T4 slips for employees and T4A slips for contractors and directors are due to recipients and to the CRA by the last day of February each year. The filing window is short — roughly four weeks from the fiscal year-end — but the preparation window is the full two months of November and December. Small businesses that miss the February deadline do so because they tried to do the reconciliation work in February, not because the deadline was genuinely short.
The deadline in plain language
Every employer who paid an employee more than $500 in the calendar year must issue a T4. Every payer who made contractor, director, pension, or specific other payments over $500 must issue a T4A. Both slips are due by February 28 in the year after the payment (February 29 in leap years). The slips go to both the recipient and the CRA, filed electronically through CRA Web Forms or directly from payroll software.
Late filing penalties start at $100 per slip and scale up quickly. A business with ten employees that files T4s two months late can be looking at a $1,000 to $2,500 penalty for an entirely preventable administrative slip.
Who needs a T4 versus a T4A
This is where the classification error happens most often.
T4 is for employees. Someone on your payroll, with source deductions withheld (income tax, CPP, EI), receiving regular employment earnings. Every employee paid more than $500 in the calendar year gets a T4, regardless of how brief their employment was.
T4A is for everyone else. Specifically:
- Self-employed contractors paid for services (subcontractors, freelancers, consultants) — if you paid more than $500 in fees in the calendar year
- Directors paid fees
- Recipients of pensions, retiring allowances, or annuities
- Recipients of research grants or scholarships (specific codes)
- Commission-based agents not on payroll
The CRA's long-standing position is that any service payment over $500 to a non-employee warrants a T4A. In practice, enforcement has been inconsistent, and many small businesses do not issue T4As to occasional subcontractors. The risk is on the employer if the CRA audits and decides the slips should have been issued.
If you pay regular subcontractors — trades, designers, bookkeepers, consultants — the safer answer is to issue T4As and settle the classification question with your CPA before the slips go out.
What data needs to be right before year-end
Six inputs feed the T4 and T4A preparation process.
Employee year-to-date earnings. Box 14 on the T4. This is the gross earnings across all pay periods in the calendar year. It must reconcile to the sum of the pay stubs.
Income tax withheld. Box 22 on the T4.
CPP contributions. Box 16 on the T4. The employee's CPP deducted, which must equal the employer's CPP contributions (the employer matches on a 1:1 basis up to the annual maximum).
EI premiums. Box 18 on the T4. The employee's portion; the employer contributes 1.4x on its own return.
Taxable benefits. Boxes 14 and 40 and sometimes others. Employer-provided health benefits above the CRA's allowable limits, personal-use portions of employer vehicles, employer-paid life insurance, and certain other benefits are taxable and must be added to Box 14.
Pensionable and insurable earnings. Boxes 24 and 26. Usually equal to Box 14, but not always — the difference matters when the employee earns non-pensionable income or when partial-year earnings affect the CPP/EI caps.
T4A slips are simpler: recipient name, address, SIN or business number, total fees paid (Box 048 for self-employed commissions, or Box 020 for self-employed fees depending on the payment type).
The November-December reconciliation
Payroll software (Wagepoint, Payworks, ADP, Deluxe, QuickBooks Payroll) handles the slip generation automatically — but only if the underlying data is right. The reconciliation work happens before the software runs the slips.
By mid-December:
- Confirm every employee's year-to-date earnings in the payroll software match the sum of their pay stubs
- Confirm every contractor paid over $500 is flagged for a T4A
- Verify taxable benefits (health benefits above CRA limits, personal-use vehicle portions, taxable parking) are added to gross earnings
- Reconcile the CPP and EI year-to-date totals to what was remitted through source deductions
- Pull a draft T4 summary from the payroll software and review for anomalies
Through December:
- Run the final payroll of the year with the correct cutoff date (the cheque date, not the pay period end date, is what determines which calendar year the earnings belong to)
- Issue any year-end bonuses with proper withholdings
- Record any ROEs (Records of Employment) owed for terminations during the year
The January finalisation
The first two weeks of January finalise the numbers.
Week 1 — Final numbers. Pull the final payroll register from the software and reconcile it against the general ledger payroll expense accounts. Discrepancies get resolved now, not after the slips are issued.
Week 2 — T4 and T4A generation. The payroll software generates T4s and T4As from the reconciled data. The slips are reviewed by whoever handles payroll — bookkeeper or controller — before distribution.
Week 3 — Distribution and filing. T4s are distributed to employees (paper or electronic consent both acceptable; electronic is increasingly standard). T4As go to contractors. The T4 Summary and T4A Summary are filed to the CRA through CRA Web Forms or directly from the payroll software.
Week 4 onward — Amendment window. Corrections can be filed through the CRA, but amendments are a real administrative burden. The goal is to file right the first time.
Common errors that trigger amendments
Four recurring errors worth flagging.
Missing taxable benefits. Employer-paid life insurance, personal-use portions of an employer vehicle, gift cards above the CRA's $500 cap, club memberships — these are taxable benefits that should be added to Box 14. Missing them understates the employee's taxable income and triggers a CRA letter eventually.
Wrong CPP basic exemption. The CPP basic exemption ($3,500) is annual, not per pay period. Payroll software handles this correctly, but businesses that run payroll manually or partially outside software frequently over-withhold CPP and under-report pensionable earnings.
Contractors paid over $500 not flagged as T4A recipients. The payment shows up as a standard vendor payment rather than a T4A-eligible fee, and the slip is never generated.
Timing errors on the final payroll. A December 30 pay period end with a January 2 cheque date belongs to the new calendar year, not the old one. Getting this wrong means the year-end totals do not match the pay stubs the employee received.
Filing mechanics
Two main routes for submitting to the CRA.
CRA Web Forms. A free portal in CRA My Business Account for filing up to 100 slips per filing. Suitable for most small businesses.
Direct filing from payroll software. Wagepoint, Payworks, ADP, Deluxe, and QuickBooks Payroll all support electronic filing directly to the CRA. This is the standard approach for businesses using payroll software — no separate submission needed, the slips are filed and the summary generated in one step.
Paper filing through CRA forms is still permitted but discouraged. The CRA's XML-based electronic filing is now the default for any business with more than a few slips.
Where T4 preparation sits in the year-end close
T4 preparation is a specific workstream inside the broader year-end close. It sits alongside reconciliation, GST and PST finalisation, capital asset entries, and the year-end handoff to the CPA. For the full reference on the ten-step Canadian year-end process, see the year-end bookkeeping checklist for Canada.
When to get help
For businesses with fewer than five employees and no complex benefits, T4 preparation is a weekend of focused work using the payroll software's built-in tools. For businesses with ten or more employees, contractor payments that need T4A classification, or taxable benefits to calculate, the reconciliation is enough work that getting help pays for itself.
Payroll management handles the entire workflow — monthly source deductions, T4 and T4A preparation, and the January filing — as part of the monthly close. Year-end preparation wraps the T4 work into the broader CPA handover package so nothing falls between the payroll and the corporate tax return.
Where to read more
- CRA's T4 slip guide for employers for the official filing mechanics.
- CRA's T4A slip guide for payers for contractor and director payments.
The work is routine; the deadline is fixed. Businesses that treat the January filing as a January problem are the ones who file late. Treat it as a November-December project, and the February deadline is calm.