When are T4 slips required?

Employment income is included on a T4 for the year in which it is received, not earned.  If a payment is made in January 2015 for wages earned in December 2014, this amount will be reported on the 2015 T4, not on the 2014 T4.  One exception to this is related to employee trusts, which will not affect most employees.  Income from an employee trust is reported on a T4 for the period in which the income was allocated to beneficiaries by the trustee, not for the period in which any payment was made to beneficiaries.

Employees must be given their T4 slips on or before the last day of February following the calendar year to which the slips apply.  If the last day of February falls on a Saturday or Sunday, the due date is not moved to a later date.  Employers can be penalized $25 per day for each failure to distribute the T4, with a minimum penalty of $100 and a maximum penalty of $2,500.

The employee should be provided 2 copies of the T4, preferably printed on one sheet (CRA Web Forms does this automatically).  This can be done by:

• mail to he employee’s last known address
• delivery in person
• electronic delivery (e.g. by email) if you have the employees consent in writing or electronic format

A T4 slip must be completed for each individual who received remuneration during the year if:

• CPP/QPP contributions, EI premiums, income tax, or Quebec PPIP premiums had to be deducted from the remuneration , or
• the remuneration was more than $500

An exception to the $500 limit is when employees are provided with taxable group term life insurance benefits.  In this case, T4s must always be prepared, even if the total remuneration paid in the calendar year is less than $500.  When former employees or retirees are provided with such benefits, a T4A slip must be completed.