Last updated: February 25 2009

T4’s - Annual Reporting Requirements

The following forms and guides have just been released on the CRA website, ensure your payroll department is up-to-date and stays informed with the most current information available.
As the February 28th deadline for the issuance of annual T4's approaches, it is worthwhile to review the rules surrounding the production of the T4 slips.

The final result of any payroll system is the production of the T4 Supplementary slips, and T4 Summary, which is required by every employer on an annual basis. A T4 Supplementary slip is prepared for each employee, and indicates the earnings of the employee, as well as the amounts of those deductions that CRA takes an interest in ñ such as CPP, EI and income tax deductions. The T4 Summary simply totals the information in all of the T4 Supplementary slips for the employer, and reconciles the total deductions taken for the year to the total amount remitted to the CRA. Any difference becomes a balance owing by the employer, and will probably be subject to penalties and interest, as if payroll has been properly handled all year, there should not be a balance owing on the T4 Summary. A link to these forms is provided on the Knowledge Net for this chapter.

Regardless of the year end that the employer may have for financial statement purposes, the payroll has to be balanced and T4's have to be issued to employees, with copies provided to the CRA by February 28th of each year, for the previous calendar year.

What is required information for completing T4 slips and the T4 summary?

In order to complete the T4 slips and T4 summary for an employer, the bookkeeper will need to produce a summary for each employee of all amounts paid during the calendar year. The T4 is prepared on a cash basis, so it is not necessary to include pay periods ending during the year, only pay periods for which payment was made during the year. This summary should total the gross pay, all amounts deducted and the net pay for the year. Ensure that this summary cross balances by checking that total gross pay, less the total of all deductions is equal to total net pay. Also, ensure that the total amount remitted to the government agrees to the amount that should have been remitted based on total deductions.

Excerpted from Basic Bookkeeping for Business, one of the courses that comprise the DFA, Certified Bookkeeping Specialist designation program.
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