A T4 reports employment income and the CPP, EI and tax withheld from an employee. A T4A reports other income such as fees to contractors, pension income, or certain benefits, and generally has no CPP or EI. The one you issue depends on whether the person is an employee.
A T4 is the slip for an employee. It reports their employment income for the calendar year plus the amounts you withheld: income tax, CPP contributions and EI premiums. The employer's matched CPP and EI do not appear as the employee's deduction but are remitted alongside.
If someone is genuinely your employee, working under your direction, using your tools, on your schedule, they get a T4. This is the slip that ties to your payroll account and its remittances.
A T4A reports income that is not employment income. It covers a range of payments, including fees or other amounts for services from someone who is not your employee, pension and annuity income, retiring allowances, and certain scholarships and benefits.
The defining feature is that a T4A for contractor fees generally carries no CPP or EI, because a genuine contractor is responsible for their own contributions. It reports the amount paid, not amounts withheld from a payroll relationship.
The choice between T4 and T4A is really the choice between employee and contractor, and the CRA cares intensely about it. Treating an employee as a contractor avoids employer CPP and EI, payroll remittances and the associated costs, which is exactly why the CRA scrutinises it.
If the CRA re-characterises a contractor as an employee, the payer can be assessed for the unremitted CPP and EI, both the employee and employer portions, plus penalties and interest. The label on the invoice does not decide it; the real nature of the working relationship does.
The CRA weighs several factors, none decisive on its own:
A worker who sets their own hours, uses their own tools, works for multiple clients and can profit or lose looks like a contractor. One embedded in your operations under your direction looks like an employee, whatever the contract says.
Both slips are due to the recipient and the CRA by the last day of February following the calendar year. If you pay contractors, keep clear records supporting the contractor characterisation, because that documentation is your defence if the relationship is ever questioned.
Some payers over-issue T4As out of caution; others miss them entirely. Getting the slips right, and the underlying classification defensible, avoids both the penalty for missing slips and the far larger cost of a re-characterisation.
Primary sources
Reviewed for the 2025 tax year by Udit Gupta, Certified Tax Accountant. General information, not advice for your specific situation — book a free 15-minute call to discuss your circumstances.
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For the 2025 tax year the filing and payment deadline is 30 April 2026. If you or your spouse carried on a business, the return itself is due 15 June 2026, but any balance owing is still due 30 April 2026. Interest runs on unpaid amounts after the payment deadline, and a late-filed return with a balance owing also attracts a late-filing penalty. Filing on time keeps benefit and credit payments flowing.
A tax deduction is an amount subtracted from your income before tax is worked out, so it reduces the income being taxed rather than the tax bill directly. Its worth depends on your marginal rate: the higher the rate, the more the deduction saves. Common examples are RRSP contributions, child care costs, union dues, moving expenses and business expenses. Credits work the other way, reducing the tax calculated on that income.
For 2025 returns filed in 2026, most online returns are processed in about two weeks, and a non-resident return can take up to sixteen weeks. A paper return runs on a considerably longer standard because it is handled manually. Those timeframes assume a complete return that is not pulled for review. Register direct deposit and track progress in CRA My Account rather than waiting on a posted cheque.
Medical costs give a non-refundable credit rather than a deduction. Eligible items include prescription drugs, dental work, eyeglasses and contact lenses, fees paid to medical practitioners authorised to practise, private health plan premiums, attendant care and travel for treatment unavailable locally. Over-the-counter products and most cosmetic procedures do not qualify. Only the portion above an income-based threshold counts, the claim period may end at any point in the tax year rather than following the calendar year, and pooling the family claim on one spouse usually helps.
The Canada Child Benefit is a tax-free monthly payment, and the amount depends on how many children you have, their ages, and your family adjusted net income from the previous tax year. Maximum amounts are set each July and are reduced as family income rises, so two households with the same number of children can receive very different deposits. Check your own entitlement in CRA My Account or with the CRA child and family benefits calculator.
Most returns are transmitted electronically, so nothing is mailed and no receipts are sent in. Keep your slips and receipts for six years from the end of the last tax year they relate to, and send them only if the CRA asks. If you file on paper, the return goes to the tax centre for your province of residence, listed on the CRA's page for mailing a paper return. Documents the CRA requests can be uploaded through My Account.
Often, yes. A first return has no filing history behind it, so the CRA may verify your identity, address and date of birth before assessing it, and setting up direct deposit for the first time adds a step. Once assessed, timing matches any other return: about two weeks for one filed online. Opening My Account and registering direct deposit before you file removes most of the delay.
You can, but only with proof. A child care expense claim needs a receipt from the provider showing their name, address, the amount paid and the period covered, and where the provider is an individual, their social insurance number. Cash is not the problem; an undocumented payment is, because the CRA routinely asks for receipts and denies the claim when none exist. Ask for a written receipt each time you pay and keep it for six years after the end of the tax year it relates to.
Reviewed and fact-checked by Udit Gupta
Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. Big 4 trained at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia, he founded his accounting practice in 2014 to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
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