T4 season is enough to emote general stress from employers. There’s so much psychological baggage wrapped up in the otherwise innocuous task of filing this annual paperwork.
As employers we’re taken back to the cold sweats of high school, where a test (we know is coming – but still haven’t prepare for) must be written.
It all comes rushing to the foreground: The mysticism of how payroll deductions actually work, and whether we did it right throughout the year. The imposter syndrome (am I really smart enough and responsible enough to actually employ people?!). And, of course, there’s the general frustration from small business owners who don’t have tax lawyers and accountants at their beck and call when it comes time to get clarification or guidance.
Yep, T4 time sucks when you’re not prepared, or leave it until the last minute.
We get it and we’re here to help. We’ve put together an Action Plan for those last minute-rs, who have yet to scratch “file T4s” off their list.
First and foremost, the deadline to file T4’s for the previous calendar year is the last day of February.
Ohhh, all you last minute-ers are in luck this year. Not only do you get an extra day in February 2020 (thank you leap year). BUT this last day also falls on a weekend.
When this happens, your actual deadline is the next business day. So your actual deadline this year is Monday March 2, 2020.
Oh good. So you can just relax right? Put it off another day or two which offsets the bonus days right? In for a penny, in for a pound … right?
The penalties for filing late can be crippling. Not to mention the negative affect on your team’s morale as they are often waiting for their T4 to file their own taxes (which often means getting money back!).
ACTION PLAN #1: Chose A Two Hour Time Block TODAY To Get This Started. Cancel A Meeting If You Have To. Get Someone To Cover A Shift You Are Otherwise Scheduled To Work. Take Any Step Necessary To Start This NOW.
2. Information You May Need To Gather From Others
Let’s get the stuff out of the way that you may need to gather from others, to give them the time to respond.
Employee Mailing Addresses
The main piece of information that consistently changes is the mailing address of employees. This is especially true for employees who no longer work for you. But also applies to your current team.
Send an email right now requesting up to date mailing address.
We’ve made this easy and drafted an email template for you, so no excuses! Send it to everyone who was employed with you during the previous calendar year (past and present employees).
In the future, using WorkSolute to manage your team means that their address and personal details are always up to date.
Your Business Number
The CRA assigns you a nine-digit number that they use to identify your business. You can find this on any CRA document. It’s also often on any provincial or municipal paperwork you receive.
Barring that, check your CRA business account. Or call the CRA business line directly: 1-800-959-5525.
ACTION PLAN #2: Send Out An Email To Past And Present Employees Now (Use The Template If It’s Helpful). And Ensure You Know Your Business Number.
3. Basic Things You Will Need To File T4’s
A cup of water, tea, coffee, scotch … Pick your poison.
Haha. Just kidding. You don’t get anything until you put in your initial two hours (see Action Plan #1 above). So get to work.
We know, harsh right. But at this point you deserve some tough love. And don’t worry, we’re here with you to help walk you through it!
We’ve created a template where you can easily enter the information for quick access when filing T4s.
Or you can use the template as an organizational tool. To do this, input all the names of employees you employed during the year. Then use this as a simple checklist to identify any areas where you are missing necessary information, or where you need to double check the accuracy of the information.
Employee’s full name
Make sure you have their legal name on file. You can’t use shortened names or nicknames. If an employee has legally changed their name in the last year (e.g. they got married), you should have that information on file.
Province of employment
This is the physical location where the employee works. Not where your office is located, and not where their address is located.
As an example, if you’re head office is based in B.C. and your employee lives in Quebec near the boarder but works in Ontario – You use Ontario as the province of employment. Same thing if an employee was transferred between provinces during the year. You will have to prepare two T4s for them as the tax deductions are different in each province.
Social insurance number
This information should be in your employee file from when they were first hired. If not, you will need to get ahold of the employee to get their SIN, or else you may be liable for a $100 fine when you file without a SIN, unless you took reasonable efforts.
Date of birth
Again, this is something you should have already. But if not, reach out directly to individual employees if this information is missing.
WorkSolute puts record keeping on autopilot. Connect with us to find out how simple payroll and HR can actually be!
This includes every cent you gave your employees, invested on their behalf, or used to buy goods or services for them. Some main items that fall under this category include (but aren’t limited to):
- Salary, wages, or commissions,
- Other payment like statutory holiday pay, pay in lieu of termination notice, or vacation pay,
- Tips, gratuities, and bonuses,
- Retiring allowances,
- Amounts spent on taxable benefits (like personal use of an employers car or cell phone, gifts over $500 and many more).
It’s prudent to connect with your managers or anyone else who may benefit from use of company assets to ensure everything is captured.
Total income tax deducted
Remember to include taxable benefits mentioned above in your calculations. And don’t forget to ensure any adjustments employees have made with TD1 forms are captured.
Total CPP/QPP and EI deducted
You are required to make deductions for the Canada Pension Plan (or Quebec Pension Plan in Quebec) and employment insurance. Ensure these are all accurately summed for the year.
ACTION PLAN #3: Download The T4 Information Checklist To Help Organize The Information You Will Need, And Identify Any Areas Where You Are Missing Information.
4. File Your T4s
Time to bring it home.
You can file your T4s through the government of Canada’s website using the internet filing option for “Web Forms”. Or you can use payroll software (like WorkSolute!) to keep everything streamlined.
If you are using the CRA Web Forms option, here is all of the information you’ll need.
If you file online, make sure that you take screenshots of all confirmation numbers to protect yourself.
If you already use payroll software, you will still need all of the information above, but it should already be captured in the software. So you should only have to update information (from your T4 Checklist above) where is is incorrect.
Regardless of your filing method, make sure to keep these documents for six years as it’s required by the CRA.
If you want some further reading for employers, this is a helpful page.
ACTION PLAN #4: Choose Your Method, And Get To Work.
Great job! Hopefully armed with this information you’re ready to get those T4s filed and get back to life. Congratulations!
Also, don’t forget to keep a copy of all documentation for yourself. Previous employees can come back years later looking for information, and it’s your responsibility to be able to provide it.
T4s are a pain, we know. If you want help with them next year, we’re here to serve you.
WorkSolute takes a “white glove” approach to payroll, meaning we do everything we can to destress the entire process for you. For us, payroll (and T4s!) are sacred. If you want us on your team, reach out. We’re here to help!
Was this helpful? Did you get you’re T4s in on time? Tell us about a time when you had a T4 hiccup. How did you solve it!? Comment below!