Save yourself some pain: collect Tslip data and secure consent for e-distribution upon contract

One of the most painful parts of Tslip season is tracking down any missing information for recipients (e.g. SIN, address, email address) so that you can submit their tslip to the CRA and distribute their copy by the February 28 deadline. 

This can be particularly difficult with T4A recipients who are engaged on a short-term basis,  or who are living elsewhere and not in regular communication with your organization. Sometimes contract workers don’t file their income taxes on an annual basis, and therefore do not feel the same sense of urgency in regards to receiving their T4A on time… but when they’re ready to catch up, they don’t want to be delayed! 

The best way to avoid the pain is to collect all the necessary data upon engagement of the individual. Consider making full name, SIN, phone number, address, and email address standard fields on a contract, letter of agreement, or other initiating document so that you are ready for T-slip season before you pay the individual. 

And, since e-distribution of T4As, T4ANRs, and T5s (as well as certain T4s - click here for more info) requires consent from the recipient, add another standard field on your contracts to allow each individual to confirm their email address and opt in to receiving their tslip via e-distribution. 

Taking a bit of extra care at the contracting phase will save you a lot of frustration when February rolls around.  
 

T4 slips can now be distributed electronically

In an attempt to encourage efficiency and reduce administrative burden for filers, the 2017 Federal Budget allows employers to electronically issue T4 slips to active employees, even without obtaining prior consent. Until this announcement, employers could send one copy of the T4 electronically, provided they had the employee's consent ahead of time, (as well as still providing one paper copy), or they could send two paper copies to the employee's mailing address or provide two paper copies in person. 

The Budget announcement means that for 2017 T4 slips (and those for any subsequent year), employers now do not have to obtain consent from an employee to distribute their T4 electronically, provided the following considerations are met:

• the employee is currently active (not on leave, has not left the company)

• (by the last day of February in the year following the calendar year to which the T4 applies) the employer provides the employee

  • a secure electronic portal through which the employee can obtain access their T4 slip,

  • a secure site for printing the T4 slip, and

  • an option to receive paper copies of the T4 slip, upon request.

The employer must distribute 2 paper copies of the T4:

• if the employee has requested that method
• if the employee is on leave or no longer with the company
• if the employee can not reasonably be expected to access the T4 electronically
• if the employer cannot meet the above conditions for secure electronic transfer (unless the employee had previously provided consent to receive the T4 slip electronically)

It is important to note that Budget 2017 does not consider email to be a secure method of transferring sensitive information included in the T4 slip, and it does not permit employers to use email as a method of distributing the T4 to employees without their prior consent. So, the only case in which a T4 slip is permitted to be distributed to an employee by email is if the employee has previously provided (written or electronic) consent to receive one copy of the T4 by email. 

Visit this page on the CRA website for more information.

Annual T-Slip Deadline – February 29, 2012

Staff Post
By Heather Young 

The annual payroll reporting deadline is looming. T4 and T4A slips must be filed by Wednesday, February 29, 2012.

T4 Slips

In preparation, you should reconcile your payroll accounts: make sure that the balance on your PD7A form (i.e. the total source deductions that the government acknowledges receiving) matches the total of the cheques you issued.

Conduct your own “pensionable and insurable earnings review.” The Canada Revenue Agency (CRA) checks this for every filer. Before you submit your T4s, you should confirm that the correct CPP and EI amounts were withheld, and were properly matched with employer contributions. If you find any shortage, it needs to be accrued to the employee record and remitted to the CRA.

Review your company’s employment relationships for any taxable benefits. Taxable benefits are items above and beyond payroll that have a value for employees, and that the CRA considers taxable income. Check this page on the CRA website for information about cell phones, parking, transit passes, insurance, gifts and other benefits.

Taxable benefits should be processed on a pay period by pay period basis, as required by law. If you’ve overlooked something, though, be sure to record it and remit the appropriate taxes at payroll year-end.

T4A Slips

Here’s the CRA’s word on when you need to issue T4A slips.

For small not-for-profits, including arts organizations, the most common requirement is to document “fees or other amounts for services.” This includes freelancer and self-employed contractor fees and, indeed, fees paid to any unincorporated business. (That is, cases where the fees are to be reported on a personal income tax return.)

Amounts paid to freelancers are to be reported on Box 48 of the T4A slip.

Here’s what the Canadian Payroll Association says about T4As: “The CRA is currently conducting a review of the types of payments that payers will be required to report in this box (i.e. Box 48). While this reporting requirement may be expanded in the future, it currently applies only to payers of independent or self-employed contractors, who should report any fees (excluding GST/HST) on the T4A using Box 48.”

Late filing

The penalties for late filing of T4 and T4A information returns can be found here on the CRA website.

Questions? Please contact us or comment below and we’ll do our best to help!