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T4 slips and the T4 Summary

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The T4 is the other side of the slip an individual receives, and reading it from the employer's end changes what it is: not a statement of what an employee earned, but a return in which an employer reports what they paid and what they withheld, reconciled against what they actually remitted. That reconciliation is the point. CRA compares the totals on the summary with the remittances received, and compares the CPP and EI reported against what the reported earnings imply — which is how errors made months earlier surface. This tutorial covers what goes on a slip, what the summary does, the deadline and what missing it costs, and how a slip is corrected once filed.

How to work through this tutorial

This covers the year's reporting from the employer's side: 1. Understand what the T4 is as a filing, not as a document an employee receives. 2. Learn who gets a slip and when one is required. 3. Learn what the slip reports, and the boxes that carry the most trouble. 4. Learn what the T4 Summary does and what it is reconciled against. 5. Learn the deadline, the filing method, and the penalties. 6. Learn how a slip is amended, cancelled or added after filing. 7. Work through an example of a reconciliation that did not balance. 8. Check your work against the common errors. 9. Verify every specific against CRA's published guidance before relying on it.

A return, not a receipt

From the employee's side a T4 is a document that arrives and gets typed into a return. From the employer's side it is a filing with CRA, and the copy given to the employee is a by-product of that filing. The distinction matters because obligations attach to the filing. An employer who gave every employee a slip but never filed with CRA has not met the obligation. An employer who filed on time but did not distribute copies has not met it either — both are required. It matters again for corrections. An employee who spots an error asks their employer to "fix the T4", and what that actually requires is an amended filing to CRA, not a corrected printout.

Who gets a slip

An employer files a T4 slip for each employee who received remuneration in the year where any of the ordinary conditions apply — broadly, where deductions were required, or where remuneration exceeded the reporting threshold CRA specifies. A slip is required even where no tax was withheld, if the other conditions are met. Employers routinely assume that no withholding means no reporting, and that is the wrong way round: the reporting obligation is about what was paid, not about what came off it. A slip is required for an employee who left during the year, for an employee who was paid after death, and for former employees who received taxable amounts. Employers reliably forget the leavers. Other slips exist for other kinds of payment — pension and other income, and payments to certain non-employees — and putting an amount on a T4 that belongs on a different slip is its own category of error.

What the slip reports

The slip reports the employee's identifying information, their employment income, the deductions withheld, and a set of additional amounts in numbered boxes. Three areas generate most of the errors. **Employment income** must include taxable benefits, not only cash pay. An employer who has handled benefits loosely all year discovers it here. **Pensionable and insurable earnings** are reported separately from total income, because they can differ from it and from each other. This is where the divergences described in the withholding and benefits tutorials become visible, and where CRA's year-end review looks. **The other-information boxes** carry specific amounts — particular benefits, particular deductions, employment in special circumstances. Which code goes with which amount is published, and it is exactly the sort of detail to look up. A pension adjustment, where the employer sponsors a registered plan, is reported here too, and it feeds the employee's RRSP room for the following year. This tutorial does not list box numbers, deliberately. Take them from the guide for the year being filed.

The summary and what it reconciles

The T4 Summary reports the employer's totals for the year: total employment income, total deductions of each kind, and the total remitted. Its function is reconciliation. CRA compares what the employer reported withholding against what the employer actually remitted across the year. A difference is a balance owing or a credit, and it has to be explained rather than left. An employer whose summary shows they withheld more than they remitted has an under-remittance, whatever the cause — and the cause is often a remittance directed to the wrong account, exactly as in the level 1 example. An employer who remitted more than they withheld has over-remitted, which is recoverable but not automatically. Separately, CRA compares the CPP and EI reported against what the reported pensionable and insurable earnings would imply. That comparison is the pensionable and insurable earnings review, which has its own tutorial at level 3.

Deadline, method and penalties

The T4 information return — slips and summary — is due by the last day of February following the calendar year it covers. Where that falls on a weekend or holiday, the ordinary next-business-day treatment generally applies. The same date applies to giving employees their copies. Filing is electronic above a threshold number of slips, and CRA has lowered that threshold, so an employer who filed on paper in the past may no longer be permitted to. Confirm the current threshold rather than assuming. The penalty for filing late is based on the number of slips, with a minimum, and it escalates in bands as the number of slips rises. There are separate penalties for failing to file electronically when required and for failing to provide copies to employees. None of these figures should be quoted from memory; they are published and they are precisely what an employer will act on. Where an employer stops operating mid-year, the return is due earlier than the ordinary date — the deadline runs from the end of the business rather than from the end of the calendar year, which is the subject of the closing tutorial at level 3.

Correcting a filed slip

Three situations, three treatments. **An amount was wrong** — the slip is amended. The amended slip replaces the original, and the employee needs the corrected copy. **A slip should not have been filed at all** — it is cancelled. **A slip was missed** — an additional slip is filed. An employer who realises in June that a departed employee never received one files then; the obligation does not lapse because the deadline passed. An amendment can have consequences beyond the slip. If it changes pensionable or insurable earnings, it changes what should have been contributed. If it changes employment income, the employee's assessed return is now wrong, and the employee will need to deal with that on their side. An employer asking whether it is worth amending a small error should be told the honest answer: the employee's return is based on it, and an unamended slip pushes the problem onto them.

A worked example: the summary that did not balance

Teaching example. The figures below are invented to show the method. They are not CRA figures, and no amount here should be used for a real taxpayer.

The figures in this example are invented for teaching. Nothing here should be quoted as CRA's position. Suppose Okonkwo Ltd has nine employees and files its T4s in February. The summary shows total income tax withheld across the year of, say, $61,200. CRA's records show remittances of $55,050. The difference — $6,150 — is a single monthly remittance. It is the one from the level 1 example: paid on time, directed to the wrong program account, and sitting as a credit somewhere it was never needed. Two things are worth noticing about how this surfaced. First, it surfaced in February, about a March payment, because the reconciliation happens once a year. Eleven months of penalty and interest accumulated on a balance the employer believed was paid. Second, the employer's own records were right all along. Their bookkeeping showed the payment made. Nothing internal would ever have caught this; only the reconciliation against CRA's records could. That is the argument for a practice an employer can adopt: check remittances against the account periodically rather than discovering the mismatch at year end. It costs a few minutes a month and it turns an eleven-month problem into a one-month one. On the call, the useful sequence is to identify the discrepancy, establish that the money is present but misapplied, request the transfer, and only then discuss whether any relief from the interest is worth requesting.

Common errors

Treating the T4 as a document for the employee rather than as a filing with CRA. Both obligations exist. Assuming no withholding means no slip. The reporting obligation is about what was paid. Forgetting employees who left during the year. Omitting taxable benefits from employment income. Reporting pensionable or insurable earnings as equal to total income without checking. Quoting box numbers or other-information codes from memory. Quoting the electronic filing threshold from memory. CRA has lowered it. Quoting late-filing penalty amounts or bands from memory. Telling an employer a small error is not worth amending. The employee's return depends on it. Assuming a missed slip cannot be filed after the deadline. It can, and should be. Assuming the ordinary deadline applies to an employer who ceased operating mid-year. It does not.

What to verify this tutorial against

This was drafted without a source document. Box numbers, thresholds, deadlines and penalty amounts are all published, and every one is the kind of specific a model misremembers. CRA's employers' guide to filing the T4 slip and summary is the primary reference: who must file, what goes in each box, the other-information codes, the deadline, and the amendment process. Confirm its current number and title. CRA's guidance on filing information returns electronically sets out the current threshold above which electronic filing is mandatory, which has been lowered. Take it from the page. CRA's penalty guidance for information returns carries the late-filing penalty structure, its bands and its minimum, and the separate penalties for failing to file electronically and for failing to distribute copies. CRA's employers' guide to payroll deductions and remittances is the reference for the reconciliation between reported withholding and remittances received. CRA's guidance on amending, cancelling and adding slips covers the three corrections described here. The registered plans line's tutorial on the pension adjustment is the reference for the PA reported on the T4; check the two for consistency when either is revised. CRA's guidance for an employer who ceases to operate is the reference for the earlier deadline noted at the end.

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