QuickBooks and T4's
T4 forms are the yearly forms, which report employee earnings and deductions. Manually preparing these forms can be a daunting task. Luckily, QuickBooks assists you in preparing T4 forms.
The following checklist provides six simple steps for small businesses to get their payroll data in order:
- Verify employee data
- Verify and review benefit information for your employees
- Verify and review payroll deductions
- Complete a T4 slip for each employee
- Complete and remit a T4 Summary form
- Review employee wages and benefits for next year
A T4 slip is the end-of-year form that you give to each employee and submit to Canada Revenue Agency (CRA)- usually no later than the last day in February. T4s report the employee's wages and taxes withheld for the calendar year. See the following checklist for the things to report on a T4 slip:
- salary, wages (including pay in lieu of termination notice), tips or gratuities, bonuses, vacation pay, employment commissions, gross and insurable earnings of self-employed fishers, and all other renumeration you paid to employees during the year;
- taxable benefits or allowances;
- retiring allowances;
- deductions you withheld during the year; and
- pension adjustment (PA) amounts for employees who accrued a benefit for the year under your registered pension plan (RPP) or deferred profit sharing plan (DPSP)
You have to complete T4 slips for all individuals who received renumeration from you during the calendar year if:
- you had to deduct CPP/QPP contributions, EI premiums, PPIP premiums, or income tax from the renumeration; or
- the renumeration was more than $500.
To generate and prepare T4s in QuickBooks, refer to Payroll Taxes and Forms.
Once all T4s are printed, you must prepare a T4 Summary. Your T4 Summary is a report that Revenue Canada requires. This summary report totals all employees earnings as recorded on the T4s. It also totals the deductions and payroll taxes (CPP and EI) withheld from the employees during the calendar year. Lastly, this form is used to reconcile those amounts with the source deduction payments that you remitted to CRA. The T4 Summary Form can be located on the CRA website here.
Your T4 Summary Report is due to be filed with Revenue Canada by the last day of February of the following year. If you late in filing your T4 Summary, you could be faced by a penalty imposed on you by Revenue Canada.
To generate a T4 summary in QuickBooks, refer to Payroll Taxes and Forms.
Additional CRA resources
- Federal and Provincial TD1 forms
- T4 Summary
- Benefits and Allowances page
- T4001 - Employer's Guide to Payroll Deductions and Remittances
- Remitter Types and Due Dates