Tax time is quickly approaching: April 30th 2024 for most people, or June 15th for the self-employed. If you haven’t done so already, now is the time to gather all your income tax-related documents that you’ll need to file your taxes. Two important documents involved in this process are T4 and T4A slips.
These might sound almost identical, but they’re used for completely different reasons. It’s important to understand what these differences are as they relate to your income and how they’re involved in filing your income taxes.
Key Points On T4A vs T4
- T4 and T4A slips are both used to report your income, but each serves a different purpose and applies to different types of income.
- Most employed workers will receive a T4 slip, while self-employed or retired individuals will use a T4A.
- You should receive your T4 or T4A by the end of February of the following year.
T4A Vs T4: What’s The Difference?
Both T4A and T4 slips relate to income. However, the source of the income is where each document differs.
In general, a T4 slip shows the income an employee earns working for an employer, as well as any relevant deductions made. On the other hand, a T4A slip reports self-employed earnings or income from retirement account sources.
What Is A T4 Slip?
Formally known as a Statement of Remuneration Paid, a T4 slip is a document that contains important details in a particular calendar year, including the following:
- How much income you were paid from your employer(s)
- Tax deductions
- Contributions made to:
- Canada Pension Plan (CPP)
- Quebec Pension Plan (QPP)
- Employment Insurance (EI)
- Provincial Parental Insurance Plan (PPIP)
Employers must issue T4s if they pay their employees’ employment income, commissions, taxable benefits, and other forms of remuneration. These documents must also be issued if deductions were made for CPP/QPP, EI, or PPIP.
Types Of Income Included In A T4 Slip: What Does Each Box Represent?
The following is a list of some of the more common boxes found on a T4 slip, and what each one represents:
- Box 14: Employment income
- Boxes 16/17: Employee’s CPP/QPP contributions
- Box 18: Employee’s EI premiums
- Box 20: Registered Pension Plan (RPP) contributions
- Box 22: Income tax deducted
- Box 24: EI insurable earnings
- Box 26: CPP/QPP pensionable earnings
- Box 44: Union dues
- Box 46: Charitable donations
- Box 52: Pension adjustment
- Box 55: Employee’s PPIP premiums
- Box 56: PPIP insurable earnings
What Is A T4A Slip?
The T4A is a Statement of Pension, Retirement, Annuity and Other Income. Essentially, T4A slips are identical to T4 slips except for the source of the income listed. The T4A lists income received from anywhere other than an employer.
Income listed on T4A slips can include self-employment income, Old Age Security Pension, and anything else that isn’t employer income.
Types Of Income Included In A T4A Slip: What Does Each Box Represent?
The following is a list of some of the boxes found on a T4A slip, and what each one represents:
- Box 12: Social insurance number (SIN)
- Box 13: Recipient’s program account number
- Box 16: Pension or superannuation
- Box 18: Lump-sum payments
- Box 20: Self-employed commissions
- Box 22: Income tax deducted
- Box 24: Annuities
- Box 48: Fees for services
- Box 61: Payer’s program account number
Other Types of T4A Slips
Here is a list of the different types of T4A slips issued to people receiving income from other sources:
- T4A(P) – Statement of Canada Pension Plan Benefits
- T4A(OAS) – Statement of Old Age Security
- T4A-RCA Statement of Distributions from a Retirement Compensation Arrangement
- And the plain, no-frills or extra letters T4A – Statement of Pension, Retirement Annuity, and Other Income
Note: During COVID-19, T4A slips were issued to anyone who received money from the CRA in the form of COVID-19 benefits.
Which T4 Slip Will You Get?
T4 and T4A slips are needed when you file your income taxes because they identify the amounts you were paid throughout the year. The specific document you get will depend on the type and source of income.
Which T4 Slip Will You Get If You’re Self-Employed?
If you received self-employment income over the past year, you’ll get a T4A slip to file your income tax return.
Which T4 Slip Will You Get If You’re Retired?
You’ll receive a T4A slip for income received from various retirement sources, such as pension benefits, retirement income from an employer, and annuities.
Which T4 Slip Will You Get If You’re Employed?
If you are a salaried worker or are paid regular hourly wages from an employer, you’ll receive a T4 slip. A T4 slip includes detailed information about payments from an employer to an employee during a calendar year.
How To Get Your T4A vs. T4 Slip
Employed Individuals
If you’re employed, you’ll receive your T4 slip from your employer by no later than the end of February. Your employer will send it to you either by mail, in person, or online.
Things work a little differently if you’re self-employed, retired, or receive income from anything other than an employer.
Self-Employed Individuals
If you’re self-employed, you might not necessarily get a T4A from every client. Generally speaking, T4As are sent out by companies that consider you a consultant. If you do receive a T4A slip and boxes 20 or 48 include an amount, that means you collected income from commission-based or contract work.
Retired Individuals
If you’re retired and received retirement benefits from the Canadian government, such as Old Age Security (OAS) pension, you’ll receive a T4A slip from the Canada Revenue Agency (CRA). If you have not received your T4A slip, you can contact Service Canada or log in to your My Account on the CRA website.
How To Report A T4A?
Reporting a T4A is the same as reporting income on a T4 or income from any other type of tax slip. If you’re using the services of a tax consultant, they’ll take care of this reporting for you.
If you’re doing your taxes with DIY tax software, there may be a feature that allows you to automatically import all the information from your T4 slips. Or, you can manually input the information in each box.
T4A And Taxes
You should receive your T4A slips by no later than the end of February after the corresponding tax year. If you collect income from more than one source, then you’ll get several T4A slips. The CRA will also get copies.
The majority of income detailed on your T4A slips is taxed at your marginal rates.
With T4 slips, you’ll likely have had your income taxes deducted from your earnings. But with T4A slips, taxes are typically not deducted at the source. That means you’ll probably owe income taxes.
It’s your responsibility to crunch the numbers and estimate how much you’ll owe in income taxes based on what you earned so you have enough to cover what you owe when you file your taxes. If you are self-employed, you may have been required to make installments throughout the year.
Final Thoughts On T4A vs T4
If you work as an employee for an employer, then you should expect to receive a T4 slip from your employer before the end of February. If you’re self-employed or retired, then you’ll use a T4A slip instead when filing your income taxes. Be sure to consult with a tax specialist if you’re unsure how to use these forms when doing your taxes.
