Every year when tax time rolls around, employees are presented with T4 slips. These documents are used to track income earned and deducted for the year. As a government document, T4 slips contain quite a lot of information regarding your income and play an important role when it comes to filing your taxes.
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What exactly is a T4 slip?
Its official title is a “T4 Statement of Remuneration Paid” form, though most Canadians just refer to it as a T4 slip. No matter what you call it, the T4 is a tax document that summarizes how much you’ve earned over the past year. Your T4 slip will also show any required deductions, such as employment insurance premiums or income tax, made by your employer. If you have multiple jobs, you should receive multiple T4s, one from each employer.
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Who gets a T4 slip?
If you are employed by a Canadian company, you’ll receive a T4 slip. You will need to use it to file your taxes. The business you work for will also send a copy of the T4 slip to the Canadian Revenue Agency, or CRA.
How T4 slips are delivered
Your T4 slip will be given to you by your employer. It may be a paper copy you receive in person or by mail, or a digital copy you get by email or through your employer’s online payment portal. Employers have until the end of February to issue T4 slips for the previous tax year. For example, you should receive your T4 slip for income earned in 2022 by the end of February 2023.
If you do not receive your T4 slip in a timely fashion, get in touch with your company. Verify your mailing address and ask them to reissue it to you.
What a T4 slip tells you
A T4 slip is pretty easy to read as all the information is filed into boxes that state what they are. The main boxes on the T4 slip to be aware of are the following:
- Box 12: Your Social Insurance Number (SIN).
- Box 14: Your employment income; salary earned before paying any taxes.
- Box 16: The amount you paid into the Canada Pension Plan (CPP).
- Box 17: The amount you paid into the Quebec Pension Plan, if you are a Quebec resident.
- Box 18: The amount paid into Employment Insurance (EI).
- Box 22: The amount of income tax deducted from your paycheques.
Depending on your employer you may also have boxes filled out for things like union dues, charitable donations, public transit passes, and employee-paid premiums for health plans. These can typically be deducted or claimed as expenses when you do your taxes.
Do I need to fully understand my T4 slip for taxes?
No, you don’t. When it comes time to do your taxes an accountant might take care of it all for you or, if you choose to prepare your own tax return, the software you use will probably guide you through and tell you what box number is needed to fill out each section.
Still, it’s a good idea to understand the information on your T4 slip for your own purposes, so know how much you are actually earning and paying into things like income tax, the Canada Pension Plan, employment insurance, and whether there are any mistakes in the calculations.
If there is something you are unsure of, ask the payroll office of your employer or a tax professional, and they should be able to explain it to you.
What to do if your T4 slip is lost
A T4 is required to accurately file your tax return. If you lose or misplace your T4 slip, ask your employer about what options you have to get it reissued. If your T4 was emailed or accessed through an online portal, you may be able to simply reprint it.
Registering for an online account with the CRA is also a good safety measure. Because your employer sends the CRA a copy of the T4, there should be a digital copy for you to access through the CRA’s My Account portal. Note that your T4 slip may not be available right away, as the CRA needs time to process it once they receive it from your employer.
Frequently asked questions about T4 slips
If you believe that there is an error on your T4 slip, get in touch with the payroll department of the employer who issued the slip. You are not allowed to change the slip yourself.
The government of Canada says that Canadians should keep all records for a minimum of six years from the end of the last tax year they relate to. This helps to ensure you have the documentation needed if you end up being audited.
There are several types of taxes self-employed business owners and freelancers must pay in Canada. Plan to set aside 25%-30% of your income to pay them.