What is a T4 slip?

A T4 slip is a tax document that Canadian employers issue to their employees that details their annual employment income and deductions.

Officially termed the "Statement of Remuneration Paid," T4 slips serve as an essential record for both employees and the Canada Revenue Agency (CRA) when filing income tax returns.

Purpose of the T4 slip

The T4 slip's primary function is to report employment income and the deductions taken throughout the calendar year for all employees. It ensures both individual employees and the CRA have accurate records of earnings and the taxes or contributions withheld, facilitating the correct calculation of tax obligations.

The T4 slip must be completed with respect to any employee who fits at least one of the following two criteria:

• Is not on an exception list and earned more than $500 (CAD) per year
• Has had CPP (Canadian Pension Plan)/QPP (Quebec Pension Plan), EI (Employment Insurance), PPIP (provincial parental insurance plan), or income tax deducted from remuneration payments

Information included on a T4 slip

A T4 slip contains several key pieces of information:​

• Employment Income (Box 14): This box shows total earnings before deductions, including salary, wages, bonuses, and vacation pay
• Income Tax Deducted (Box 22): The total federal and provincial income tax withheld from pay during the year
• Canada Pension Plan (CPP) Contributions (Box 16): The amount contributed to the CPP, applicable if you reside outside Quebec
• Quebec Pension Plan (QPP) Contributions (Box 17): The amount contributed to the QPP—applicable if you reside in Quebec
• Employment Insurance (EI) Premiums (Box 18): Total EI premiums deducted from earnings
• Registered Pension Plan (RPP) Contributions (Box 20): Contributions made to an employer's RPP, if applicable
• Pension Adjustment (Box 52): Reflects the value of the benefits earned in an employer's pension plan, which can affect the RRSP contribution

The section of the T4 return for “Other Information” allows for the reporting of specific circumstances including medical travel assistance (code 33), deductions for the Canadian armed forces and police (code 43), and tax exemptions that fall under the Indian Act (code 71).

See the full description of these special circumstances and exemption codes.

Importance of the T4 slip

The T4 slip is essential to employees for accurately filing an income tax return.

It provides a comprehensive summary of earnings and deductions, ensuring workers report the correct amounts to the CRA. Accurate reporting helps prevent issues such as reassessments or audits. ​

For employers, completing and filing the T4 annually for each eligible employee is a mandatory function.

Penalties apply for late filed returns, ranging from $10 per day for up to 50 T4 slips to a maximum penalty of $7500 (companies with more than 10,000 employers). Small businesses pay reduced fines, under the government’s “relieving administrative policy.”

Deadlines and distribution

Employers are required to distribute T4 slips to employees and submit them to the CRA by the last day of February following the tax year in question. This date applies even if the employee leaves the company during the relevant fiscal year.

For example, for the 2025 tax year, T4 slips must be issued by February 28, 2026. Employers can provide T4 slips in paper format or electronically, but electronic distribution requires your consent. ​

What employees should do if they notice errors

If an error is identified on a T4 slip, such as incorrect income amounts or deductions, employees should contact their employer's payroll department promptly.

Employers are responsible for correcting the mistake and issuing an amended T4 slip to both employees and the CRA. Employees should not file their tax return until they receive the corrected slip to preserve accuracy.

T4 slip and taxable benefits

In addition to employment income, a T4 slip includes taxable benefits provided by an employer, such as employer-offered dental benefits, group life insurance, and company vehicles.

These benefits are considered part of an employee’s compensation and are subject to income tax, CPP/QPP contributions, and employment insurance premiums.

Common taxable benefits include:

• Health and dental benefits: If fully employer-paid, these may be taxable
• Company cars: The personal use portion of a vehicle provided by the employer must be reported
• Stock options and equity compensation: Any taxable gains must be recorded

Employers must calculate and report these benefits accurately in Box 40 (Other Taxable Benefits) and other relevant sections to avoid compliance issues.

Deel’s Payroll Guide for Canada provides further insights into mandatory actions for employers.

Special considerations for specific periods

Employment earnings can sometimes span multiple tax years or irregular pay periods, such as "July 5 to August 29" or "August 30 to September 26." This is particularly relevant for seasonal, contract, or commission-based employees.

Key considerations include:

• Payroll cycles that cross tax years: Ensure wages are reported in the correct period
• Mid-year hires and terminations: Prorated earnings must be accurately documented
• Bonuses and retroactive pay: These should be assigned to the appropriate tax year

Employers using automated payroll solutions can streamline period-based reporting and ensure compliance. Deel Global Payroll simplifies cross-border payroll management.

Social insurance number (SIN) and privacy

A T4 slip includes an employee’s Social Insurance Number (SIN), which is legally required for tax reporting but also a potential target for identity theft. Employers must:

• Store SINs securely in encrypted payroll systems with limited access
• Avoid requesting or transmitting SINs via unsecured emails or paper forms
• Dispose of SIN records responsibly when no longer needed

If a SIN is compromised, employees should contact Service Canada immediately. Employers seeking secure payroll solutions can explore Deel's hiring solutions in Canada.

How to simplify T4 reporting and filing

T4 slip accuracy is critical for tax compliance and avoiding CRA penalties. Employers must ensure proper reporting of taxable benefits, payroll periods, and SINs to prevent errors. Automated payroll solutions help streamline this process and reduce administrative burden.

For further guidance, explore:

• Guide to Running Payroll in Canada
• Employer Costs in Canada
• Workers’ Compensation in Canada

T4 returns are a vital part of any Canadian employer’s payroll operations. Accurate T4 filing ensures compliance, protects employees, and maintains operational efficiency.