8.4 Year-End Reporting

Year-end reporting is the process of reporting annual employment information to the required government agency (provincial, territorial, and federal).

8.4.1 T4, T4 Information Slip, and T4 Summary

Employers must provide T4 slips to their employees by the end of February after the tax year (usually December 31). T4 slips report employment income, deductions, and other relevant information for income tax purposes. Along with providing T4 slips to employees, employers must also submit a T4 Summary to the CRA. The T4 Summary summarizes the information reported on all T4 slips issued during the tax year. If an employer made payments to independent contractors or provided other types of income such as a pension, they may be required to issue T4A slips and submit a T4A Summary to the CRA.

According to the CRA, the threshold for mandatory electronic filing of income tax information returns for a calendar year is more than 5 T4 slips after December 31 of the current year or 50 T4 slips if you file before January 1 of the following year. The CRA also imposes penalties for not filing information returns over the internet.

The CRA provides an eight-step process to filing the T4 slip and T4 Summary. The detailed process can be found on the CRA website: Employers’ Guide: Filing the T4 Slip and Summary. Generally, the steps are the following:

STEP 1: Determine if you have to file a T4 slip.

STEP 2: Determine the due date.

STEP 3: Consider your T4 return filing method.

STEP 4: Follow the general guidelines for T4 slips and T4 Summaries

STEP 5: Fill out the identification area of the T4 slips.

STEP 6: Fill out the remaining information on T4 slips.

STEP 7: Fill out the T4 Summary.

STEP 8: File your T4 return.

An example T4 slip can be viewed here.

8.4.2 Workers’ Compensation Boards

Workers’ Compensation Boards have required reporting that must be filled out annually according to the employer’s jurisdiction. The table below highlights the annual reporting deadlines by province and territory.

Note: Data collected by author on July 3, 2023.

8.4.3 Internal Year-End Processes: Update Payroll Register

Updating the payroll register involves reviewing and reconciling payroll records to ensure accuracy and completeness for the entire year. Although the specific processes may vary depending on organizational policies, payroll software, and jurisdictional requirements, the following steps are recommended:

1. Gather all payroll-related documents and ensure that all records are complete and accurate.
2. Compare payroll records with financial statements and general ledger accounts for accuracy.
3. Identify any discrepancies or errors found during the reconciliation and make any necessary adjustments.
4. Review year-to-date payroll figures and check for inconsistencies.
5. Review employee information and make necessary updates to reflect changes that occurred throughout the year.
6. Generate year-end payroll reports.
7. Maintain proper documentation of payroll records and year-end reports.

8.4.4 Check for Premium, Rate, and Legislative Changes

During the year-end payroll process, it is important for employers to check for any premium, rate, and legislative changes that may affect payroll calculations. These changes can impact various aspects of payroll, such as EI premiums, CPP contributions, tax rates, and other statutory deductions. To stay current with these changes, employers may source reliable information using the CRA website or professional payroll associations. Employers may also work with a payroll software provider or payroll professional to ensure compliance with legislation.

References

Government of Canada. (2024). Employers’ guide – Filing the T4 slip and summary. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4120/employers-guide-filing-t4-slip-summary.html

Government of Canada. (2021). T4 slip: Statement of remuneration paid. https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t4/t4-22e.pdf

Workers’ Compensation Board – Alberta. (2023). Reporting assessable earnings. https://www.wcb.ab.ca/assets/pdfs/employers/EFS_Reporting_Payroll_(Assessable_Earnings).pdf

Image Credit

Update by geralt, Pixabay licence