Canadian Payroll Year-End
Payroll Year-End can be successful and stress free as long as you have prepared for it throughout the year. We round up some of the most important resources you’ll need to make sure you have a smooth (and compliant) 2018 Year-End for your Canadian Payroll and a great start heading into 2019.
Who Can Use the Payroll Year-End Toolkit?
If you run a Payroll or get paid in Canadian, this guide is for you! We built this guide primarily for Canadian Payroll and Accounting professionals responsible for processing their Payroll Year-End. However, you’ll find several resources that you can share with your fellow employees and managers to make sure that they have a positive Payroll experience when the time comes for them to file their income taxes for 2018.
2018 Canadian Payroll Year-End Best Practices
Here are a few best practice checklists to help you have your best Payroll Year-End yet.
Make sure you know what’s new for your first pay of 2019
- Check rates and limits for CPP /QPP contributions, EI and QPIP premiums
- Compare the TD1 forms from last year to this year for federal and provincial changes
- Note Pension Adjustment and RRSP limits
- Are there any Federal income tax changes
- Look for changes in WCB rate and maximum earning amounts and add WCB reporting dates to your calendar
- Add any legislated provincial minimum wage changes to your calendar to make sure they are updated on-time
- If you pay weekly or bi-weekly check the calendar to see if this is a year where you will have 53 or 27 pay periods and adjust your pay calendar accordingly
A great idea is to put together a one-page brief for your employees summarizing all of the new year information so they are aware and can plan for changes to their pay based on the new values. It also provides a great opportunity to remind them to complete their new TD1s and to encourage them to start their savings plan for the new year.
Advance preparation for tax slips (e.g. T4, T4A, RL-1)
- Run quarterly reconciliation reports
- Review your tax slip boxes mid-year
- Create a list of who to get what additional payroll year-end information from
(e.g. stock option information from HR by xx/xx/xxxx date)
- Note banking and stat holidays for planning purposes
- Check for employees who have moved between business numbers or provinces
- Create templates for all of your employee and contractor communications
(e.g. when tax slips will be available, how to read tax slips, who to contact with questions)
Vacation or other entitlement carry-over policies
If you have a maximum carry-over policy in place plan to provide reports in September to your managers of all vacation or other entitlement balances. They can then start the conversation with any employees who have excess vacation or entitlements on how they can use it or prepare to request to an exception on the amount they can carry over to the next year.
Canadian Payroll Association Year-End Checklist
2019 Canadian Payroll Source Deductions
Get all the 2019 Canadian Payroll deduction tables and information you need from our quick reference guide.
2019 Source Deductions, Rates, and Changes for Your Payroll Year-End Reference
- CPP / QPP
- EI / QPIP
- Worker’s Compensation Rates
- Pensionable Adjustment Limits
- Federal TD1 Changes
- Provincial TD1 Changes
- Minimum Wage Info
Canada Pension Plan (CPP) & Québec Pension Plan (QPP)
|Maximum pensionable earnings||$57,400||$57,400|
|Annual basic exemption||$3,500||$3,500|
|Contribution rate (%)||5.10||5.55|
|Maximum employee contribution||$2,748.90||$2,991.45|
|Maximum employer contribution||$2,748.90||$2,991.45|
Employment Insurance (EI) & Québec Parental Insurance Plan (QPIP)
Worker’s Compensation Rates (WCB, WSIB, & CSST)
Pension Adjustment Limits
Federal TD1 Changes for 2019
|Federal TD1 (form)||2019||2018|
|Pension income amount||$2,000||$2,000|
|Spouse or common-law partner amount||$12,069||$11,809|
|Amount for eligible dependent||$12,069||$11,809|
|Caregiver amount or infirm amount for dependant 18+||$7,140||$6,986|
Provincial TD1 Changes for 2019
|Basic Personal Amount||2019||2018|
|British Columbia (form)||$10,682||$10,412|
|New Brunswick (form)||$10,264||$10,043|
|Newfoundland and Labrador (form)||$9,414||$9,247|
|Northwest Territories (form)||$14,811||$14,492|
|Nova Scotia (form)||See Below||$11,481*|
|Prince Edward Island (form)||$9,160||$8,160|
|Québec (EN) (FR)||$15,269||$15,012|
*If the employee’s taxable income from all sources for the year will be $25,000 or less. See the TD1NS-WS Worksheet for more information.
Nova Scotia basic personal amount – Every person employed in Nova Scotia and every pensioner residing in Nova Scotia can claim the basic personal amount. If your taxable income from all sources for the year will be $25,000 or less enter $11,481, comprising the basic amount of $8,481 and the additional amount of $3,000, and if it is more than $75,000 enter $8,481. If your taxable income will be between $25,000 and $75,000 and you want to calculate a partial claim for the $3,000 additional amount, get Form TD1NS-WS, Worksheet for the 2019 Nova Scotia Personal Tax Credits Return, and fill in the appropriate section
Minimum Wage Info
|Jurisdiction||Hourly Rate||Effective Date|
|Newfoundland & Labrador||$11.15||4/01/2018|
|Prince Edward Island||$11.55||4/01/2018|
Top 10 Payroll Audit Adjustments from CRA
Each year, the Canada Revenue Agency provides a lit of commonly requested adjustments to an employer’s payroll as a result of wages and benefits not being correctly reported by the employer.
Top 10 Payroll Audit Adjustments from Canada Revenue Agency (2017 reporting Year)
Thanks to our friends at the Canadian Payroll Association (become a CPA member here) for making this list available.
1. Unreported Payments for Independent Contractors
Failure to report fees for services paid to independent contractors on the prescribed T4A tax slip.
2. Security/Stock Options
A common method of compensating officers and employees providing them with a financial benefit as well as a sense of ownership with the employer. Taxable benefits are not being reported when stock options are exercised.
3. Automobile Standby and Operating Expense
Employees are not maintaining proper logbooks to separate personal and business driving so employers are not calculating the benefit correctly. Incorrect perception that if a vehicle doesn’t meet the definition of an ‘automobile’ there is no benefit to be reported.
4. Housing, Low/Free Rent, Board & Lodging
With the exception of special or remote worksites, most employees that receive free or subsidized housing from their employer would be deemed to receive a taxable benefit based on fair market value (FMV). In some instances, the value of the benefit may be reduced.
5. Unreported Payments
Includes unreported salary and wages such as bonuses, commissions and cash payments to employees that must be included on a T4 tax slip.
6. Travel Expenses and Allowances
In order to be treated as non-taxable, travel expenses and allowances must be reasonable and clearly validated as business expenses that primarily benefit the organization.
7. Reclassification of Employee Status
Individuals operating as self-employed contractors when they should be treated as employees or vice versa.
8. Personal and living expenses (employees or shareholders)
Many corporate owners look at this type of expense as personal drawings and are therefore not reporting it as taxable income. These include appropriations of corporate assets for personal user. Some employees as part of their compensation agreement may have persona living expenses paid for by the employer unless these fall under a specific exemption this would be considered taxable income.
9. Vehicle Allowances
Employers are providing non-accountable vehicle allowances to their employees and not reporting the benefits as income, this ca include cash allowances, gas cards, or reimbursements.
Employers are not reporting the value of this benefit and when they do, they report a minimum amount and not the true fair market value (FMV).
2019 Canadian Payroll Calendar
This 2019 calendar includes all the National, Provincial, and Baking Holidays. Print it and post it by your desk for quick reference.
Tax Slip Guides for Canadian Payroll Year-End
Our visual tax slip guides are the most accessed resources we provide for Canadian Payroll Year-End. You’ll find a bilingual guide to T4 tax slips, a T4A tax slip guide and the Relevé RL-1 tax slip guide (English only) for employees in Québec.
What do all those boxes on your T4 Tax Slip mean?
The T4, also known as the Statement of Remuneration Paid, is a year-end tax form that shows how much money you earned in the tax year and how much was withheld and remitted to the Canada Revenue Agency (CRA). You need it when you file your tax return.
A Description of Each Box in a T4 Tax Slip (In English and French)
Province of Employment – Province d’emploi
If you worked in more than one Province you will receive multiple T4s, one for every Province you have worked in.
Si vous avez travaillé dans plusieurs provinces vous recevrez un T4 par province.
Social Insurance Number (SIN) – Numéro d’Assurance Social (NAS)
Your Social Insurance Number.
Votre Numéro d’Assurance Social (NAS)
Employment income – Revenus d’emploi
Includes not only your wages but also any vacation, bonuses, and taxable benefits, often a summary of several T4 boxes.
Contient le total de vos rémunérations ce qui peut inclure mais ne se limite pas aux vacances, bonus et avantage sociaux imposable. La case 14 est généralement un sommaire de plusieurs cases du T4.
Employee’s CPP contributions – Cotisations de l’employé au RPC
The maximum for 2018 is $2,593.80
Le maximum pour 2018 est $2 593,80
Employee’s QPP contributions – Cotisations de l’employé au RRQ
This will only be populated if you worked in Québec. The maximum for 2018 is $2,829.60
Cette case sera complétée seulement si vous avez travaillé au Québec. Le maximum est pour 2017 est $2 829,60
Employee’s EI premiums – Cotisations de l’employé à l’AE
The maximum for 2018 is $858.22
Le maximum pour 2018 est $858,22
RPP contributions – Cotisations à un RPA
The amount of any Registered Pension Plan contributions.
Le montant des contributions faites à un régime de pension agréé
Income tax deducted – Impot sur le revenu retenu
Total amount deducted from your pay for income tax (Federal and Provincial).
Montant total des déductions faites pour les impôts sur le revenu.
EI insurable earnings – Gains assurables d’AE
The maximum for 2018 is $51,700
Le maximum pour 2018 est 51 700$
CPP/QPP pensionable earnings – Gains ouvrant droit à pension
The maximum for 2018 is $55,900
Le maximum pour 2018 est 55 900$
Exempt CPP/QPP, EI and PPIP – Exemption de RPC/RRQ, AE, RPAP
An X under CPP/QPP, EI, or PPIP indicates that your earnings are exempt from these withholdings. The majority of taxpayers are not exempt, so it will likely be left blank.
Un X inclus dans ces cases indique que le revenu d’un employé est exempt pour RPC/RRQ, AE ou RPAP. La majorité des contribuables ne sont pas exempt, donc ces cases seront probablement vides.
Employment Code – Code d’emploi
This code only applies to specific situations for CPP like employment agency workers, taxi drivers and barbers or hairdressers, otherwise it will be left blank.
Ce code est seulement utilisé dans des situations spécifiques comme conducteur de taxi ou coiffeur par exemple pour le RPC.
Union Dues – Cotisations Syndicales
This box contains all union dues collected for this tax year.
Cette case contient toutes les cotisations syndicales
Charitable Donations – Dons de bienfaisance
This box contains any charitable donations made through Payroll. If you made other donations outside the office, the charity must issue you a separate tax receipt.
Cette case contient le total des donations qui ont été faites par le service de paie. Si vous avez fait d’autre donations assurez-vous d’avoir un reçu de paiement.
RPP or DPSP registration number – Numéro d’agrément d’un RPA ou d’un RPDB
This is your employer’s registration number for a company pension or deferred profit sharing plan.
Cette case inclus le numéro d’enregistrement de l’employeur pour une caisse de pension ou un régime de participation différée aux bénéfices.
Pension adjustment – Facteur d’équivalence
This is the amount that shows pension contributions that impact the total RRSP amount allowable for the year.
Ce montant indique les contributions qui affectent le total admissible dans les REER pour l’année
Employer’s account number – Numéro de compte de l’employeur
This is your employer’s business number.
Cette case est pour le numéro de compte de l’employeur.
Employee’s PPIP premiums – Cotisations de l’employé au RPAP
This stands for Provincial Parental Insurance Plan and is only applicable to Québec employees.
Cette case est pour les cotisations de l’employé au Régime Provincial d’Assurance Parental. Cette cotisation ne s’applique que pour les employés du Québec.
PPIP insurable earnings – Gains assurables au RPAP
This stands for Provincial Parental Insurance Plan and is only applicable to Québec employees, it shows the insurable earnings for this plan for the year.
Cette case est pour le montant assurable utilisé pour calculé les cotisations de l’employé au Régime Provincial d’Assurance Parental. Ce montant ne s’applique que pour les employés du Québec.
Other Information – Information supplémentaire
These are additional boxes that can be populated for other amounts not shown elsewhere on the T4 Tax Slip.
Ces cases sont utilisées pour d’autres montants qui ne sont pas inclus dans le reste du feuillet T4.
Employer’s name – Nom de l’employé
Your employer’s legal name.
Le nom légal de votre employeur.
Employee’s name and address – Nom et adresse de l’employé
Your legal name and current address.
Votre nom légal et adresse actuel.
Year – Année
The taxation year the T4 is issued in.
L’année d’imposition dans laquelle le T4 a été créé.
How to Read Your T4A Tax Slip
What do all those boxes on your T4A tax slip mean?
- pension or superannuation;
- lump-sum payments;
- self-employed commissions;
- patronage allocations;
- registered education savings plan (RESP) accumulated income payments;
- RESP educational assistance payments;
- fees or other amounts for services;
- other income such as research grants, wage-loss replacement plan payments if you were not required to withhold Canada Pension Plan (CPP) contributions and employment insurance (EI) premiums, death benefits, or certain benefits paid to partnerships or shareholders.
A Description of Each Box in a T4A Income Tax Slip
Box 12 – Social Insurance Number (SIN)
Your Social Insurance Number.
Box 16 – Pension or superannuation
This is any pension or superannuation amount paid to you.
Box 18 – Lump-sum payments
This box contains any lump sum payments you have received. It will include any amounts from the following boxes: 102,108,110, 158, 180,190.
Box 20 – Self-employed commissions
This box contains any commissions you received when you were self-employed.
Box 22 – Income tax deducted
This is any income tax that was deducted from payments made to you.
Box 24 – Annuities
This box contains any annuities you received.
Box 48 – Fees for services
This box contains any fees you paid for business services.
Other Information Boxes on Your T4A
All other box numbers will be entered as required. Here is an explanation of additional box numbers that you may see on your T4A income tax slip:
Box 26 – Eligible retiring allowances
Box 27 – Non-eligible retiring allowances
Box 28 – Other income
Box 30 – Patronage allocations
Box 32 – Registered pension plan contributions (past service)
Box 34 – Pension adjustment
Box 40 – RESP accumulated Income Payments
Box 42 – RESP educational assistance
Box 46 – Donations and gifts
Box 48 – Fees for services
Box 131 – Registered disability savings plan
Box 133 – Variable pension benefits
Box 135 – Premiums for private health services
Box 102 – Lump-sum payments – non-resident
Box 104 – Research grants
Box 105 – Scholarships, bursaries, fellowships, artists’ project grants and prizes
Box 106 – Death benefits from employer
Box 107 – Wage-loss replacement plan
Box 108 – Lump-sum payments from a RPP
Box 109 – Periodic pay from unregistered plan
Box 110 – Lump-sum payments accr. Dec 31, 1971
Box 111 – Income averaging annuity contracts
Box 115 – DPSP annuity or instalment payments
Box 116 – Medical travel assistance
Box 117 – Loan benefit
Box 118 – Medical premium benefits
Box 119 – Group term life insurance premiums
Box 122 – RESP accumulated income payments to other
Box 123 – Payments from a revoked DPSP
Box 124 – Board and lodging at special work sites
Box 125 – Disability benefits from pension
Box 126 – Pre-1990 past service contributions while a contributor
Box 127 – Veterans’ benefits
Box 129 – Tax deferred cooperative share
Box 130 – Apprenticeship incentive or completion grant
Box 131 – Registered disability savings plan
Box 132 – Wage Earner Protection Program
Box 134 – TFSA taxable amount
Box 136 – Federal income support for parents of murdered or missing children grant
Box 142 – Status Indian (exempt income) – Eligible retiring allowances
Box 143 – Status Indian (exempt income) – Non-eligible retiring allowance
Box 144 – Status Indian (exempt income) – Other Income
Box 146 – Status Indian (exempt income) – Pension or superannuation
Box 148 – Status Indian (exempt income) – Lump-sum payments
Box 150 – Labour Adjustment. Benefits Act and Appropriation Acts
Box 152 – SUBP qualified under the income tax act
Box 154 – Cash award from or prize from payer
Box 156 – Bankruptcy settlement
Box 158 – Lump-sum payments that are not reported elsewhere
Box 162 – Pre-1990 past service contributions while not a contributor
Box 180 – Lump-sum payments from a DPSP
Box 190 – Lump-sum payments from an unregistered plan
Box 194 – PRPP Payments
Box 195 – Status Indian (exempt income) PRPP payments
Box 196 – Tuition assistance for adult basic education
How to Read Your Relevé RL-1 Tax Slip
What do all those boxes on your RL-1 Tax Slip mean?
*This is an English guide to the RL-1 Tax Slip issued by Revenu Québec. For more information on the French version, please visit revenuquebec.ca
If you earned income or are employed in the Province of Québec, the RL-1, also known as Relevé 1, is a year-end tax form that shows how much money you earned in the tax year and how much was withheld and remitted to Revenu Québec. You need it when you file your tax return.
A Description of Each Box in a RL-1 Tax Slip
Box A – Employment income before source deductions (line 101)
Box B – Québec Pension Plan (QPP) contribution (line 98)
Box C – Employment Insurance premium
Box D – Registered pension plan (RPP) contribution (line 205)
Box E – Québec income tax (including the health contribution) withheld at source (line 451)
Box F – Union dues (line 397.1)
Box G – Pensionable salary or wages under the Québec Pension Plan (QPP) (line 98.1)
Box H – Québec parental insurance plan (QPIP) premium (line 97)
Box I – Eligible salary or wages under the Québec parental insurance plan (QPIP) (line 14 of Schedule R)
Box M – Commissions included in the amount in box A or box R (line 100)
Box N – Charitable donations and gifts
See the instructions for line 395 in the guide to the income tax return.
Box O – Other income not included in box A
See the section “Codes used in the “Code (case O)” box.”
Box Q – Deferred salary or wages
(salary or wages that are tax-exempt and not included in the amount in box A or box R)
Box R – Income paid to an Indian and situated on a reserve or premises
Box S – Tips not included in box T
This amount is already included in the amount in box A or box R.
Box T – Tips allocated by the employer
This amount is already included in the amount in box A or box R.
Box U – Amount deemed, under a phased retirement arrangement, to be income received from pensionable employment, on which an additional contribution to the Québec Pension Plan (QPP) is calculated.
This amount is tax-exempt and is not included in the amount in box A or box R.
Taxable Benefits Included in Box A or Box R, As Applicable
Box J – Amount paid by the employer to a private health services plan
See the instructions for line 381 in the guide to the income tax return.
Box K – Trips made by a resident of a designated remote area.
See the instructions for line 236 in the guide to the income tax return.
Box L – Other benefits
Box P – Contribution to a multi-employer insurance plan (Work chart 105)
Box V – Meals and lodging
Box W – Use of a motor vehicle for personal purposes
Boxes Under Additional Information (Renseignements complémentaires)
Box A-1 – Employee benefit plan
Box A-2 – Employee trust
Box A-3 – Repayment of salary or wages (line 207)
Box A-4 – Chainsaw expenses
Box A-5 – Brushcutter expenses
Box A-6 – Remuneration received by a Québec sailor (line 297)
Box A-7 – Canadian Forces personnel deduction (line 297)
Box A-8 – Deduction for police officers (line 297)
Box A-9 – Deduction for foreign specialists (line 297)
Box A-10 – Deduction for foreign researchers (line 297)
Box A-11 – Deduction for foreign researchers on a post-doctoral internship (line 297)
Box A-12 Deduction for foreign experts (line 297)
Box A-13 – Deduction for foreign professors (line 297)
Box A-14 – Exemption rate
Box B-1 – Canada Pension Plan (CPP) contribution (line 96)
Box D-1 – Retirement compensation arrangement (line 207)
Box D-2 – Contribution for service before 1990: Contributor
Box D-3 – Contribution for service before 1990: Non-contributor
Box G-1 – Taxable benefit in kind (line 102)
Box G-2 – Pensionable earnings under the Canada Pension Plan (CPP) (line 96.1)
Box K-1 – Trips for medical services
Box L-2 – Volunteer: Compensation not included in boxes A and L
Box L-3 – Tax-exempt allowance for expenses incurred in the course of duties
Box L-4 – Benefit resulting from a debt contracted for the acquisition of investments (line 231)
Box L-5 – Deduction for a home relocation loan (line 297)
Box L-7 – Benefit related to a security option at the time of death
Box L-8 – Election respecting security options
Box L-9 – Security option deduction under section 725.2 of the Taxation Act (line 297)
Box L-10 – Security option deduction under section 725.3 of the Taxation Act (line 297)
Box O-2 – Deduction for patronage dividends (line 297)
Box O-3 – Redemption of preferred shares
Box O-4 – Repayment of wage loss replacement benefits (line 207)
Box RZ-XX – Amount corresponding to one of the sources included in box O
Box R-1 – Employment income (lines 101 and 293)
Box V-1 – Tax-exempt benefit for board and lodging
Box 200 – Currency used
Box 201 – Allowance for childcare expenses (line 40 of Schedule C)
Box 211 – Benefit related to previous employment
Box 235 – Premium paid to a private health services plan
Refer to the instructions for line 381 in the guide to the income tax return.
Canada Pension Plan (CPP) Enhancements
*New to the 2018 Payroll Year-End Toolkit! What are the changes coming to CPP for Jan 1, 2019?
What you need to know about the Canadian Pension Plan (CPP) enhancements
The CPP will be enhanced gradually over a 5-year period, allowing employees and employers to adjust to the change. This means that you will have slightly more CPP contributions deducted from each pay cheque starting January 2019.
Currently, the contribution rate is 4.95%. As of January 2019, contribution rates will increase 0.15% for both 2019 and 2020, 0.20% in 2021, and 0.25% in 2022 and 2023. As a result, by 2023 each employee and employer will be contributing 5.95% annually, for a combined total of 11.9%. See the chart below for a breakdown of the contribution rates from 2018-2023:
|Year||Increase Rate||Employee contribution rate||Employer contribution rate|
|2023 (and after)||1.00%||5.95%||5.95%|
The above contribution rates apply to all pensionable earnings that are above the Year’s Basic Exemption (YBE) of $3,500, and below the Year’s Maximum Pensionable Earnings (YMPE), of $57,400 for 2019. These earnings from 2019 forward are known as the “first additional pensionable earnings”.
The second pensionable earnings begins in 2024. This is when the Yearly Additional Maximum Pensionable Earnings (YAMPE) will be phased over two years beginning in 2024. The YAMPE is the amount that CPP contributions will be increased by, which is done in two steps. See the chart below for a yearly breakdown of these steps in 2024 and 2025:
|Year||% Increase Rate*||$ Increase Rate*|
Although the actual numbers will depend on the YMPE’s for 2024 and 2025, the numbers above are based on the 2019 YMPE of $57,400.
What changes will I need to make to my Payroll software?
For the first five years, there will be no change to how the CPP is calculated, except the maximum pensionable earnings and the contribution rate for both employees and employers will be raised each year. As a result, your payroll software will only require an update to the contribution percent rate until at least 2023.
How will this impact companies and employees?
By raising the cost of CPP contributions, it increases the “average lifetime earnings” from 25% to 33.33%. Additionally, it is 50% more than what the current maximum retirement pension is. Although this increase will take a few years to fully transition, changes will begin in 2019.
As for the YAMPE, these earnings will be taken into account as part of the second additional pensionable earnings. The total contribution rate for earnings between YMPE and YAMPE will be 8.0%, which means that the burden will be split as 4.0% for employees and 4.0% for employers.
Ultimately, pensions will begin increasing in 2019 as these changes are implemented. Below is a table demonstrating the maximum amount of increase in dollar value:
|Year of Earnings Maximum||Amount of Weekly Increase|
|2024 (and after)||$14.98|
Here is the Canadian Revenue Agency for more information about the impacts on employers and employees: https://www.canada.ca/en/revenue-agency/news/2018/10/the-canada-pension-plan-enhancement–businesses-individuals-and-self-employed-what-it-means-for-you.html
But what will this look like for you?
Take Scott for example. He makes $41,350 annually, and his current contributions are $72.06 are biweekly, per pay period. Due to the CPP enhancements, Scott’s contributions will increase by $2.18 per pay period in 2019, and in 2023 he will contribute an additional $14.56 per pay period. As a result, Scott will contribute $74.24 in 2019, and increase to $86.62 in 2023.
As Scott’s earnings are below the YMPE, he will not be affected by the second additional pensionable earnings contributions in 2024 and 2025.
What will the long-term benefits be?
By having a higher CPP contribution rate, it enables higher retirement benefits for making higher contributions. Your pension will increase based on how much and for how you contribute to the enhanced CPP. Other benefits include:
• Improved death benefits
• Expanded disability provisions
• Earnings drop-in for parents of young children and for disabled CPP contributors
For more information:
Employee Communications for Canadian Payroll Year-End and First Pay Period
Happy New Year! Now you’re in full swing of getting those T4s issued before the end of February, but your inbox and voicemail are starting to pile up with questions from employees. Questions like, ‘What does Box 40 mean on my T4?’ or ‘ When do I get my T4?’. No worries, use the communications templates below to help educate employees on what they can expect regarding Payroll Year-End.
Frequently Asked Questions from Employees for 2018 Year-End and 2019 First Pay Period
Sometimes internal communications get missed. If your employees don’t receive or see your communications regarding 2018 tax slip information or what they can expect from their first pay of 2019, we’ve put together a comprehensive FAQ of the most common questions we find employees will ask their Payroll team on the matter.
Employee Tax Slip FAQ for Payroll Year-End
1. Why do I have two T4 Slips?
If you have received more than one T4 from us there are a few possible reasons:
- You worked at different locations and/or different divisions of the company which required us to produce a T4 for each business number you worked in
- You worked or earned income in different ways, for example you were on contract for a period of time and then gained full-time employment with us
- You worked for the company in two different provinces during the year
If any of these apply, and you received the 2 slips together, it is important that you include them both in your tax return.
2. What is box 40 on my T4?
Box 40 on your T4 is the amount of Taxable Benefits that you have received in the year. Taxable Benefits are those benefits that have been paid by the company on your behalf. Examples of Taxable Benefits include Life Insurance and company RRSP contributions. Taxable Benefits are identified as such on your pay statements. If you total the items identified as Taxable Benefits on your pay statements you should arrive at the total in Box 40. If your total is not the same as Box 40 please contact your Payroll team.
3. Why does my income in box 14 on my T4 seem high?
You may have received two or more T4s. The amount shown in Box 14 in each T4 should be totaled and equal to your final December pay statement year-to-date earnings, plus the total of taxable benefits recorded in Box 40 of each T4. If this is not the case please contact your Payroll team.
4. Why does my income in box 14 on my T4 seem low?
Box 14 includes your gross salary as well as all applicable taxable benefits that are shown in Box 40.The amount shown in Box 40 should be added to your gross year-to-date salary from your final December pay statement. The total should equal the amount shown in Box 14. If this is not the case, please contact your Payroll team.
AND … if your company had an extra pay period this year you can also include this explanation:
This year because we are on a bi-weekly or weekly frequency, our organization had an extra pay period so the amount in Box 14 may be slightly higher than you expected.
5. What is the difference between a T4 and a T4A?
The Canada Revenue Agency requires that different tax slips be used to report specific types of income.
- A T4 is a tax slip issued to report employment income, taxable benefits and retiring allowances.
- A T4A is a tax slip for income such as pension, lump sum payments, and other income as defined by the CRA.
6. How can I get a reprint of my tax slip if I lose it?
You can print as many copies of your T4/T4A from your employee self-service if you opted in to receive your tax slip electronically. If you have not opted in to self-service please contact your Payroll team, we can provide you with a copy of your T4 and help you get registered for self-service.
7. Do I need to print my online tax slips?
If you are filing your taxes electronically, printing the slip is entirely optional as you will always have access to the slips through your employee self-service portal should you need them now or in the future. If you file
electronically, you can read the values for each of the tax slip boxes online as you are completing your income tax return.
8. Will Canada Revenue Agency (CRA) accept a self-printed/online tax slip?
The CRA gladly accepts self-printed tax slips from our employee self-service portal. The form generated matches all specifications from CRA and will look almost identical to a printed T4 or T4A.
9. What if there is incorrect information on my T4/T4A?
If your Social Insurance Number is incorrect, or if the financial information on you believe your tax receipt is incorrect, please contact your payroll team, as we may have to reissue a new tax receipt. If your address is incorrect, simply enter the correct information on your tax return.
10. How do I arrange to make changes to my tax claim amounts or have additional taxes deducted from my pay next year?
You will need to complete and submit new TD1 forms (Provincial and Federal) for 2019 indicating the changes or additional amount to be deducted. The TD1 forms can be accessed through your Employee Self-Service or at the CRA website.
11. Why are over half of my tax slip boxes empty?
Only the tax boxes relevant to you will be completed. But if you feel there is a box that should have a value in it please contact your Payroll team.
12. Why is my income in Box 14 greater than the CPP pensionable / EI insurable earnings?
(i.e. when Box 14 shows $61,888 and Box 24 is $51,700 and Box 26 is $55,900)
Box 24 EI insurable earnings has a maximum of $51,700 (2018) and Box 26 CPP/QPP pensionable earnings has a maximum of $55,900 (2018). If your income is higher than those amounts it is because you reached the maximums.
13. Who should I contact if I have a question?
If you have additional questions or concerns, please contact your Payroll service team.
(you can include a phone number or email address here)
To facilitate a response to your query, please have your T4 and/or T4A, as well as your final December 2018 pay stub available.
14. I need help filing my tax return.
The Canada Revenue Agency can help you if you’re having a tough time filing your income tax return.
If you are a student, senior, person with a disability, a newcomer to Canada, or a low-income earner with a simple tax-filing situation, you can contact the Community Volunteer Income Tax Program (CVITP) at: 1-800-959-8281 to ask for help. CVITP volunteers work with members of local community organizations who can help you complete and file your return. Click here for more information on the Community Volunteer Income Tax Program.
1a.Why is my pay cheque less in January than it was in December?
Check your December 2018 pay statement to see if you maxed out on your CPP and EI contributions in 2018. Remember that CPP and EI restart every January.
1b.Why is my pay cheque less in January than it was in December?
The new employee annual maximum contributions for 2019 are:
- CPP: $2,748.90
- QPP: $2,991.45
- EI: $860.22
- Québec EI: $663.75
- QPIP: $402.39
2. Why is my vacation / sick / PTO balance reset to zero?
Vacation is moved into a previous year accrual bank. Sick and / or PTO are restarted every January with new balances.
3. I would like to contribute to my RRSP in the first 60 days of the new year, what is the RRSP annual contribution limit for 2018?
The RRSP annual contribution limit for 2018 is $26,230.
4. How much am I allowed to put into my TFSA for 2019?
The TFSA limit for 2019 is $6,000.
5. Will the minimum wage be changing in 2019, and if so, when and by how much?
6. Why do I need to complete new TD1s each year?
A new TD1 ensures that you inform us of any changes in your life that impact your income tax calculations (such as you have a new dependent, have recently become a caregiver or have enrolled in school). By completing a new TD1 you are providing information that will make sure your taxes will be calculated accurately at the source.
7. I don’t want additional tax to come off my cheque this year, how can I prevent that?
When you complete your new Federal TD1 leave the “Additional Tax to be deducted” box blank and we will no longer deduct additional tax from your pay.
A Guide to T2200 Forms
Get all the T2200 form information you need for payroll year-end.
What is a T2200 Form?
The T2200 is a Declaration of Conditions and Employment form that an employer completes for employees in the event where an employee’s conditions of employment requires them to work from home and/or results in them incurring expenses.
T2200s can be shared with employees as a PDF which can be printed and completed manually or as a fillable / savable PDF, which can be completed electronically. Here is the link to both versions.
Canada Revenue Agency’s eligible employment expenses guide can be found here.
For employees in Québec, the T2200 equivalent form is called TP-64.3-V, General Employment Conditions. It is also available in PDF and fillable PDF formats. Here is the link to both versions.
Revenu Québec’s eligible employment expenses guide can be found here.
Additional Resources on T2200s
- The HR Insider has put together a guide for employees to help them determine if they qualify for a T2200.
- This week, the Canadian Payroll Association is offering a webinar on the topic, for more information or to register, click here.
Helping your employees determine their T2200 eligibility and making sure they are aware that their forms may not be accepted by CRA, are important steps in maintaining good relationships with your employees.
Canadian Payroll Legislative Updates and Links
Here you’ll find provincial and federal information on payroll deductions, payroll year-end employer kits, and more.