T4 vs. T4A Slip: Who gets what and how to produce them

If you’ve ever stared at a list of workers and wondered which slip goes to whom, you’re not alone. The T4 vs. T4A slip question trips up a lot of Canadian businesses, especially as teams grow to include a mix of full-time employees and independent contractors.

Get it wrong and you’re looking at reporting errors, CRA follow-up and a lot of unnecessary back-and-forth. Get it right and tax season becomes a whole lot smoother for everyone.

Here’s what you need to know.

In this post, you’ll learn:

• The core difference between a T4 and T4A slip
• Who receives each slip and what gets reported on them
• When to issue each one and common mistakes to avoid
• How to produce both slips without losing your mind

The core difference: employment income vs. other income

The T4 and T4A slips are both CRA information slips, but they serve different purposes and apply to very different working relationships.

T4 (Statement of Remuneration Paid) is the slip you issue to employees. It reports employment income and the deductions you’ve withheld on their behalf—CPP contributions, EI premiums and income tax.

T4A (Statement of Pension, Retirement, Annuity and Other Income) covers a much wider range of payments. For most growing businesses, the relevant use is reporting fees paid to self-employed contractors, freelancers and other non-employees.

The distinction matters because employees and contractors are treated completely differently from a tax perspective. Employees have deductions taken at source. Contractors manage their own taxes and are simply reported to the CRA through the T4A.

Who gets a T4 slip?

Anyone you pay as an employee gets a T4. That means people who work under a contract of service—where you direct how and when the work gets done, provide the tools and pay CPP and EI.

A T4 captures:

• Regular wages and salary
• Overtime pay
• Commissions paid to employees
• Bonuses and vacation pay
• Taxable benefits (car allowances, group life insurance premiums for current employees, etc.)
• Tips and gratuities in some situations
• CPP contributions deducted
• EI premiums deducted
• Income tax deducted

If you’ve been withholding payroll deductions from someone’s pay, they’re getting a T4.

Who gets a T4A slip?

The T4A is issued to anyone who received certain types of non-employment income from your business. For most employers in the context of contractor management, the most relevant uses are:

• Box 020—Self-employed commissions: Commissions paid to an independent sales agent or broker
• Box 048—Fees for services: Fees paid to contractors, consultants and freelancers for work performed

Other T4A uses include pension and annuity payments, research grants, RESP payments and various other income types, but for the purposes of this post, we’re focused on what matters most for businesses working with contractors.

When must you issue a T4A slip?

Under the CRA’s administrative policy, you generally need to issue a T4A to a contractor if:

• Total payments during the calendar year exceed $500
• You deducted income tax from any payment

If a contractor is a construction subcontractor, different rules apply and a T5018 slip is used instead.

T4 vs. T4A slips: a quick comparison

Common mistakes businesses make

Issuing the wrong slip

The most common error is treating a worker as a contractor when the CRA considers them an employee, or vice versa. If someone is actually an employee by the CRA’s classification test, they need a T4—not a T4A. Issuing a T4A to a misclassified employee doesn’t protect you from the liability of not withholding CPP, EI and income tax.

Including GST/HST in the reported amount

Both Box 048 and Box 020 on the T4A should show the fee or commission exclusive of GST/HST. If a contractor charged you $5,000 plus $650 GST/HST, you report $5,000 on the T4A—not $5,650.

Missing the $500 threshold

Plenty of businesses forget to track smaller contractor payments through the year and then scramble at year-end. If the annual total across multiple invoices exceeds $500, a T4A is required.

Missing the filing deadline

T4 and T4A slips must be distributed to recipients and filed with the CRA by the last day of February following the calendar year they relate to. Missing this creates late-filing penalties and frustrated contractors who need their slip to complete their own taxes.

Using Box 048 inconsistently

Some businesses report contractor fees in Box 028 (other income) instead of Box 048. While the CRA hasn’t historically enforced penalties for Box 048 errors in most industries, accurate reporting is still the right practice and keeps your filings clean.

How to produce a T4 slip: a high-level overview

Step 1: Confirm employment status

Before you start, make sure every person you’re producing a T4 for is genuinely an employee under the CRA’s classification criteria.

Step 2: Gather payroll data for the year

Pull together total employment income paid, all payroll deductions withheld (CPP, EI and income tax) and any taxable benefits provided.

Step 3: Complete the slip

Enter the employee’s SIN, their name and address, your payroll account number and the relevant amounts in each box. Box 14 is employment income, Box 22 is income tax deducted, Box 16 is CPP contributions and Box 18 is EI premiums.

Step 4: Distribute to employees

Give each employee their copy by the last day of February.

Step 5: File with the CRA along with your T4 Summary

Submit all slips and your T4 Summary to the CRA by the last day of February.

How to produce a T4A slip: a high-level overview

Step 1: Identify who needs one

Review all contractor payments for the calendar year. Flag any individual or sole proprietor you paid more than $500 in fees or commissions.

Step 2: Collect the right information upfront

You’ll need each contractor’s SIN (for individuals) or Business Number (for incorporated contractors). This is why collecting this information before the first payment is so important—chasing it in February is no fun for anyone.

Step 3: Calculate the reportable amount

Add up total fees paid to each contractor for the year, excluding GST/HST.

Step 4: Complete the slip

Enter the contractor’s name, SIN or BN, your payroll account number and the relevant amounts. Fees for services go in Box 048. Self-employed commissions go in Box 020.

Step 5: Distribute to contractors

Send each contractor their copy by the last day of February.

Step 6: File with the CRA along with your T4A Summary

Submit all T4A slips and your T4A Summary to the CRA by the last day of February.

Recordkeeping and filing readiness

Strong records make slip season far less painful. Here’s what to keep on file:

• A copy of every T4 and T4A you’ve issued
• Supporting payroll records for employees (pay stubs, payroll reports)
• Contractor invoices for every payment that appears on a T4A
• Proof of payment (bank records, EFT confirmations)
• Contractor agreements or statements of work

The CRA generally recommends keeping business records for at least six years from the end of the last tax year they relate to.

Hero tip: Track contractor payments through the year, not just at year-end. If you know in June that you’ve paid a freelancer $3,000, you’re not scrambling to find their SIN in late February.

Make payroll and contractor admin less of a headache

T4s go to employees. T4As go to contractors and other non-employment income recipients. Both are due by the last day of February. Neither should include GST/HST in the reported amount.

The key to getting this right isn’t just knowing which slip to issue—it’s having clean records, collected contractor information and a clear picture of every payment you’ve made through the year. Build that process now and year-end becomes straightforward instead of stressful.

Ready to take the manual effort out of contractor payments for good? Employment Hero’s Contractor Payments feature is designed to help you pay contractors, collect the right information and stay T4A-ready all year round, not just in February. Learn more about how you can take the stress out of contractor payments today.