Every February, payroll teams across Canada face a familiar pressure: T4 and T4A filing deadlines. You have a stack of slips to prepare, employees expecting their tax documents, and the CRA watching for errors that can trigger penalties. If you have ever rushed to fix a mismatched SIN or scrambled to submit an XML file that failed validation, you know the stakes. This guide walks you through the T4 and T4A filing process, from understanding who gets which slip to submitting everything in the correct CRA XML format. Whether you are a small business owner processing a handful of T4s or a CPA firm managing hundreds, the steps are the same, but the margin for error is thin.

Table of Contents

T4 vs T4A: Which Slip Do You Need?

One of the most common questions in T4 and T4A filing is when to use each slip. The T4, officially called the Statement of Remuneration Paid, is for employees. If you issue a T4, you are reporting employment income subject to CPP contributions and EI premiums. The T4A, Statement of Pension, Retirement, Annuity, and Other Income, covers everything else: payments to independent contractors, pensions, scholarships, and certain other amounts that are not from employment.

Key Differences

Aspect T4 T4A
Recipients Employees Contractors, pensioners, scholarship recipients
CPP/EI deductions Yes No (unless it is a pension)
CRA filing method Standard XML format T4A XML format (similar but separate program)
Common codes 14 for employment income, 52 for CPP/QPP 18 for pension income, 27 for commissions
Boxes used Box 14, Box 52, Box 24, etc. Box 048, Box 036, etc.

Who Receives Each? Real-World Example

Consider a marketing agency in Ontario with 12 staff and several freelancers. The employees receive T4s reflecting salary, CPP, and EI. The freelancers, who are independent contractors, should get T4As with amounts in Box 48 (commissions if applicable) or Box 20 (other income). Confusing these slips can trigger CRA assessments: giving a T4A to an employee misses CPP obligations, while giving a T4 to a contractor assumes an employer relationship that may not exist. When in doubt, check CRA's guide T4061 or consult a payroll specialist.

Who Must File T4 and T4A Slips

Nearly every business or organization that makes payments in Canada must file T4 or T4A slips. You must file a T4 for each employee to whom you paid salary, wages, bonuses, commissions, or other remuneration, even if you issued only one paycheque. For T4A, you must file for any person or business to whom you paid amounts such as:

  • Commissions paid to non-employee salespeople
  • Pension payments from a registered pension plan
  • Retiring allowances
  • Scholarships, bursaries, and research grants
  • Other income such as legal settlements or patronage dividends

Exceptions and Edge Cases

Even if you are a sole proprietor with no employees, you may need to file T4As if you pay independent contractors. Municipalities face a specific challenge: they often issue T4As to councillors who receive honoraria, which CRA considers other income. In the public sector, PSAB reporting adds complexity because you must track these payments for financial statements as well. If you are unsure whether a payment requires a slip, CRA provides a list in Guide RC4157 for T4A filers.

T4 and T4A Filing Deadlines

The deadline for T4 and T4A filing is the same every year: the last day of February following the calendar year. For example, slips for the 2025 calendar year are due by February 28, 2026. If that date falls on a weekend, the due date is the next business day. You must also provide copies of the slips to employees and recipients by that date.

Penalties for Late Filing

Late filing penalties are steep and scale with the number of slips. For 2025, the penalty is 3% of the amount not remitted, plus 1% for each full month late up to 12 months, depending on the number of returns. For more than 10 slips, the penalty calculation shifts: $25 per slip for the first 10 slips, then $50 per slip after that. The maximum penalty is often capped at $25,000. But if you have a history of late or incomplete filings, CRA can assess a gross negligence penalty of up to 50% of the unpaid amount.

What Happens If You Miss the Deadline?

If you realize after the deadline that you missed filing, file immediately. CRA may waive or reduce penalties if you show you exercised due diligence or if the late filing was due to circumstances beyond your control, like a serious illness or natural disaster. However, don't count on that. Better to set a calendar reminder for mid-January to start collecting data.

How to Prepare T4 and T4A Slips

Preparing slips accurately requires pulling data from your payroll records. For T4s, you need:

  • Employee name, address, and SIN
  • Total employment income (Box 14)
  • CPP contributions (Box 16) and EI premiums (Box 18)
  • Income tax deducted (Box 22)
  • Any other amounts like taxable benefits (Box 40 for vehicle benefit, Box 32 for board and lodging, etc.)

For T4As, the boxes vary. Common ones include:

  • Box 048: Commission income
  • Box 018: Pension income
  • Box 028: Other income
  • Box 036: Old Age Security (OAS) clawback amounts (rare)

Manual vs Automated Workflow

If you prepare slips manually, you might export pay data to Excel, calculate totals, then type into CRA's Web Forms. This process is error-prone. Imagine a bookkeeper who accidentally transposes a SIN or misapplies a benefit code. One wrong digit and the employee cannot file their taxes, leading to a frustrated phone call. With automated payroll software like Awditify, the system tracks all earnings, deductions, and benefits throughout the year. When February arrives, you generate the XML file with a few clicks. The difference is not just speed: accuracy improves because the same data feeds both pay stubs and year-end slips.

CRA XML Filing: What You Need to Know

CRA requires all businesses filing more than 50 slips to submit electronically using XML format. Even if you file fewer, electronic filing is encouraged and faster. The XML schema is defined by CRA and must match exactly: field names, data types, and order of elements. Common errors include incorrect SIN format, missing mandatory boxes, or using outdated schema versions.

How to Generate and Validate XML

Most payroll software generates the XML for you. But if you do it manually, you must follow the CRA XML schema available on their website. Validation tools like CRA's Web Forms or commercial validation tools can check for errors before submission. A typical mistake is failing to include zero-value boxes for mandatory fields. For example, if no EI is deducted, you still must report zero in Box 18.

Filing Through Awditify

With Awditify, the process is straightforward. The system compiles all T4 and T4A data from your payroll records, maps it to the correct boxes, and generates a validated XML file. You can review a summary or drill into individual slips before submitting. The platform also handles the CRA Internet File Transfer (IFT) submission directly, so you don't need to manage file upload separately. For CPA firms or municipalities handling multiple clients or entities, Awditify's batch submission saves hours. The Help Center walks through the steps in detail in the article on payroll tax forms (see How to Use Payroll Tax Forms).

Common Filing Mistakes and How to Avoid Them

Even experienced payroll teams make errors. Here are the most common ones and how to prevent them:

  • Wrong SIN: Always verify employee SINs, especially for new hires or temporary workers. Use CRA's SIN validation if possible.
  • Missing or inaccurate taxable benefits: Benefits like group term life insurance, vehicle allowances, and gifts must be included. Failing to report them can lead to reassessments.
  • Incorrect CPP or EI calculations: Especially for part-time employees or those with multiple employers, ensure you use the correct prorated amounts.
  • Wrong slip type: As mentioned, using T4 for a contractor or T4A for an employee.
  • Filing old XML schema: CRA updates the schema periodically. Check for updates each year.
  • Late filing: The most common and costly mistake. Set internal deadlines to have all data ready by mid-February.

How Awditify Helps

By centralizing payroll in one platform, you reduce manual data entry. Awditify's Canadian payroll module handles CPP, EI, and income tax automatically, calculates benefits, and generates correct slips. The audit trail ensures you can track changes. For firms managing many clients, the practice management features let you monitor who has filed and who hasn't. See Awditify for Accounting Firms for more on how it streamlines year-end.

Frequently Asked Questions

What is the difference between T4 and T4A?

A T4 is for employees who receive salary or wages subject to CPP and EI deductions. A T4A is for other types of income like commissions to independent contractors, pensions, or scholarships. The main difference is whether the payer deducted CPP and EI. If you did, use T4; if not, use T4A.

When are T4 and T4A due in 2026?

For the 2025 tax year, T4 and T4A slips are due by February 28, 2026. This is also the deadline for providing copies to recipients. If you miss this date, you may face penalties based on the number of slips and the amount of tax withheld.

Do I need to file T4A for a contractor?

Yes, if you paid a business or individual for services and you did not deduct CPP or EI, you generally issue a T4A. This includes payments to sole proprietors, partnerships, or incorporated contractors. Use Box 028 for other income or Box 048 for commissions. Ensure you have the contractor's CRA business number or SIN.

How do I file T4 and T4A with CRA electronically?

You can file using CRA's Web Forms if you have fewer than 50 slips, but for larger volumes you need XML submission. Most payroll software generates the XML. With Awditify, you can generate and submit XML directly through the platform, eliminating manual file handling. The system validates the file before sending, reducing rejection risks.

What is the best software for T4 T4A filing?

For Canadian businesses, the best choice is a solution built for Canadian payroll, like Awditify. It handles CPP, EI, and income tax calculations, generates CRA-compliant XML files, and offers features like automatic bank feeds and audit trails. By using Awditify, you reduce errors and save time during the busy filing season.

What to Do Next

T4 and T4A filing does not have to be a frantic scramble every February. The key is preparation: start early, verify your data, and use tools that reduce manual work. Whether you are a bookkeeper managing slips for a handful of clients or a municipality with dozens of employees and contractors, the same principles apply. If you have not already, consider moving your payroll to a dedicated Canadian platform that automates the entire year-end process. Awditify's payroll module handles all the complexities, from CPP/EI calculations to XML submission, so you can focus on your clients or operations. To see how it works, explore the payroll features or book a demo with our team.