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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-ups and potentially costly back-dated CPP and EI assessments. 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, salary and overtime pay
• Commissions paid to employees
• Bonuses, vacation pay and tips/gratuities
• Taxable benefits (such as company car allowances or group life insurance)
• Deductions withheld at source: CPP/CPP2 contributions, EI premiums and income tax

Rule of thumb: If you withhold payroll deductions from someone’s pay, they must receive 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 for services exceed $500 in the calendar year (before taxes)
• 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

Misclassifying workers and issuing the wrong slip

Issuing a T4A to a worker whom the CRA deems an employee does not protect you from liability. If the CRA reclassifies a contractor as an employee during an audit, you may be held liable for both the employer and employee portions of un-remitted CPP and EI, plus any interest and penalties incurred.

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

Smaller payments added up across multiple invoices over twelve months frequently get overlooked. If a contractor’s cumulative payments pass $500 in a calendar year, 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 tax year. Late filings trigger automatic CRA penalties based on the number of slips filed late.

Confusing Box 048 with Box 028

Some businesses mistakenly report service fees under Box 028 (Other income). The CRA specifically designates Box 048 for service fees. While the CRA currently waives financial penalties for Box 048 errors if you make a reasonable effort, using Box 048 consistently ensures clean, audit-ready records.

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 guidelines (a contract of service).

Step 2: Gather payroll data for the year

Pull together total employment income paid, taxable benefits provided, and all statutory source deductions withheld (CPP/CPP2, EI, and income tax).

Step 3: Complete the slip

Enter the employee’s Social Insurance Number (SIN), legal name and address, your CRA payroll account number, and the relevant box amounts:

Box 14: Employment income

Box 16 & 16A: CPP and CPP2 contributions deducted

Box 18: EI premiums deducted

Box 22: Income tax deducted

Box 45: Employer-offered dental benefits code (mandatory for CRA reporting)

Step 4: Distribute to employees

Provide each employee with their copy by the last day of February following the calendar tax year.

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

Submit all T4 slips and your T4 Summary to the CRA by the last day of February. Note: If you are filing 6 or more slips, the CRA mandates electronic submission (via CRA Web Forms or Internet File Transfer) to avoid late/paper filing penalties.

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

Gather each contractor’s Social Insurance Number (SIN) for individuals/sole proprietors, or their Business Number (BN / GST/HST registration number) for incorporated businesses and partnerships.

Hero tip: Collecting a completed vendor onboarding form and direct deposit profile before making the first payout prevents administrative delays during year-end tax reporting.

Step 3: Calculate the reportable amount

Calculate total fees paid to each contractor during the calendar year, strictly excluding sales taxes (GST/HST).

Step 4: Complete the slip

Enter the contractor’s name, address, SIN or Business Number, your payroll account number, and the relevant payment amounts. 

Example: 

Box 048: Fees for services (independent contractors, freelancers, consultants)

Step 5: Distribute to contractors

Deliver a copy to each contractor 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 (electronically if filing 6 or more total slips).

Recordkeeping and filing readiness

Strong records make slip season far less painful. The CRA requires businesses to maintain books and records for at least six years from the end of the relevant tax year.

What to keep on file:

• A copy of every issued T4 and T4A slip (and associated Summary forms)
• Supporting payroll registers, pay stubs, and tax remittance reports
• Detailed contractor invoices showing fee breakdowns separate from sales taxes
• Proof of payment (bank statements, electronic funds transfer confirmations)
• Signed contractor agreements, and worker status documentation

Hero tip: Track contractor payments continuously through the year rather than scrambling at year-end. If you track payments in real time, you won’t need to chase down a contractor’s SIN or invoice records in late February.

Make payroll and contractor admin less of a headache

T4s go to employees (including CPP, EI, and income tax withholdings). T4As go to independent contractors paid over $500 for services (excluding sales taxes). Both are due to recipients and the CRA by the last day of February.

The key to seamless year-end reporting isn’t just knowing which slip to issue—it’s maintaining real-time compliance records and collecting worker details upfront. Build that automation into your operations now, and tax season becomes a routine task rather than a year-end scramble.

Ready to take the manual effort out of contractor payments for good? 

91±¬ÁÏ automatically tracks worker compliance, manages contractor payouts and keeps your business audit-ready and T4A-compliant all year long.