A Canadian Small Business Employer’s Guide to T4s, T4As and RL-1s

An introduction to T4s, T4As and Relevés.

T4s, T4As and Relevés — what do they have in common, other than the fact that T4A and Relevé rhyme? Or, that you could easily refer to these things as "T4-ehs?" for all the confusion they cause. 

Don't worry, this article will help answer some of your most burning questions about T4s. 🔥

What are “said” documents? 

In their simplest forms, these documents are used by employers to report the wages and taxes included in the business' payroll and paid to each employee or contractor within a given calendar year. 

They're what you might call the “holy grail” of payroll documents. They're sent to your employees, your contractors — and the Canada Revenue Agency (CRA) or Revenue Québec (RQ) by the last business day of February each year.

• If you make a mistake, there's no hiding — both the government and your workers will know.
• Beyond trust issues, there's the pain of correcting mistakes and the risk of fines and penalties.  

Who gets a T4, T4A or RL-1?

• T4s are given to employees and the CRA. 
  (You need to create a T4 for each province and territory in which the employee earned income.) 
• T4As are given to contractors and the CRA.
  (Same as a T4, create one for each province and territory in which the contractor was paid.) 
• Relevé 1s (RL-1s) are what gets submitted to RQ for workers in that province. 
  (Note: Relevé 1s are an additional item that gets submitted to RQ for Québec-based employees and contractors. Employers must also issue federal T4s or T4As. ) ​

Payroll year-end? 

These forms all part of a process called payroll year-end. The end of the calendar year (and the last few months leading up to it) is when businesses close the books the previous calendar year and complete all their required compliance reports and documents — mainly T4s, T4As and Relevé slips, which are probably the most well-known parts of a payroll year-end.

Year-end is also when employers must reconcile their payroll amounts. This is when you add up what you've paid in wages and programs, like Employment Insurance/Québec Parental Insurance Plan (EI/QPIP) and Canada Pension Plan/Québec Pension Plan (CPP/QPP) and report them to the Canada Revenue Agency/Revenue Québec (CRA/RQ). This pretty much goes hand-in-hand with issuing T4s, T4As and RL-1s.

This article will help you learn the basics about T4s, T4As and RL-1s. It will also show you why automating calculations and remittances using payroll software, like Wagepoint, can help you make creating these forms a lot easier each year. 

A payroll year-end checklist? 

If you're old enough to remember when cereal boxes had prizes in the bottom and we were trusted not to consume this prize, it's sort of like that. We're including a payroll year-end checklist that will help break down the key tasks that go into creating T4s/T4As/RL-1s and ensure you're prepared this year and going forward.

What's a T4?

A T4 Statement of Remuneration Paid is an information slip that shows how much money an employee earned and how much was withheld and remitted to the government for tax purposes. It is also the form that your employees use to file their income taxes each year. 

Every year, T4 slips are required for the following instances:

• Employees you’ve paid more than $500.
• Any deductions for Canada Pension Plan (CPP/QPP) contributions, Employment Insurance (EI) premiums, Provincial Parental Insurance Plan (PPIP) premiums or income tax from an employee's pay.
• Every employee whether they're current, inactive or terminated.
• T4 slips for the previous calendar year are due to employees and the CRA by the last business day in February immediately following the calendar year. 

Note: You also need to create a T4 for every province and territory in which the employee earned income. 

What's included in a 2021 T4 issued by an employer?

Generally, most taxable income, allowances, benefits, deductions and pension plan contributions are included in the employer's T4 form.