If you're a payer in Canada, there's one form you definitely need to get familiar with: the T4A slip. It's the official document used to report certain types of income to the Canada Revenue Agency (CRA). While it might seem like a small piece of paperwork, getting it wrong can lead to penalties you’d rather avoid.

Don't worry, though—we've got you covered! In this guide, we’ll walk you through everything you need to know about T4A slips, from when to issue them, how to distribute them, how to file your return, and the consequences of messing up.

What exactly is a T4A slip?  

Think of the T4A slip as the CRA's way of keeping track of a variety of income types—like self-employed commissions, pensions, annuities, lump-sum payments, and even RESP educational assistance. If you’ve paid someone during the year, there's a good chance you'll need to issue one of these.

But not everything needs to be reported on a T4A slip. For example, payments for goods and services from government agencies or crown corporations go on a T1204 slip, not a T4A.

You can easily grab the T4A form in PDF or fillable format from the CRA's website. It’s free and simple to download!

When do you need to issue a T4A slip?  

You’re required to issue a T4A slip if:

• You deducted tax from any payments made to a recipient.

• You paid over $500 to any recipient during the calendar year.

There are exceptions, though—certain payments like RESP contributions or TFSA withdrawals don't need a T4A unless they meet specific conditions (for example, RESP payments over $50).

The deadline to issue your T4A slips to recipients is February 28 of the year following the one in which the payments were made. So, mark your calendars!

How to file your T4A information return  

If you have more than five slips of the same type, you must file your T4A return electronically. The CRA offers two options for electronic filing: web forms (perfect for up to 100 slips) and internet file transfer (ideal for larger files).

Even if you’re filing less than five slips, the CRA strongly encourages electronic filing—it helps avoid delays and makes the process smoother for everyone.

Make sure you file a return for each payroll account you have.

Remember, the summary is applicable only for paper filing. If you file manually, ensure that the T4A slips accompany the summary form. Submitting a summary without the slips will result in the CRA considering the return incomplete, requiring you to refile everything. For electronic filings, the slips are submitted directly through web forms or internet file transfer, and the summary requirement is not applicable in the same way.

The deadline for filing your T4A return is also February 28, the year after the payments were made.

How do you distribute T4A slips?  

Distributing T4A slips doesn’t have to be a hassle. You can choose between electronic or paper methods.

• Electronically: You can send them through a secure portal, and if you’re emailing them, make sure you get consent from the recipient first. The great thing about electronic distribution is that you don’t have to worry about postage, and it’s eco-friendly, too!

• Paper copies: If you’re mailing them, be sure to send two copies to the recipient. Keep a note of any undeliverable slips and keep them on file. If you know an address is incorrect, don’t send the slip. Instead, make a note of your actions to correct the address and store that information with the slip.

What happens if you file late or incorrectly?  

Filing T4A slips late or incorrectly can lead to penalties, and trust us, you don’t want that.

• Late filing: If you miss the deadline, you could be hit with a penalty of $25 per day per slip, with a minimum of $100 and a maximum of $2,500.

• Incorrect filing format: If you're supposed to file electronically but submit paper forms instead, penalties will apply. For example, filing six T4A-NR slips and six T4 slips physically when you should have filed them electronically could lead to penalties of $125 per type of slip.

If you’re found trying to avoid reporting payments (like conspiring with subcontractors), the CRA acts seriously—you could face criminal prosecution and hefty fines, up to 200% of the tax you tried to evade.

 Here are few things to keep in mind while filling T4A slips as a payer 

Handling T4A forms the right way ensures you stay compliant with CRA rules and helps streamline the tax reporting process. Here are some best practices to keep things running smoothly.

Know the T4A requirements  

T4A forms are used to report different types of income that aren’t considered regular employment income. These can include pensions, annuities, self-employment income, and fees for services. As a payer, you’re responsible for issuing these forms by the end of February each year. Missing this deadline could lead to penalties, so be sure to plan ahead.

Double-check all information  

Accuracy is key when completing T4A forms. Double-check every detail, from the payer's legal name to the recipient’s SIN. Small mistakes can lead to big complications, so taking the time to review all information before submitting the forms is a smart move.

Leverage technology  

Using accounting software can make preparing and submitting T4A forms much easier. These tools help you manage records, reduce human error, and ensure everything is filed on time. With automated features, you can avoid mistakes and streamline the entire process.

Track payment thresholds  

If you’ve paid someone more than $500 during the year, a T4A slip is required. Make sure to keep accurate records of payments so you can easily determine if a T4A form is necessary. Tracking payments carefully helps you stay organized and compliant with CRA rules.

Understand and report income types correctly  

It’s essential to report each type of income accurately. Whether it’s a pension, annuity, self-employment income, or fees for services, you need to make sure each category is recorded in the correct box. Misreporting income can lead to tax discrepancies, so always refer to the CRA’s guidelines to ensure proper reporting.

Communicate clearly with recipients  

Communication is key! Let recipients know when to expect their T4A forms and make sure they have your correct contact information for any follow-up questions. Clear communication can prevent misunderstandings and help keep everything running smoothly.

By understanding the requirements for T4A slips and following these best practices, you can streamline your tax reporting process and ensure compliance with CRA regulations.