Every tax year, employers in Canada who have paid out remunerations to employees throughout the year are required to fill out and issue T4 slips to their employees.
For the 2021 tax year, the deadline for filing your T4 information return to the CRA and issuing T4 slips to employees is Feb 28, 2022.
This guide will cover the important items to ensure a smooth T4 reporting and filing process this year.
Prepare for T4 Reporting
Humi Payroll simplifies the process by preparing the T4 slips for you based on your payroll records from the tax year. However, it is strongly recommended that employers follow steps 1 through 3 linked below before generating T4’s.
Links to previous steps
Doing a thorough review of the year’s payroll information before issuing T4 slips will help reduce time-consuming T4 Amendments and reduce the risk of penalties for inaccurate reporting or for late filing.
Types of income to report on T4 slips
Most amounts paid to an individual by an employer are referred to as "remuneration."
T4 slips cover these types of remunerations:
- Salary, wages (including pay in lieu of termination notice), tips or gratuities, bonuses, vacation pay, employment commissions, gross and insurable earnings of self-employed fishers, and all other remuneration (see Box 14 – Employment income, for a detailed list) you paid to employees during the year
- Taxable benefits or allowances
- Retiring allowances
- Deductions you withheld during the year
- Pension adjustment (PA) amounts for employees who accrued a benefit for the year under your registered pension plan (RPP) or deferred profit-sharing plan (DPSP)
Generally, compensations like "salary and wages," as well as additional income types like "bonus, tips and vacation pay" processed through Humi Payroll are automatically assigned to the corresponding boxes on the T4 slip.
Benefits are reported in all required boxes on T4 slips
In some cases, taxable allowances and benefits may have additional T4 reporting requirements.
For example, in addition to reporting a housing allowance in Box 14 as employment income, it also needs to be reported again in the T4 slip's "Other Information" section with code 30.
It's important to ensure all benefits are reported correctly in the T4 slips by specifying the T4 code that the benefit should be reported in.
For more information about benefits reporting, see Step 2: Review Records.
Verify YTD records are accurate
Employers who started using Humi Payroll mid-year were required to upload Year-To-Date (YTD) payroll records.
When T4 slips are prepared, the YTD amounts are added to the amounts processed through Humi Payroll to provide a full year's context on payroll.
It's important to review and update the records if necessary to ensure they accurately represent payrolls processed through previous payroll providers.
Learn more about updating payroll YTD records.
Prepare and Review tax package
After you've confirmed your employee data and payroll data are accurate and up-to-date, it's time to generate the tax package through Humi Payroll.
Humi Payroll provides three types of tax information for review and filing needs:
T4 slips are summaries of employment earnings and deductions for the year for individual employees. Humi will produce T4s for active and terminated employees, as long as the employees have been paid through Humi Payroll in the past.
T4 Summary contains the totals of the amounts reported on the related T4 slips. A basic breakdown can be viewed in Humi alongside the more detailed version available in your download package.
T619, is an electronic transmittal record of T4 and T4 Summary. This is to be downloaded and filed with CRA. In addition, the T619 can also be downloaded and viewed as a text file.
Some boxes in the T4 Summary have been intentionally left blank to ensure the most accurate and relevant information is available to you.
Last chance to verify statutory deduction amounts
Typically after the T4 slips and T4 Summaries are filed, the CRA reviews the records submitted to make sure the pensionable and insurable earnings reported would correspond to the deductions that are withheld and remitted.
Suppose there's a difference between the CPP contributions or EI premiums required and those you reported. In that case, the CRA will provide a Pensionable and Insurable Earnings Review (PIER) listing showing the names of the affected employees and any balance due.
To help employers catch potential discrepancies early and to avoid late remittances, Humi Payroll performs a preliminary PIER analysis for each employee's T4 slip, which is available when you preview the T4 document in-app.
PIER results provided in the T4 feature are provided for reference based on Humi's calculations and will not prevent you from issuing any T4 slips as is. The final verdict on any under- or over- remitted amounts should be based on the PIER listing provided by the CRA.
However, it's recommended that payroll admins take a conservative approach to reviewing Humi Payroll's PIER analysis for each employee, and if applicable remit the difference through the CRA website as soon as possible. Learn more about correcting remittance errors.
After remitting the difference, be sure to update the T4 slips in Humi Payroll to reflect the latest deduction amounts, before issuing the documents to employees.
Issue T4s to employees
Employers are required to issue T4 slips to all employees by the last date of February. Humi Payroll facilitates this process by providing an option for employers to send all T4s directly to employees.
On the tax package page in-app, click "Email All T4s" to send a secure PDF T4 file to each employee's email address based on their contact information on file with Humi.
In addition, employers may download the finalized T4 slips as well as the T619 file to be kept as backup copies.
Submit T619 to CRA
After you've finalized your T4s, you'll need to download and upload the T619 file onto the CRA's online portal, Internet File Transfer Option.
Note: You can also file the T619 by logging into the "My Business Account" and filing it from there.
The link to do so is also available in the banner just above the list of employee T4s in-app: Payroll > Records > Tax Forms > click into the "Employer Package"
Make sure you have the checklist items specified on the CRA website, then scroll down to the bottom of the page and click “I Agree”.
Enter your CRA Account Number and Web Access Code, and go through the process as instructed on the page.
While entering the CRA account number, use your 9-digit number followed by your CRA program code and CRA reference number (most often 0001). For example, 123456789RP0001
If you don’t have a Web access code, visit the link “Need a Web Access Code?” in the CRA’s online checklist.
Finally, upload the T619 XML file and click “Submit”.
Voila, congratulations on filing your T4s successfully. Now is the time to pat yourself on the back for a job well done!
If you have to make any further changes to T4s that are already issued, learn more about Amending T4s.