You paid people for work last year. Some were employees on payroll. Others were independent contractors who sent invoices. Now it's year-end, and you need to issue the right tax slips. That's where the question comes up: T4 vs. T4A.

Issuing the wrong slip can lead to amended filings, payroll adjustments, or penalties. It can also create issues with worker classification and your payroll reporting obligations.

This article explains what a T4 and T4A are, who receives each slip, and how to determine which form to issue. You'll also learn common filing mistakes to avoid and how tools like Intuit QuickBooks can help simplify year-end reporting.

• What is T4?
• What is T4A?
• How are T4 and T4A slips different?
• What income boxes appear on T4 and T4A slips?
• How to determine whether to issue a T4 or T4A slip
• Common T4 and T4A filing mistakes to avoid
• How QuickBooks simplifies year-end reporting
• Simplify your payroll reporting today
• Frequently asked questions

What is T4?

A T4 slip, officially called the Statement of Remuneration Paid, is issued by employers to report employment income paid through payroll during the calendar year.

It includes wages, salaries, bonuses, and taxable benefits. It also reports payroll deductions withheld at source, such as Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax deductions.

As an employer, you're responsible for calculating these deductions, withholding them from each paycheque, and managing payroll expenses. You must also remit the amounts to the Canada Revenue Agency (CRA) and report the totals accurately on the T4 slip.

Who receives a T4?

Anyone you pay as an employee through payroll must receive a T4 slip. That includes full-time, part-time, and seasonal staff.

It also includes employees who left during the year. If they were paid through payroll and meet the reporting threshold, they still require a T4 slip, even if they're no longer with your business.

When must employers issue T4 slips?

You must issue a T4 if:

• You paid an employee $500 or more during the calendar year, or
• You withheld CPP, EI, income tax, or Quebec Parental Insurance Plan (QPIP) deductions, even if total earnings were under $500.

T4 slips must be provided to employees and filed with the CRA. The T4 deadline is the last day of February following the calendar year being reported.

What is T4A?

A T4A slip, officially called the Statement of Pension, Retirement, Annuity and Other Income, is issued to report non-payroll income paid during the calendar year.

It is not used for regular payroll employment income. In most cases, deductions are not withheld at source.

Contractors and other recipients are generally responsible for calculating and remitting their own income tax and CPP contributions.

Who receives a T4A?

You may need to issue a T4A to individuals you pay outside of payroll. This commonly includes independent contractors who provide services to your business.

If you pay commissions to individuals who are not treated as employees, a T4A may also be required.

In other situations, you may issue a T4A to report pension payments, annuities, scholarships, research grants, or other qualifying amounts under CRA reporting rules.

When must employers issue T4A slips?

You must issue a T4A if:

• You paid $500 or more in qualifying income to the individual during the calendar year, or
• You deducted income tax from the payment

The payment must also fall within the Canada Revenue Agency (CRA) reporting requirements for T4A slips.

T4A slips must be provided to the recipient and filed with the CRA. The deadline is the last day of February following the calendar year being reported.

How are T4 and T4A slips different?

The key difference between T4 and T4A slips comes down to worker classification and how the income is paid and reported.

Here are some main differences between T4 and T4A:

Source of income:

• T4: Payroll employment income
• T4A: Non-payroll income (e.g., contractor payments, pensions, commissions)

Worker classification

• T4: Employee
• T4A: Independent contractor or other non-employee recipient

Payroll deductions

• T4: CPP, EI, and income tax are typically withheld at source
• T4A: Deductions are generally not withheld, except in certain situations

Issuer responsibility

• T4: The employer calculates, withholds, and remits deductions through payroll
• T4A: The employer reports qualifying payments, but does not typically manage ongoing payroll deductions

Tax responsibility

• T4: The employer withholds and remits the required amounts
• . T4A: he recipient is generally responsible for calculating and paying their own income tax and CPP

What income boxes appear on T4 and T4A slips?

Both T4 and T4A slips use numbered boxes to identify specific types of income and deductions. Understanding these box numbers helps you confirm that amounts are reported correctly before filing with the CRA.

Some boxes you'll find on each form include:

Not every box appears on every slip. The fields that apply depend on the type of payment you reported. Reviewing the relevant box numbers before filing can help reduce errors and avoid corrections later.

How to determine whether to issue a T4 or T4A slip

To determine whether to issue a T4 or T4A, review how the individual worked for your business. The form you issue should reflect the actual working relationship, not just how payments were made.

Use the framework below to guide your decision.

Step 1: Confirm employment relationship

Look at the level of control you have over the work. Do you set the hours, supervise tasks, and provide the tools or equipment? Is the individual integrated into your day-to-day operations? Is the individual part of your day-to-day operations?

If the person works under your direction as part of your business, that typically points toward an employment relationship. If they operate independently and control how and when the work is done, the arrangement may fall outside payroll. If they control how and when the work is done and operate independently, the arrangement may fall outside payroll.

Step 2: Review the payment structure

Consider how you pay the individual. Are they processed through your payroll system with regular deductions? Or do they submit invoices and receive payment without payroll withholdings?

Payroll-based payments usually align with employment reporting. Invoice-based payments often signal a contractor arrangement.

Step 3: Verify CRA guidance

When in doubt, review the CRA's criteria for employment status. The agency evaluates factors such as control, ownership of tools, chance of profit, and risk of loss. If uncertainty remains, consider requesting a ruling from the CRA to confirm the worker's status.

Common T4 and T4A filing mistakes to avoid

T4 and T4A slips may seem straightforward. But small filing mistakes can lead to penalties, reassessments, or CRA follow-up. Here are common filing mistakes employers should review before submitting their slips:

• Misclassifying workers: If you treat an employee as a contractor, or a contractor as an employee, you may issue the wrong slip type. This can affect how income and deductions are reported to the CRA, and may impact your business taxes filings.
• Missing deadlines: T4 and T4A slips must be filed and distributed by the last day of February. Filing late can trigger penalties.
• Incorrect CPP or EI reporting: Reporting the wrong CPP or EI amounts can create discrepancies in your payroll records. You may need to adjust prior remittances and issue amended slips to correct the amounts reported.
• Failing to file electronically when required: If you file more than five T4 or T4A slips of the same type, the CRA requires you to submit them electronically. Filing on paper in these cases may result in penalties.
• Submitting incorrect information: Errors in Social Insurance Numbers, payment totals, or deduction amounts can delay processing. You may need to issue corrected slips and resubmit them to the CRA.

How QuickBooks simplifies year-end reporting

Year-end reporting is easier when your payroll records stay accurate all year. QuickBooks Payroll keeps wages, deductions, and contractor payments up to date with every pay run, helping maintain organized records throughout the year.

Deductions such as CPP, EI, and income tax are calculated automatically using current CRA rates, supporting accurate T4 reporting. Contractor payments are tracked separately from employee payroll, making it easier to identify which payees may require a T4A.

When it's time to prepare your slips, your information is already structured for reporting. You can generate T4 and T4A forms directly from your payroll data and file electronically when required.

Simplify your payroll reporting today

Understanding T4 vs. T4A slips is essential for Canadian small business owners. But managing them doesn't have to be complicated.

With QuickBooks Payroll, you can automate payroll calculations, track contractor payments, and prepare year-end slips using organized records in one place.