Transcript

Host: Welcome to the segment called Completing T4 and T4A slips and summaries, part of the Preparing T4 and T4A Information Returns – Slips and Summaries video.
In this segment we mention links where you can get more information. You can find them in the Related links for this segment.

I’m Kathleen Sinclair, your host for this segment.

With me is Frank Stewart. Welcome Frank.

Subject matter expert: Thank you Kathleen.

Host: What do I need to do before I complete T4 and T4A slips?

Subject matter expert: Well, first you need to know how many slips you’ll be filing.

Host: Can't I just count the slips after I complete them?

Subject matter expert: No. It’s the number of slips you have to file that will decide what method you’ll use for filing them.

For example, you can’t file paper returns if you have over 50 slips of a particular type to submit.

For more information on the various filing options available for the number of slips you’re filing, go to the segment called Methods of filing in this video.

Host: What else should I do before filing my slips and summary?

Subject matter expert: Well, by now you should have also obtained the individual's social insurance number, or SIN. It is extremely important that you enter the correct SIN and name on each slip. Even if you don't have the SIN, you still have to complete a return and file it with the information available.

Please keep in mind that you could be penalized if you don’t have the SIN and can’t prove that you tried to get it.

For more information, see the segment Penalties and interest in this video.

Host: That’s good to know. So let’s say I have everything I need, and I’m ready to start preparing the T4 slips. Are there any specific rules for completing them?

Subject matter expert: Actually, yes. The following general guidelines will help you complete information slips correctly.

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.

If you don’t have to enter an amount in a box, do not enter “nil”—leave the box blank. The exceptions are boxes 24 and 26 on the T4 slip. You have to fill out these boxes in all situations up to the yearly maximum, even when the amount to report is zero.

Do not change the headings of any of the boxes.

If you had an employee who worked in more than one province or territory during the year, prepare a separate T4 slip for the earnings and deductions that apply to each province or territory.

Host: What if I have an employee who is on more than one payroll account?

Subject matter expert: If you had an employee who was on more than one payroll program account—for example, on different payroll deduction accounts—prepare a separate T4 slip for the earnings and deductions that apply to each program account.

Host: Do I have to make multiple copies of the slips?

Subject matter expert: Yes, you do. Make sure that you prepare four copies of each slip and two copies of the corresponding summary.

Host: Why do I need to complete four copies of each slip?

Subject matter expert: When filing information returns, you have to send a copy of each slip and the summary to the CRA, and keep a copy for your own records. You also have to give the employee or recipient two copies of their slip.

The CRA recommends printing the two copies of the slip for the employee or recipient on one sheet of paper.

Mail the slips to the employee’s last known address or deliver them in person. You can also make the slips available to the employee in an electronic format if the employee gave you consent in writing to do so.

Host: And what if I don't have their current mailing address?

Subject matter expert: Then you should hold onto their copies of the information slips. The employee will likely contact you to get them or, if they ask the CRA for the slips and the CRA can’t provide them, the CRA will tell the individual to contact you.

Host: Okay, I'll be sure to keep that in mind. Is there anything else I should remember before continuing?

Subject matter expert: As you go through your books, separating the income and deductions, remember that you have to report income in the year it was paid, regardless of when the services are performed or rendered.

For example, if you paid an individual in January for work they performed in December, then you report the income on the T4 or T4A slip for the year that starts in January.

Host: And where do I report amounts on a T4 or T4A slip?

Subject matter expert: On both T4 and T4A slips, there are numbered boxes indicating where to report specific types of payments and deductions.

Host: How does the CRA know if I've calculated the deductions correctly?

Subject matter expert: Each year, the CRA checks the CPP and EI deductions reported on the T4 slips that you filed with your T4 Summary.

The CRA does this to make sure the pensionable and insurable earnings you reported agree with the deductions you withheld and remitted.

The CRA checks your calculations by matching the pensionable and insurable earnings you reported with the required Canada Pension Plan contributions or employment insurance premiums shown in the payroll deductions tables.

This is known as a pensionable and insurable earnings review, or PIER for short.

If there are any deficiencies between the CPP contributions or EI premiums required to be deducted and those you reported on the employee's T4 slip, the CRA will show these on a PIER listing and send it to you for review. If you receive a PIER listing, you should either make a payment or explain the reason for the deficiencies.

For more information on PIER listings, see the segment of the video called After you file information returns.

More information is also available on the CRA’s PIER webpage.

Host: What if some of my employees’ income was not subject to Canada Pension Plan contributions or employment insurance premiums? How will the CRA know how much was subject to deductions?

Subject matter expert: There are boxes on T4 slips where you enter the earnings that were used to calculate the deductions. In box 24 on a T4 slip, you report the total insurable earnings for employment insurance purposes and in Box 26 you report the Canada Pension Plan pensionable earnings.

Host: What if a specific type of payment doesn’t appear to have its own box on a T4 or T4A slip? Is there any way to show these amounts?

Subject matter expert: Both slips have an area called “Other Information” where you report amounts that don’t have their own box.

On T4 slips, the Other Information area has boxes where you enter codes and amounts that relate to employment commissions, taxable allowances and benefits, deductible amounts, fishers’ income, and other amounts that might apply.

On a T4A slip, the Other Information area has boxes for you to enter codes and amounts that relate to other types of payments, such as charitable donations, medical premium benefits, research grants, veteran’s benefits, and other amounts.

Host: And where do you get these codes you're talking about?

Subject matter expert: The codes and how to report them are available in the following publications:

• RC4120, Employers’ Guide – Filing the T4 Slip and Summary, and
• RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary.

You can also go to www.cra.gc.ca/slips and select either "T4 – Information for employers" or "T4A – Information for payers."

The codes are also listed on the back of each slip so the recipient can see what type of income or deduction is reported.

Host: Okay. Let's say I filled out all of the necessary T4 and T4A slips. Is there anything else I need to do?

Subject matter expert: You then add up the income amounts and the deduction amounts from all the T4 slips for all employees onto a T4 summary, and all the amounts from all the T4A slips onto a T4A summary.

Host: How do I fill out the summary sheet?

Subject matter expert: As you’ll notice on the summary, many of the box numbers match those on the information slips. For example, box 14 on the T4 summary refers to box 14 on the T4 slip.

So, to summarize the information from the slips, you add up the amounts in each box number from every slip and enter the total on the corresponding summary sheet. The same rules apply for T4 slips and T4A slips.

Host: And why do I have to provide a summary?

Subject matter expert: A summary compares the total deductions you reported on the slips with the remittances you made throughout the year.

Host: What if there’s a difference between the two? For example, what if I’m preparing my summary and the total remittances I paid for the year are more than the total deductions I reported from all of the T4 slips?

Subject matter expert: If you remitted more than you deducted, you’ve overpaid.

If you overpaid, attach a note to your return stating the reason for the overpayment and whether you want the CRA to transfer this amount to another account or another year or if you want them to refund the overpayment.

Host: And what if my total remittances paid for the year are less than the total deductions I reported from all of the T4 slips?

Subject matter expert: If you remitted less than the total deductions you reported, then you underpaid. This means you owe an amount to the CRA.

Remit any shortage as soon as possible. For a list of payment options, go to www.cra.gc.ca/payments.

For information on how to correct payroll remitting errors, go to the CRA webpage on that topic.

Host: Perfect. Where can I get line-by-line instructions on how to complete T4 and T4A slips?

Subject matter expert: More information is available in the following publications:

• RC4120, Employers’ Guide – Filing the T4 Slip and Summary; and
• RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary.

Information is also available in the CRA video called Payroll Information for a New Small Business.

You can also go to www.cra.gc.ca/slips and select either "T4 – Information for employers" or "T4A – Information for payers."

Host: Thank you Frank.

This concludes the segment called Completing T4 and T4A slips and summaries, part of the CRA’s Preparing T4 and T4A Information Returns – Slips and Summaries video.

Thank you for watching.