T4 slip

Definition

A T4 slip is a Canadian tax form used by employers to report employment income, deductions, and other relevant information for their employees. 

What is a T4 slip?

The T4 slip is an essential document for individuals to accurately report their income and deductions when filing their personal income tax returns with the Canada Revenue Agency (CRA). The amounts reported on the T4 slip are used to calculate the employee’s total income, tax owing, and eligibility for various tax credits and benefits.

Employers are required by law to provide a T4 slip to each employee who received employment income during the tax year. The T4 slip must be provided to employees no later than the last day of February of the following year, whether they are still employed or have left the organization.

The T4 slip contains detailed information about an individual’s employment income and deductions for the tax year, this uncludes:

• Employee’s name, address, and social insurance number (SIN)
• Employer’s name, address, and business number (BN)
• Employment income earned during the tax year
• Deductions withheld from the employee’s pay 
• Taxable benefits provided to the employee

The T4 slip is a key document for both employees and the CRA. It ensures that individuals accurately report their income and deductions, allowing the CRA to assess and collect the appropriate amount of income tax owed by taxpayers. Failing to report income or deductions accurately can result in penalties or interest charges imposed by the CRA.

Example of a T4 Slip

T4 Slip

Employee information:

• Name: John Smith
• Social Insurance Number (SIN): 123-456-789

Employer information:

• Employer: XYZ Corporation
• Business Number (BN): 123456789

Income and deductions:

• Total employment income: $50,000
• Income tax deducted: $8,000
• Pension plan contributions: $2,500
• Employment insurance premiums: $1,200