subsequent years.
• Box 17, Employee’s QPP Contributions: Quebec Pension Plan contributions for Quebec residents.
• Box 17A, Employee’s Second QPP Contributions (QPP2): Second QPP contributions for 2024 and after.
• Box 18, Employee’s EI Premiums: Employment Insurance premiums withheld.
• Box 22, Income Tax Deducted: Total federal and provincial income tax withheld.
• Box 24, EI Insurable Earnings: Employment income subject to EI premiums (maximum $65,700 for 2025).
• Box 26, CPP/QPP Pensionable Earnings: Earnings used to calculate CPP or QPP contributions.
• Box 55, Employee’s PPIP Premiums: Provincial Parental Insurance Plan premiums (Quebec only).
• Box 56, PPIP Insurable Earnings: Earnings used to calculate PPIP premiums.

Pension and Adjustment Boxes

• Box 20, RPP Contributions: Registered Pension Plan contributions made by the employee.
• Box 50, RPP or DPSP Registration Number: Seven-digit CRA registration number.
• Box 52, Pension Adjustment (PA): Value of benefits earned under an RPP or DPSP.

Other Compensation Boxes

• Box 40, Other Taxable Allowances and Benefits: Total taxable benefits already included in Box 14.
• Box 42, Employment Commissions: Sales commissions paid to the employee.
• Box 44, Union Dues: Tax-deductible union dues withheld.
• Box 46, Charitable Donations: Donations to registered Canadian charities deducted at source.
• Box 45, Employer-Offered Dental Benefits: Mandatory since the 2023 tax year, reported using a numeric code from 1 to 5 indicating dental coverage status.

Other Information Codes

The T4 slip contains an “Other Information” section where employers report additional taxable items using specific codes:

• Code 30: Board and lodging benefits.
• Code 32: Travel in a prescribed zone.
• Code 33: Medical travel assistance.
• Code 34: Personal use of employer’s automobile or motor vehicle.
• Code 36: Interest-free or low-interest loans.
• Code 38: Security options benefits.
• Code 39: Security options deduction (paragraph 110(1)(d)).
• Code 40: Other taxable allowances and benefits.
• Code 41: Security options deduction (paragraph 110(1)(d.1)).
• Code 42: Employment commissions.
• Code 43: Canadian Armed Forces personnel and police deduction.
• Code 87: Volunteer firefighters and search and rescue volunteers exempt amount.

T4 Filing Deadlines for the 2025 Tax Year

The CRA enforces strict deadlines for T4 distribution and filing. Missing them triggers automatic financial penalties.

• 31 December 2025: End of the 2025 calendar year for T4 reporting purposes.
• 2 March 2026: Filing deadline for 2025 T4 slips and the T4 Summary, since 28 February 2026 falls on a Saturday.
• 2 March 2026: Deadline to provide T4 slips to employees.
• 15th of each month: Standard CRA payroll remittance deadline (varies by remitter type).

If the deadline falls on a Saturday, Sunday, or a public holiday recognized by the CRA, the next business day becomes the official due date. Employers filing more than five information returns must file electronically. The CRA accepts electronic submissions via Internet File Transfer (XML), Web Forms, or CRA-certified payroll software.

T4 vs T4A vs RL-1: Understanding the Differences

Canada uses several similar tax slips for different income types. Misclassifying which slip to issue is a common payroll error, especially for international employers managing both employees and contractors.

For Quebec employees, employers must issue both a T4 slip and an RL-1 slip to comply with federal and provincial requirements. Mercans’ Canada payroll solutions automate dual-jurisdiction reporting for Quebec employees seamlessly.

2025 and 2026 T4 Updates: What Canadian Employers Must Know

Several legislative and statutory updates affect T4 reporting for the 2025 and 2026 tax years. Staying current is essential to avoid CRA reviews and penalties.

• EI maximum insurable earnings for 2025: $65,700, with EI rates set annually by the CRA.
• CPP enhancement (CPP2): Continues for 2025, with second additional CPP contributions reported in Box 16A above the Year’s Maximum Pensionable Earnings (YMPE).
• CRA Payroll Deductions Formulas (T4127) and Tables (T4032): 2026 editions released with updated federal and provincial calculations.
• Quebec Pension Plan (QPP) and Quebec Parental Insurance Plan (QPIP): Updated rates announced for 2026.
• Mandatory dental benefits reporting: Box 45 remains mandatory for 2025 T4 slips, reporting whether the employee or family members were eligible for dental coverage on 31 December.
• Security options reporting: Do not file 2025 T4 slips before 12 January 2026 if codes 38, 39, or 41 are used for security options benefits.
• Electronic filing threshold: Employers filing six or more information returns must e-file.
• PIER reports: The CRA continues using Pensionable and Insurable Earnings Review reports to identify CPP and EI deficiencies on T4 slips.

For real-time updates on Canadian statutory payroll changes, Mercans publishes regular CRA statutory alerts covering CPP enhancement, EI rates, provincial tax tables, and QPIP updates.

The T4 Summary (T4SUM): Year-End Reconciliation

The T4 Summary, also known as the T4SUM, consolidates the totals from all T4 slips issued by an employer. It is filed alongside the T4 slips with the CRA and serves as a year-end reconciliation document.

Key components of the T4 Summary:

• Total employment income (sum of all T4 Box 14 amounts).
• Total CPP and CPP2 employee contributions plus the employer’s matching share.
• Total QPP contributions where applicable.
• Total EI premiums (employee + employer share).
• Total income tax deducted.
• Total pension adjustments.
• Total registered pension plan contributions.
• Total payroll deductions remitted to the CRA throughout the year.
• Differences (over-remittance or under-remittance) reported on lines 84 or 86.

If the total amount remitted differs from the total deductions reported, the CRA either issues a refund (over-remittance) or requests payment of the balance (under-remittance). Differences of $2 or less are typically not adjusted.

Penalties for T4 Non-Compliance

The CRA imposes financial penalties for late, incorrect, or unfiled T4 slips and Summaries. For 2025 reporting:

• Late filing penalty: Ranges from $100 to $7,500 depending on the number of slips filed late (1 to 50 slips equals $100, while 10,001+ slips equals $7,500 per day).
• Failure to file electronically: $250 to $2,500 penalty for employers required to e-file but who file on paper.
• Failure to provide T4 to employee: $25 per day, minimum $100, maximum $2,500 per slip.
• Failure to deduct CPP, EI, or income tax: 10% of the amount that should have been deducted, rising to 20% for repeated failures.
• Failure to remit payroll deductions: 3% to 20% of the amount, depending on how late the remittance is.
• Negligence or false statements: Up to 50% of the under-reported tax.

The CRA may also conduct payroll account audits, PIER reviews, and trust examinations for repeat offenders.

Common T4 Mistakes to Avoid

Even experienced Canadian payroll teams encounter recurring T4 errors. The most frequent issues include:

• Incorrect or missing Social Insurance Numbers (SINs).
• Mismatched employee names not aligning with CRA records.
• Wrong province of employment code in Box 10.
• Failure to issue separate T4 slips for employees who worked in multiple provinces.
• CPP contributions reported when QPP should apply (Quebec residents).
• Incorrect EI insurable earnings reported in Box 24.
• Failure to report taxable benefits in Box 14 with Code 40.
• Missing Box 45 dental benefits reporting (mandatory since 2023).
• Late filing past the last day of February deadline.
• Filing on paper when electronic filing is mandatory.
• Failing to issue an RL-1 slip alongside T4 for Quebec employees.

How Mercans Simplifies T4 and Canadian Payroll Compliance

Managing payroll in Canada is far more complex than running gross-to-net calculations. It requires deep understanding of CRA’s federal rules, provincial variations across 13 jurisdictions, Quebec’s unique RL-1 and Revenu Québec requirements, CPP enhancement, EI premiums, dental benefits reporting, and ever-changing legislation. For multinational businesses expanding into Canada, getting it right is mission-critical.

Mercans delivers a complete Canadian payroll and HR solution built for global employers:

• Native Canadian payroll processing with full CRA, federal, and provincial compliance.
• Automated T4 and T4A generation, distribution, and electronic filing with the CRA.
• Dual reporting for Quebec employees including T4 (CRA) and RL-1 (Revenu Québec).
• Employer of Record (EOR) services allowing global businesses to hire Canadian employees without setting up a local entity.
• Multi-province payroll engine handling reciprocity, residency rules, and province-specific deductions.
• HR Blizz™ SaaS platform unifying payroll, HR, and reporting across 160 countries.
• G2N Nova engine delivering accurate gross-to-net calculations with real-time compliance.
• Automated CPP, CPP2, QPP, EI, and PPIP calculations updated annually.
• Box 45 dental benefits tracking and reporting compliance.
• SOC 1, SOC 2, ISO 27001, and GDPR-certified data security.
• 24/7 in-country Canadian payroll specialists providing local expertise and global consistency.

With over 20 years of global payroll expertise, 8,000+ clients, and 160+ country coverage, Mercans is trusted by leading multinationals including Tesla, Uber, Airbus, Bayer, Adidas, Ericsson, and Johnson & Johnson.

Explore Mercans’ Canada Employer of Record and payroll services to see how your business can simplify T4 compliance and scale operations across Canada with confidence.

Frequently Asked Questions (FAQs)

Q1: When should employees expect to receive their T4 slip?

Employers must provide T4 slips to employees by the last day of February following the tax year. For the 2025 tax year, the deadline is 2 March 2026 (since 28 February 2026 is a Saturday).

Q2: What is the difference between T4 and T4A?

T4 reports employment income paid by an employer to an employee. T4A reports pension, retirement, annuity, fees for services, and other income, typically issued to self-employed contractors, pensioners, or scholarship recipients.

Q3: What if I worked in multiple provinces during the year?

Your employer must issue a separate T4 slip for each province of employment. This ensures that provincial tax credits and deductions are accurately calculated.

Q4: Why does my T4 not match my final payslip?

Your T4 reflects taxable income and statutory deductions, while your payslip may include items like pre-tax benefits, RPP contributions, or non-taxable allowances that adjust the totals.

Q5: Can I get a T4 if I am self-employed?

No. Self-employed individuals do not receive T4 slips. They typically receive T4A slips for fees for services, or report income through self-assessment.

Q6: How do I get a copy of a lost T4 slip?

Contact your employer’s payroll department first. Alternatively, log in to CRA My Account, where T4 slips submitted by your employer are typically available after late February.

Q7: What if there is an error on my T4?

Notify your employer immediately. They must issue a T4 amendment (or cancellation and replacement) and submit the corrected information to the CRA.

Q8: How long should T4 slips be kept?

The CRA recommends keeping all tax records, including T4 slips, for at least six years from the end of the tax year they relate to.