T4 Deadline

If you had employees in 2025, you have an important deadline coming up fast: February 28, 2026. That's when all T4 slips must be distributed to employees and filed with CRA.

Missing this deadline can result in penalties, unhappy employees who can't file their taxes on time, and potential CRA scrutiny of your payroll practices. Let's make sure you get it right.

What is a T4 and Why Does It Matter?

A T4 (Statement of Remuneration Paid) is the slip that reports employment income and deductions for the calendar year. Every employee needs their T4 to file their personal income tax return.

The T4 shows:

• Total employment income paid in 2025

• Canada Pension Plan (CPP) contributions deducted

• Employment Insurance (EI) premiums deducted

• Income tax withheld

• Taxable benefits and allowances

• RRSP contributions (if you have a group plan)

• Charitable donations (if done through payroll)

• Union dues

• Other deductions and benefits

Your employees can't accurately file their taxes without this information, and CRA uses T4s to verify that you've been remitting payroll deductions correctly throughout the year.

The February 28, 2026 Deadline: Two Requirements

You actually have two separate obligations by February 28th:

1. Distribute T4 slips to employees Every person who worked for you in 2025 must receive their T4 slip by February 28, 2026. This includes:

• Current employees

• Former employees who left during 2025

• Seasonal or temporary workers

• Part-time employees

• Anyone you paid employment income to, even if they only worked one day

How to distribute: You can give employees their T4 in person, mail it to their last known address, or provide it electronically if they've consented to electronic delivery.

2. File T4 Summary with CRA You must also file a T4 Summary (which reports total amounts for all employees combined) along with copies of all individual T4 slips to CRA by February 28, 2026.

Most businesses file electronically through CRA's My Business Account or using payroll software. Paper filing is still allowed for employers with fewer than 50 T4 slips, but electronic filing is faster and you get confirmation immediately.

Who Needs a T4?

You must issue a T4 to anyone you paid employment income to in 2025. This includes:

Definitely need T4s:

• Full-time employees

• Part-time employees

• Casual or seasonal workers

• Commission-based sales staff

• Officers of your corporation who received salary

• Family members you employed (yes, even your teenager who worked summers)

• Students on co-op placements

• Former employees (even if they quit or were terminated mid-year)

Common question: What about contractors?

If you paid someone as a contractor or self-employed individual, they generally don't get a T4—they should be invoicing you and reporting their income on their own tax return.

However, CRA has strict rules about who is an employee vs. a contractor. Just because you call someone a contractor doesn't make them one. If CRA determines they should have been classified as an employee, you could be on the hook for unpaid CPP, EI, and penalties.

Key factors CRA considers:

• Who controls how, when, and where the work is done?

• Who provides the tools and equipment?

• Can they subcontract the work or hire helpers?

• Do they have opportunity for profit or risk of loss?

• Do they work for other clients?

When in doubt, it's safer to classify someone as an employee. I've seen businesses hit with massive reassessments when CRA reclassifies contractors as employees retroactively.

What Information Goes on the T4?

Each T4 slip has specific boxes that need to be filled out accurately:

Box 14: Employment income This is the total gross pay before any deductions. It includes:

• Salary and wages

• Bonuses and commissions

• Taxable allowances

• Taxable benefits (like personal use of company vehicle)

• Vacation pay

• Retroactive pay increases

Box 16: Employee's CPP contributions Total CPP deducted from the employee's pay in 2025. For 2025, the employee rate is 5.95% on pensionable earnings between $3,500 and $68,500.

Box 18: Employee's EI premiums Total EI deducted from employee's pay. For 2025, the employee rate is 1.66% on insurable earnings up to $63,200 (maximum premium $1,049.12).

Box 22: Income tax deducted Total federal and provincial income tax withheld from the employee's pay.

Box 24: EI insurable earnings Usually the same as Box 14, but capped at the maximum insurable earnings ($63,200 for 2025).

Box 26: CPP pensionable earnings Usually the same as Box 14, but capped at the maximum pensionable earnings ($68,500 for 2025).

Box 40: Other taxable allowances and benefits This is where you report taxable benefits like:

• Personal use of company vehicle

• Parking provided by employer

• Gifts and awards over the allowable limits

• Low-interest or interest-free loans

• Board and lodging

• Group term life insurance premiums (over $25,000 coverage)

Other boxes: There are many other boxes for specific situations like RRSP contributions, union dues, charitable donations, northern residence deductions, and more. Make sure you're using the correct boxes for each type of payment or deduction.

Common T4 Mistakes to Avoid

1. Incorrect or missing Social Insurance Numbers (SIN)

Every T4 must include the employee's SIN. If an employee hasn't provided their SIN, you need to get it before you can file. Employers are legally required to collect SINs within three days of an employee starting work.

Without a valid SIN, you can't file the T4 electronically, and the employee will have problems with their tax return.

2. Wrong amounts in CPP and EI boxes

These need to match your payroll remittances exactly. If you remitted $2,500 in employee CPP contributions throughout the year, that's what Box 16 should show. Discrepancies trigger CRA reviews.

3. Forgetting to include taxable benefits

Many employers forget to report taxable benefits like:

• Personal use of company vehicle (this needs to be calculated based on CRA's rules)

• Christmas gifts over $500 annually

• Employee discounts beyond the acceptable limits

• Paying an employee's personal expenses

CRA audits often focus on taxable benefits because they're commonly underreported.

4. Not issuing T4s to former employees

Just because someone quit in March doesn't mean they don't need a T4. If they earned any employment income from you in 2025, they get a T4—period.

5. Mixing up employee and contractor payments

If you paid contractors via T4A or they invoiced you directly, don't put them on a T4. And vice versa—employees must get T4s, not T4As.

6. Filing late or not at all

Some business owners think "I only have one employee (myself)" means they don't need to file. Wrong. If you paid yourself salary from your corporation, you need a T4. If you skip it, CRA will eventually catch up with you.

Penalties for Late or Incorrect T4s

CRA takes T4 compliance seriously. Here's what happens if you miss the deadline or file incorrectly:

Late filing penalties:

• First occurrence: $100

• Second occurrence: $200

• Third+ occurrence: $300

Plus an additional penalty of $10 per day (minimum $100, maximum $1,000) if you're late filing.

These might seem small, but they add up if you have multiple employees. More importantly, late T4s mean your employees can't file their taxes on time, which creates ill will and potential problems for them.

Penalties for incorrect information: If you knowingly or under circumstances of gross negligence make false statements or omissions on T4s, penalties can be the greater of $100 or 50% of the understated tax.

Repeated failures: If you consistently file late or incorrectly, CRA may conduct a full payroll audit, which examines everything: proper employee classification, accurate withholding, timely remittances, and correct T4 reporting.

How to Prepare Your T4s

Step 1: Reconcile your payroll for 2025

Before you can create T4s, make sure your payroll records are accurate and complete:

• Total all wages, salaries, bonuses, and commissions paid in 2025

• Verify total CPP contributions (employee and employer portions)

• Verify total EI premiums (employee and employer portions)

• Confirm total income tax withheld

• Calculate any taxable benefits

• Ensure all pay periods are accounted for (don't forget that odd December 30th pay if you pay weekly)

Step 2: Verify your remittances match your records

Your total employee deductions (CPP, EI, and income tax) remitted to CRA throughout 2025 should match what your payroll records show. If they don't match, you need to figure out why before filing T4s.

Common causes of discrepancies:

• Mathematical errors in calculating deductions

• Missed remittances

• Remitting the wrong amounts

• Not accounting for employer portions separately

Step 3: Generate T4 slips

Most payroll software (QuickBooks, Sage, Wagepoint, etc.) will generate T4s automatically based on your payroll data. Review each one carefully for accuracy.

If you're doing payroll manually or using a basic system, you can use CRA's fillable T4 forms, but this gets tedious with multiple employees.

Step 4: Complete the T4 Summary

The T4 Summary (form T4SUM) reports the totals for all employees combined. It includes:

• Total employment income (sum of all Box 14s)

• Total CPP contributions—employee and employer portions

• Total EI premiums—employee and employer portions

• Total income tax deducted

• Number of employees

This summary must balance with your year-end payroll records and your remittances to CRA.

Step 5: File electronically (recommended)

Electronic filing through CRA My Business Account or Web Forms is the fastest and most reliable method. You get immediate confirmation that your filing was received and accepted.

You can also use certified payroll software that files directly with CRA, or hire a payroll service provider to handle this for you.

Step 6: Distribute slips to employees

Once filed, give each employee their T4 slip. Many employers include it with the last January paycheck or mail it to employees' homes.

Pro tip: Even though the deadline is February 28th, aim to have T4s done by mid-February. This gives you a buffer in case you discover errors, and your employees will appreciate getting them early so they can file their taxes and receive their refunds sooner.

What About T4A?

T4As are for reporting other types of income, most commonly payments to contractors and self-employed individuals. If you paid contractors $500 or more in 2025, you may need to issue T4As.

Key differences:

• T4: Employment income with source deductions (CPP, EI, tax)

• T4A: Payments to self-employed individuals, no source deductions

The T4A deadline is also February 28, 2026, and the same penalties apply.

Important: You don't need to issue T4As to incorporated contractors (those who invoice you from their corporation). You only issue T4As to unincorporated contractors—sole proprietors and partnerships.

Quebec Employers: Different Rules

If you have employees working in Quebec, you have additional requirements. Quebec has its own tax system (Revenu Québec), so you need to:

• File T4s and T4 Summary with CRA (federal)

• File Relevé 1 slips and RL-1 Summary with Revenu Québec (provincial)

The deadline for Relevé 1 is the last day of February, same as T4s. Quebec also has its own payroll requirements, including different tax tables and additional source deductions like QPP (Quebec Pension Plan) and QPIP (Quebec Parental Insurance Plan).

Year-Round Payroll Best Practices

Don't wait until T4 season to think about payroll compliance. Here are some practices that make year-end much easier:

1. Keep accurate, up-to-date records Record every pay period promptly with all deductions calculated correctly. Don't let payroll entries pile up—it's much harder to reconstruct payroll three months later.

2. Remit on time, every time Payroll remittances are due by the 15th of the month following the pay period. Set reminders and make this non-negotiable. Late remittances attract penalties and interest.

3. Reconcile monthly Compare your payroll records to your bank statements and CRA remittance confirmations every month. Catch discrepancies early.

4. Document everything Keep records of:

• Timesheets or time tracking

• Pay rate authorizations

• Bonus approvals

• Taxable benefit calculations

• Copies of all remittances

CRA can audit payroll going back several years. Good documentation protects you.

5. Review employee classifications annually Business relationships change. A contractor who started out working for multiple clients might now work exclusively for you, which could change their classification to employee. Review these relationships at least once a year.

6. Stay current with rate changes CPP and EI rates change every year. Make sure your payroll calculations reflect the current year's rates. Using last year's rates will cause problems.

Getting Help with T4s

If you're feeling overwhelmed by T4 preparation—or if payroll compliance isn't your strength—you have options:

Payroll service providers: Companies like ADP, Ceridian, and Wagepoint handle all payroll calculations, remittances, and T4 preparation for you. This can be cost-effective if you have multiple employees or complex payroll situations.

Accounting software: QuickBooks Online, Sage, and Xero all have payroll modules that calculate deductions and generate T4s. The software stays updated with current tax rates and regulations.

Bookkeepers and accountants: Many bookkeepers (like me) offer payroll services as part of their packages. We ensure calculations are correct, remittances are made on time, and T4s are filed accurately.

The cost of getting professional help is almost always less than the cost of penalties, interest, and the time you'll spend fixing mistakes.

Final Checklist for February 28th

Here's your quick checklist to make sure you meet the T4 deadline:

• Reconcile all 2025 payroll records

• Verify all remittances were made and match your records

• Calculate any taxable benefits

• Generate T4 slips for all employees (current and former)

• Complete the T4 Summary

• Review all T4s for accuracy (names, SINs, amounts)

• File T4 Summary and slips with CRA electronically

• Distribute T4 slips to all employees

• Keep copies for your records (you need these for 6 years)

• If you have Quebec employees, file Relevé 1s with Revenu Québec

Bottom Line

T4s aren't optional, and the deadline isn't flexible. Getting them done correctly and on time protects you from penalties, keeps your employees happy, and ensures CRA has no reason to audit your payroll practices.

If you're behind on your payroll recordkeeping, have employees you're not sure how to classify, or just want peace of mind that your T4s will be done right, now is the time to get help.

Need assistance with T4 preparation or payroll compliance?

I can help you:

• Reconcile your 2025 payroll records

• Prepare and file T4s and T4 Summary accurately and on time

• Review employee vs. contractor classifications

• Set up proper payroll systems for 2026

• Handle ongoing payroll processing so you never face this stress again

📧 Email: info@trustedbr.ca
📞 Phone: 1-800-655-4544
🌐 Website: www.trustedbr.ca
📱 Social: @trustedbr

Don't wait until February 27th. Let's get your T4s handled properly.