T4 Slip Preparation: Step-by-Step Process
Completing T4 slips doesn’t have to be complicated. This guide walks you through each box, deadlines, and how to file with CRA.
Why T4s Matter
If you’ve got employees on your payroll, you’ll need to issue T4 slips. They’re not optional — the Canada Revenue Agency requires them by the end of February each year. But here’s the thing: they’re not as intimidating as they seem once you understand what goes in each box.
We’ll walk through the entire process. From gathering your payroll records to submitting your file to CRA, you’ll know exactly what to do. And we’ve included the common mistakes people make so you can avoid them.
The T4 Preparation Timeline
Knowing your deadlines keeps everything on track. Here’s what you need to know about timing.
Gather Records by January 31
Pull together all your payroll records from the previous calendar year. You’ll need gross pay, deductions, taxes withheld, and any special items like tips or benefits. Make sure your payroll software has everything recorded correctly.
Complete T4 Slips by February 28
You’ve got until the end of February to give copies to your employees. Fill in all the boxes accurately. Box 14 is income tax withheld, Box 16 is employment income — these are the key ones that employees will use for their tax returns.
File with CRA by March 31
Submit your T4 information return to the CRA by March 31st. You can file online through CRA’s system or use approved software. Missing this deadline can result in penalties, so mark your calendar.
Understanding the Key Boxes
The T4 has many boxes, but you’ll focus on a few critical ones.
Box 14 holds the income tax you withheld from the employee’s paycheques throughout the year. This is what they’ll use to see if they’re getting a refund or owe more tax. Get this wrong and your employee’s entire tax situation gets complicated.
Box 16 is the total employment income for the year. Add up all the gross pay before any deductions. If an employee earned $45,000 gross, that number goes in Box 16. Simple, but it’s the foundation everything else builds on.
Boxes 20 and 21 cover CPP contributions — employee and employer amounts. These come straight from your payroll calculations. Box 22 is EI premiums withheld. Again, your payroll software should calculate these, but you need to verify they’re correct.
Box 24 is for taxable benefits. If you provide a company car, paid health insurance, or other benefits, they go here. Not all benefits are taxable, so know the rules before you fill this in.
Mistakes to Avoid
These happen more often than you’d think. Watch out for them.
Mismatched Social Insurance Numbers
Double-check every SIN. A single digit wrong and the employee’s T4 won’t match their CRA file. This causes delays when they file their tax return.
Forgetting Unpaid Leave or Termination Pay
If an employee took unpaid leave or you paid termination pay in December, that counts as income for the year. Include it in Box 16. Don’t leave it off just because it’s not regular payroll.
Wrong Tax Withholding Amount
Box 14 needs the exact total tax withheld all year. Many people underestimate or miss pay periods. Run a full year reconciliation before you finalize anything.
Missing CPP/EI Contributions
CPP contributions start at a certain earnings threshold ($3,500 in most years). If you withheld contributions for low-earning employees, you’ve made an error. Know the limits.
Late Filing
Missing the March 31st deadline costs money — actual penalties from CRA. There’s no grace period. File early if you can.
Incomplete Employee Copies
You need to give employees their copy by February 28. Make sure you’re providing copies on proper T4 forms, not just printouts. They’ll need these for their tax returns.
How to File with CRA
You’ve got a few options for getting your T4 information to CRA. The easiest is using CRA’s Web application if you’ve got a small number of employees — maybe 10 or fewer. You’ll enter information directly online and submit.
For larger payrolls, you’ll probably use certified payroll software. It generates the CRA-approved file format that you upload to CRA’s system. Make sure your software is certified by CRA — not all accounting packages are.
You’ll need your CRA business account login to file. If you don’t have online access yet, you can set it up at CRA’s My Business Account portal. The whole process takes maybe 30 minutes once you’ve got all your numbers ready.
Your T4 Preparation Checklist
You’ve Got This
T4 preparation isn’t rocket science. It’s really just about accuracy and knowing your deadlines. You’ll gather your payroll records, fill in the boxes with the right numbers, and file by March 31st. Most mistakes happen when people rush or skip the verification step, so take your time and double-check everything.
If you’re using payroll software, it’ll handle most of the calculations for you. Your job is making sure the input data is correct and the outputs make sense. A quick sanity check on the numbers before you file goes a long way.
Want to dive deeper into payroll? Check out our guides on CPP calculations and EI premiums to understand what’s flowing into those T4 boxes.
Learn About CPP ContributionsImportant Disclaimer
This guide provides educational information about T4 slip preparation and payroll processes in Canada. Tax and payroll regulations change frequently and vary by province. While we’ve made every effort to ensure accuracy, this content isn’t a substitute for professional advice. We recommend consulting with a certified accountant, payroll specialist, or the Canada Revenue Agency directly for your specific situation. The examples and timelines mentioned are general guidelines — always verify current requirements with CRA or your provincial tax authority before filing.
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