The start of the year is often dedicated to budget planning and setting high-level financial goals. For employers, however, the first quarter is also when payroll reporting from the prior year is finalized.
Filing your T4 slip information returns accurately and on time is more than a compliance requirement; it is a governance practice that protects your business from unnecessary CRA scrutiny. Year-end payroll reporting closes the loop between what was paid, what was remitted, and what is reported to employees. If those three figures do not align, corrections become administrative and reputational issues. Resolving discrepancies early ensures your employees can file their personal returns without delay and prevents the administrative friction of amended filings later in the year.
For growing businesses, payroll complexity increases faster than many owners expect. Additional benefit programs, bonus structures, remote employees, and contractor relationships all introduce reporting variables. T4 season is when those variables surface.
Key CRA Payroll Deadlines to Know
In Canada, the standard deadline for filing T4 and T4A information returns is the last day of February. However, because February 28, 2026, falls on a Saturday, the Canada Revenue Agency (CRA) considers your returns to be on time if they are received or postmarked by Monday, March 2, 2026.
Beyond the federal T4 deadline, Ontario-based employers should keep these dates in mind:
- Source Deduction Remittances: Remittance due dates depend on your CRA remitter type:
- Regular remitters: Deductions are due by the 15th day of the month following the month in which employees were paid.
- Quarterly remitters: Deductions are due by the 15th day of the month following the end of each quarter (April 15, July 15, October 15, and January 15).
- Accelerated remitters: Deductions are due more frequently, either twice monthly or up to four times per month, based on your assigned threshold.
- If a due date falls on a weekend or public holiday, the CRA considers the remittance on time if received on the next business day.
- Ontario Employer Health Tax (EHT): For businesses required to file an annual return, the deadline is March 15, 2026. For 2020 through 2028, eligible private-sector employers (and associated groups) are exempt on the first $1 million of total Ontario remuneration. Eligible employers and associated groups must agree on how to share the exemption. However, this exemption is eliminated for any employer (including associated groups) with a payroll exceeding $5 million.
It is also important to distinguish between filing deadlines and remittance deadlines. Filing a T4 return does not correct late or insufficient remittances made throughout the year. The CRA evaluates payroll compliance based on both the accuracy of slips and the timeliness of source deductions. Businesses that reconcile only at year-end often discover discrepancies that originated several months earlier.
Reporting Reminders for the 2025/2026 Season
1. “Box 16A” for CPP2
Beginning with the 2024 tax year, the CRA introduced a second tier of Canada Pension Plan contributions (CPP2) for higher earners.
- Threshold: For the 2025 tax year, CPP2 applied to pensionable earnings between the first ceiling of $71,300 and the second ceiling of $81,200.
- What this means for employers: They must report base CPP in Box 16 and any second additional contributions in Box 16A. Employers should review year-end payroll summaries to confirm that total pensionable earnings correspond with both tiers of CPP contributions. A common error risk occurs when payroll software isn’t correctly mapped to separate these tiers or when payroll systems are updated mid-year, leading to Pensionable and Insurable Earnings Review (PIER) deficiencies. The responsibility for accurate reporting remains with the employer, even when third-party software is used.
2. Province of Employment for Remote Workers
The CRA’s administrative policy clarifies which provincial tax rates apply to remote staff.
- The Policy: If an employee is 100% remote under a formal agreement, their province of employment (POE) is the location of the employer’s establishment to which they are “reasonably attached”. This policy only applies for the POE for the purpose of determining source deductions.
- A Practical Example: An employee living in Nova Scotia working 100% remotely for an Ontario-based company, where their work is supervised and materials are provided, is likely attached to the Ontario establishment for payroll purposes.
For Ontario employers, province of employment classification can also affect Employer Health Tax calculations and workers’ compensation reporting. Misclassification does not always surface immediately, but discrepancies may become evident during audit reviews or interprovincial payroll reconciliations. Businesses operating across provinces should periodically review how remote work agreements are documented and how payroll systems apply provincial rates.
T4 vs T4A: Navigating Worker Classification
One of the most common points of confusion during tax season is determining which slip to issue for different types of workers. Getting this right is a critical part of your T4 preparation.
- T4 Slip (Statement of Remuneration Paid): This is used for traditional employees. You must issue a T4 if you paid an employee more than $500 or if you withheld any deductions (CPP, EI, or tax), regardless of the total amount.
- T4A Slip (Statement of Pension, Retirement, Annuity, and Other Income): This is generally used for independent contractors or freelancers. If you paid more than $500 for “fees or other amounts for services” (Box 048), a T4A is required. Amounts reported should not include any GST/HST or PST paid for these services.
The Risk of Misclassification: If the CRA determines a contractor is actually an employee, the employer is responsible for both the employer and employee portions of unremitted CPP and EI, plus penalties (often 10% of the amount) and daily compounded interest.
The distinction between employee and contractor is not determined by what the agreement is titled, but by the underlying working relationship. Factors such as control, ownership of tools, financial risk, and integration into the business are considered. When uncertainty exists, it is often prudent to review classification before issuing slips rather than correcting reporting after the fact.
Essential T4 Preparation Checklist
Year-end reconciliation should occur before the first slip is issued. Waiting until after filing increases the likelihood of amended returns and follow-up correspondence with the CRA.
- Reconcile Early: Compare your total payroll registers against your PD7A account statements. Common blind spots include manual adjustments, bonus runs, or year-end reversals that were never reflected in your remittances.
- Verify Taxable Benefits: Ensure non-cash benefits—such as personal use of a company vehicle or employer-paid health premiums—are accurately valued.
- Confirm Employee Data: Validate SINs and legal names. Incorrect data entry for an employee’s address or name is a frequent cause of T4 rejection.
- Electronic Filing Threshold: If you are filing more than 5 slips of the same type, you must file electronically. The penalty for paper-filing more than 5 slips ranges from $125 -$2,500 per type of return, depending on the number of slips incorrectly filed.
- Review Prior-Year Adjustments: If amended T4 slips were filed in the prior year, confirm that corrective journal entries were properly reflected in current-year payroll balances. Unresolved carry-forward discrepancies are a common source of repeated reporting errors.
Understanding Late Filing Penalties
Missing CRA payroll deadlines triggers a tiered penalty system based on the number of slips. For businesses filing between 1 and 50 slips, the penalty is $10/day (maximum $1,000 penalty); this scales to $75/day (maximum $7,500 penalty) for those with over 10,000 slips. Furthermore, late remittances of source deductions carry penalties from 3% to 10%, which can double for repeated failures.
In addition to monetary penalties, repeated non-compliance can increase the likelihood of payroll audits or more frequent remittance requirements. The CRA may reassign remittance frequency if a pattern of late payments is identified. For businesses managing cash flow tightly, this can create operational strain.
Effective payroll reporting reflects the quality of a company’s internal controls. As headcount increases, reporting errors affect more employees and require more corrective filings.
Addressing reconciliation, classification, and reporting issues before the March 2nd deadline will reduce administrative burden later in the year. It also allows leadership to focus on forward planning rather than resolving preventable compliance issues.
Need help reviewing your payroll or filing your 2025 returns? Request a consultation or call us directly at 416-646-0550 with an SBLR advisor today to ensure your business remains compliant and efficient.