The T4 form can be useful since it enables a business to record the income of the employees who were paid over the previous calendar year. The physical preparation of these forms, however, can be time-consuming. In this article, we will delve into the filing and preparation of the T4 slips.
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What are T4 Slips or Forms?
T4 slips are yearly forms that can be used to record the earnings and taxes of the employees who were paid during the previous calendar year. In addition to bonuses, salaries, commissions, vacation and sick pay, taxable allowances, the value of taxable benefits, income taxes, and other employment income are all included in it.
When Should You File the T4 Slips?
When the employee’s interests were considered when your company made deductions. You will usually find the following to be deducted:
- Québec Pension Plan (QPP) contributions
- Investments related to Canada Pension Plan (CPP)
- The costs of the Provincial Parental Insurance Plan (PPIP).
- Deductibles for Employment Insurance (EI)
- Furthermore, income tax
- Whenever you gave your staff a $500 or more salary
The preparation of T4 slips for your staff is necessary if you fulfil these criteria. Don’t forget to give employees these slips for each territory or province they’ve worked in for the business.
How to File the T4 Slips in QuickBooks?
You must evaluate the data about your business and employees. Then, make a T4 slip and distribute it to your staff in a practical manner. Make sure to send the completed slip to the Canada Revenue Agency (CRA) after creating it, to finish the procedure. You have to abide by the following procedure:
1st Step: Look into the Company Information
- You have to click on the “Settings” icon
- Following this, you have to go to the “Payroll” settings
- You have to click on “Federal Taxes” on the “Preferences” page
- Once you go to the Company Federal Tax Information page, you have to enter the following information:
- T4 Transmitter Number
- CRA Payroll Number
- Choose the OK button
2nd Step: Examine the Employee Data
- Select “Employees” by clicking.
- Select “Employee“.
- The following details can be added by using the “Edit” button:
- Benefits information for employees
- Employee data
- Payroll withholdings
- Select “Done” from the menu.
3rd Step: Prepare the T4 Slips
- You have to click on the option labeled “Taxes“.
- You have to opt for the Payroll Tax.
- You have to navigate to the “Forms” section and opt for the “Annual Forms” option.
- You have to choose the T4 Slip (employer) option.
- You have to select the tax year as per your choice to check the T4 slip.
- You have to choose the View button to open and analyze the slips in Adobe Acrobat.
You have to be double-sure that the information you are entering is accurate. After that, by clicking the buttons provided by Adobe Acrobat, you may download and print the slips. Close the window following that.
4th Step: Forward T4 Slips to Employees
You must keep in mind that you have to send the T4 slips to your employees by the end of February. You can share the T4 slips in one of the following ways:
- Transmit one T4 slip electronically (by Workforce employee portal or email). It should be mentioned that it’s crucial to acquire the employee’s permission before sending a T4 slip copy electronically, whether it’s in writing or electronic form.
- The employee’s last known address should get two copies through email.
- Please give two copies in person.
Forward the T4 Slip to the Employees with the Workforce
If you want to deliver the T4 slips to your employee using the easiest method (the Workforce Employee Portal), you may do so by following this simple process, which is divided into two steps:
Part 1: You should Invite the Employee to the Workforce
- Select “Employees” from the menu.
- Choose the employee to whom you wish to extend the invitation after that.
- Choose “Edit” from the menu.
- Next, choose the “Pay” tab.
- Mention your employee’s email address.
- Following this, you have to check the mark on inviting an employee to view the pay stubs online on the check
- Select “Done” from the menu.
Your employee will receive an invitation when you complete these procedures. The T4 slip that you are about to send your workers may be obtained by them as soon as they accept the invitation and log into the Workforce.
Part 2: Forward the T4 Slip to the Employee
- Select “Taxes” from the menu.
- Choose “Payroll Tax” from the menu.
- Choose Annual Forms.
- Select the employee you wish to send the T4 slip to from the list of “All Employees“.
- Choose the Employee copy available for T4 slip.
- Click “View to start“. This will open a different tab with your T4 slip in PDF format.
- Select “Send to Employee” if the slip appears to be accurate.
5th Step: T4 Summary Submission to Canada Revenue Agency (CRA)
You must first download a copy of the T4 slip to send it to CRA. After that, go to the Service Canada website and provide them with the information. This is how to go about it.
Part 1: Check and Submit the T4 Summary
- You have to choose the Employees option that is located on the left menu.
- Following this, You have to choose the Payroll Tax option.
- Next, You have to navigate to the section labeled “Forms” and opt for the Annual Forms option.
- Then, You have to choose the T4 slip (employer)
- Following this, You have to choose the period and hit the View button. This will open a new tab with the “T4 Summary.” You can print or save a copy for your records if necessary.
- You have to return to the QuickBooks Online that was opened in the previous tab
- Press the “Submit” button after that. The T4 slips will now begin to output in XML format. Furthermore, it immediately establishes a record-keeping archive in QuickBooks Online.
Part 2: Give CRA the T4 Summary
- Visit the “Service Canada” website now.
- Select “Internet file transmission” by clicking. You can only now choose this option.
- After reading the “Disclaimer,” press the “I agree” button.
- Add “Account Number” after. Make sure the account number is entered without any spaces.
- Afterward, key in the “Web Access Code.” It ought to come from the CRA.
- Then you have to click on the “Next” button.
- To locate your T4 file in XML format, use the “Browse” option. Once you’ve located it, upload the file to the website by clicking the “Upload” button.
- Finally, You have to click on “Submit“.
Note: The T4 summary is also included in the T4 file in XML format. Consequently, you are not required to upload the T4 summary individually to the website of the Canada Revenue Agency (CRA).
What are Some of the Important Points You Have to Consider?
- If you wish to submit the T4 forms to the CRA website instead of using the XML file (generated by QuickBooks Online), you must include the printed T4 slips for your employees. A T4 summary should be included as well.
- Moreover, before the end of February throughout the tax year, the T4 summary must be sent to the CRA. You can be subject to fines if you fail to meet the deadlines.
How Can You EFILE T4 from QuickBooks Online?
You may quickly and easily file T4 forms by utilizing the EFILE capability. However, you must keep in mind that the online filing process is not automated; you must finish the process on the CRA website.
You must be familiar with the prerequisites before beginning the T4 online filing process. You can start the primary procedure as soon as you have met the conditions.
Requirements for Filing the T4 Forms
You can visit the CRA website for further information if you do not already have this magnetic media transmitter number.
Web Access Code (WAC)
Make sure that you have WAC for the employer if you wish to file a T4 slip. On the modified T4 summary, this WAC is located above the Business Number (BN).
In case you need support, you should visit the CRA assistance page to complete the T4 slips and summaries.
EFILE-ing the T4 Slips
- Open the T4 slips in your return.
- Select “File” from the drop-down menu in the top toolbar.
- Now select “Properties” from the menu.
- Set your “T4 Status” to “Ready to File” in this field.
- Using the “EFILE” dropdown option in the toolbar, select “T5013 Return” or “Transmit Federal Slips.“
- Click on the “T4” option when you get the “Transmit” box.
- To select the appropriate data type, click the “Data Type” drop-down.
- Press “OK” to confirm. A green check mark means the XML file has been correctly produced, and you can now submit it to the CRA.
- Select “OK” from the menu. By doing this, the CRA will be redirected to the web browser.
The article highlights how you can prepare and file T4 slips in QuickBooks Online. You also get to learn about the points you have to consider, examining employee data, forwarding T4 slips, T4 submission, and more.
However, if you have any issues understanding the steps, then it is wise if you take the help of a professional expert. He or she will guide you on how to go about the steps.
Looking for a professional expert to get the right assistance for your problems? Here, we have a team of professional and experienced team members to fix your technical, functional, data transfer, installation, update, upgrade, or data migrations errors. We are here at Dancing Numbers available to assist you with all your queries. To fix these queries you can get in touch with us via a toll-free number
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Frequently Asked Questions (Faqs)
What are the Types of Income that has to be Reported on T4 Slips?
The types of income that should be reported on T4 slips are:
• All additional payments you provided to workers throughout the year, including salaries, wages (including money in lieu of termination notice), bonuses, tips or gratuities, employment commissions, vacation pay, and the gross and insurable earnings of self-employed fishers
• Payable compensation or allowances
• Retirement stipends
• Taxes you withheld during the year
• Employees with pension adjustment amount under a registered pension plan (RPP) or deferred profit sharing plan (DPSP) who accrued benefits during the year
What are the types of Income that should not be Reported on T4 Slips?
The types of income that should not be reported on T4 slips are:
• Pensions, one-time payments, annuities, or other sources of income (includes payments made to an unincorporated business’s owner or partners).
• Payments made to a non-resident for services done in Canada, excluding director fees, commissions, and other types of employment-related payments.
• The sums stated in a retirement compensation agreement.
• Amounts paid to subcontractors for products and services provided in conjunction with building projects when that project is your company’s main source of revenue.