Like all Canadian tax slips beginning with “T4”, a T4A reports income you earned.
It’s something like a catch-all slip for income that isn’t reported on other kinds of slips, so it’s easier to list what the T4A does NOT report.
A T4A does NOT report income that:
- you earned from a regular job where they withhold tax, CPP and EI
- you earned from investments
- pertains to royalties
- is actually GST/HST charged on top of your fees
So that mostly leaves income from odd jobs, or from freelancing or self-employment.
Income on a T4A is almost never taxed at source, meaning you’re responsible for setting aside some of it for income tax. We find most of our self-employed clients end up owing 12-20% of their gross income in tax, so we recommend setting aside about 15% as a starting point.
And of course if you’re registered to charge GST/HST, that money doesn’t count as your income and isn’t reported on the T4A. You still have to set it aside so you can remit it to the government.
Information overload: Other kinds of income slips include the T3 (for trust and/or investment income), the T5 (for income from investments, interest, and/or royalties), T4E (employment insurance income), and of course the famous T4, which reports income earned at a job where you’re an employee and subject to CPP, EI, and usually tax withholding.
Should I T4 or T4A the owner of a corporation in Alberta, he is over 65 and does not pay E.I. or CPP
hi,
if I get a t4a , do i get ROE and EI ?
Thanks
David
No, you don’t get an ROE (Record of Employment) because you’re not considered to be an ’employee’ when you are paid via a T4A. You don’t typically get EI either, unless you have entered into a special agreement with Service Canada to pay into EI for self-employed people.
Hi David. No, you don’t get an ROE or EI. The “E” in both those acronyms stands for Employment (Record of Employment, Employment Insurance). ‘Employment’ has a very specific meaning to the government. It means a person who is salaried, working as a part of the entity that pays him or her. T4As reflect income you earn as an independent vendor, more likely to issue invoices than to receive a salary. Essentially, a T4A reflecting income from services you’ve performed indicates that you’re self-employed, not an employee. Only employees get ROEs or EI.
Is the T4A paid from when you made the money ( date of service) or when you were paid?
sorry T4A isn’t paid – I meant indicative of payment from when you made or when you were paid
Hi Barb, you beat me to it! I was going to start out all pedantic. T4A slips are issued by the payer, and are supposed to reflect when the recipient received the money. This is because T4As are linked to a given calendar year, and have to be declared and taxed with that year’s return. If the T4A could be dated in the year in which you made the money, instead of when you actually received it, you could end up having to declare (and be taxed on) income you haven’t even received yet.
I am retired for a few years now. This T4 slip was issued by Atomy’ Skincare that I signed up and over the years received points and earned commissions for $136.00
But somehow my net amount shown on line 13900 is a lot higher than my gross amount!
Is there anyway I could correct this? Thanks!
Hi Lily. The first thing to do is to look at the slip itself (not your income tax return) and see if the amounts shown there match your records. Remember that in some cases a payer may include non-cash amounts in your slip income. For example, they may supply you with product and consider the value of the product to be part of your taxable gross. But if the slip shows the wrong amount, you need to have the issuer (Atomy Skincare) fix it at their end and issue an amended slip. Once a new slip has been issued, you can amend/refile your tax return using the new figure.
t4a is income or not
t4a income increase
Yes, amounts on a T4A are income.
Hello,
So if i im a contractor and i hiring someone to do a paint job in my house and is 5000 i need to do a t4a or is okay if i do a invoice only ?
Hi Aaron. The answer is specific to your industry. From CRA:
“[You do not have to report on a T4A] Payments made by individuals, partnerships, trusts, or corporations with construction as their main business activity to subcontractors for construction services. Instead, fill out the Form T5018, Statement of Contract Payments.”
Do I get money back from t4a when income tax was deducted
Hi Stein. It is very rare (though not unheard-of) for tax to be withheld on a T4A. Usually tax is only withheld on T4 slips. As for whether you get money back, it depends.
Payers who withhold tax for you must send it to the government, where it is held in your account on your behalf. The amounts withheld are essentially estimated amounts of tax owing, but can’t be exact because there are many factors that contribute to how much you owe — marital status, dependents, RRSPs, medical expenses and so on — that the payer has no knowledge of.
When you finally file your taxes for a given year, preparing your income tax return serves to calculate your actual tax burden, or what we call your tax liability. The amount of tax you owe in a given year is then compared to the amount that has been held aside for you. If the amount withheld exceeds your tax liability, you get a refund of the excess. If the amount withheld is less than your tax liability, you must pay the shortfall.
Question, as a non profit we usually hire seasonal workers. Do we issue a T4 or T4A? and if its a T4A which box would we enter the amount in?
That is a deceptively simple question that’s difficult question to answer without knowing specifics. In general terms, it depends on whether the worker — seasonal or not — is more like a vendor/contractor or more like an employee. And that is a question of fact, i.e. it’s based many related factors to come up with a determination.
The main factors have to do with whether a person is paid for hours or for results; whether they could conceivably outsource their own job; how much control they have over when, where and how they work; how much financial risk they take on; whether they use their own tools; and even how integrated they are into the company culture. Each of these questions has an employee answer, and a contractor answer, and you take the balance of all your answers to come up with the conclusion.
I really recommend you check out CRA’s publication on the question of employee vs self-employed contractor.
If you do conclude the workers are contractors and you issue a T4A, enter the amount in box 048: Fees for Services.
Hi, I am a bookkeeper for a non-profit organization. I was requested to issue an honorarium of $120 to an individual who provided volunteer time. Is it required for me to issue this person a T4A slip?
Thank you,
Hi Helene. No, you don’t have to issue a T4A slip. The amount is irregular and presumably a one-time thing, so don’t bother with the slip.
Hi, I am an IT professional working as contractor and I am incorporated. I issue monthly invoices to my client and they wire money to my corporate account. They issued a T4A slip for my corporation end of the year. I am not sure whether I should claim that income in my personal tax return or corporation tax.
I appreciate if you can advise!
If you’re issuing invoices via your corporation and being paid to your corporation, that should be on your corporate return. On the T4A, the payer should show your business number rather than your social insurance number (SIN). If they’re showing your SIN, there’s a conflict; the slip would be seen as personal (assigned to your personal return). Get them to fix that.
BTW be aware that CRA will most likely consider you to be a personal services business (PSB) – see my video here here.
I am doing merchandisng work (ie) Product audits, installations of displays for a company who has never asked for my SIN # and pays me by paper cheque. Should I expect a T4A for this company?
Unlikely. The T4A is supposed to include a SIN. If they’re just paying your invoice and not requiring the SIN you’re being treated as a vendor and you just have to report your revenue according to your own records on your Form T2125 Statement of Business or Professional Income.
Do you/can you pay CPP contributions on bursary money reported in box 105 of T4A (that is not taxable income)? (I’d like to pay in, if possible)
No. Income from grants isn’t pensionable, because it’s not considered to be part of what’s called ‘earned income’, i.e., income paid by someone in exchange for works. Bursaries are more like grants, not a payment for service. And income that isn’t pensionable doesn’t trigger CPP payments. However, other work-for-money — salaried jobs, self-employment etc — will trigger CPP. Have no fear: as soon as you’re working for money, you’ll be paying into CPP.
Hi there, so what form should I use if I am trying report earnings from a regular job where they withhold tax, CPP and EI?
Regular salaried jobs with EI and CPP deductions are reported on T4 slips, rather than T4A slips. Just to be clear: it is the employer who completes these slips, not the employee. The employee (or their tax preparer) takes the slip(s) and enters the relevant data into their tax return, otherwise known as the T1 Individual Tax and Benefit Return.
Hi I work for a non profit and received a t4a with an amount in box 48. Is this an amount I’m going to have to pay?
No. Box 48 is the amount of fees you were paid for your services. That is reported as part of your income, and your total income (minus some credits etc calculated elsewhere) is the amount used to calculate your income tax.
Hello I am an artist who received a grant to create a show with 4 other people. In the grant we had some money for our set and costumes. One of the group has a non profit theatre company and he put in a few thousand dollars to increase our budget for the set and costume build. Does he need to give me T4A for this amount? Also can you clarify where on a T4A royalties are placed, or is there another slip for royalties?
Hi Tim. He probably doesn’t need to issue a T4A, particularly since he wasn’t paying a person for services. He should probably receive a receipt from the production, however. When royalties are reflected in a slip, sometimes they can be on a T4A in box 28 – Other amounts. But more often they’re reported on a T5 in box 17 – Royalties, or with no slip at all.
I am a full time student and met help from the Alberta government and when tax season tried this year they sent me a T4A. I filled out the taxes myself and entered the same amount written on the T4A, but when I finished, there was a question: Do you confirm that your income is zero? I answered yes. I received the notice of assessment this week, but I was surprised that the amount that was in T4A was not included. Is this normal or is there mistake?
If the amount on the T4A is in box 105 and was a scholarship or bursary relating to full time education, it’s non-taxable. If you used software it may have interpreted the slip as such, particularly if you also filed a T2202 Education Amounts slip in the same year. However if that’s not what the T4A was for, then you’ll need to adjust the return and make sure that the amount is reported — and taxed — properly.
Hi,
I received a T4A with amount of $98 in box 119. Is this Taxable?
Thanks,
Box 119 is for premiums paid to a group term insurance plan. This is considered a taxable benefit, which is to say it’s a part of compensation, though it’s not paid to you in cash. It must be reported on your tax return and it may trigger tax.
Hi! I recieve an Emmergin Leaders in the Americas Program scolarship to attend to the USask for 4 months. I went to Canada with a work visa for 3 months. I worked here as a teaching assitant. The ELAP scolarship rules says that the scolarship is non-taxable for the university or the student but I receive a T4A and I had to pay some tuition and fees and I’m enroled in a full time program. Can you help me with that? I’m so worried because I do not understand if I need to do a tax return and if is possible the scolarship come back taxable. I’m in Argentina now. Thank you!
Hi Debora, scholarships reported in box 105 of a T4A are nontaxable if they’re related to full-time studies. USask should issue a T2202 Education Amounts slip to you (you may have to download it from your online account). It should show the number of months you were considered to be full time, and the tuition amounts that trigger credits on your Canadian return. You probably aren’t earning enough taxable income to actually owe any tax, in which case you don’t have a legal obligation to file a return unless Canada Revenue Agency (CRA) asks for one. However, if your income is low OR if you plan to stay and work in Canada after you graduate, you may choose to file a return, as low-income earners tend to get refundable credits, i.e., money back, and education credits can reduce tax in future years if you earn enough to to taxable at that time.
I also received a T4A as an honorarium for being the president of a non profit organization. Can I put deduct some of my expenses on my income tax and How?
You can report the income as part of your gross revenue on Form T2125 Statement of Business or Professional Income, and deduct expenses there.
Iam on ei right now and I have a 3000 dollar and the guy told me he will give me a t4a should I report to ei or no?
We’re tax experts, not EI experts. Refer to the rules about what needs to be reported when you’re on EI and follow the guidance there. Sorry I can’t help!
I am a part-time artist (singing, musical theatre, etc.) and the theatre companies and community organizations that pay me will send me a yearly T4a. However, there are usually expenses involved with my gigs (rentals, paying other musicians, travel, etc.). How do I ensure I am not getting taxed on the full amount listed on my T4a slips but on the net amount?
Simple: by completing form T2125 Statement of Business or Professional Income to report the gross and deduct the business expenses. The net profit calculated on that form will then be reported on line 13500 of your income tax return, and that amount, not the gross, will be taxed. If you don’t know how to complete T2125, get in touch with Personal Tax Advisors: it’s our specialty.
Hi, I am a small business owner and I have a business incorporated. I received the T4A from the employer.The T4A is issued on my business name and number. I have filed my corporate tax using T4A and deducted expenses I have incurred for the year. For may personal tax, can I deduct CPP and EI? If so how do I do?
If you’re paying yourself a salary from your corporation, you can pay into CPP but not EI. On your personal tax return, you’ll report the T4 and all the deductions shown there just like any other employment income. Your total CPP and EI (if any) will be calculated on your personal return and any amounts paid in via your various income sources will be taken into account.
I was already deducted the tax , CPP , EI .. from my employer for my commission .. but then they’ve added a t4 a .. which means I would be paying double the tax ?? What do it do ..
I’m not sure what you mean. Your employer withheld tax, CPP and EI, and sent it to the Canada Revenue Agency on your behalf. They issue you a T4 slip that reports to you (and to the Canada Revenue Agency) the amounts that were set aside on your behalf. When you file your income tax return, you effectively calculate the proper amounts of tax, EI and CPP that you should be paying, and report the T4 with shows what already has been paid. If the amounts already paid exceed the amounts you owe, you’ll get a refund.
Hello, I am a musician, non-incorporated (not a business). I have a band (4 members), I ‘m the band leader and the one that invoices our clients for performances done. In 90% of the bookings I receive a cheque or direct deposit for the entire amount of what was invoiced for the performance. I then pay my band mates via e-transfer for their share of the gig revenue (split evenly). I’m guessing I have to report the gross income but where should I report the payment expense to the band members such that it will be discounted at 100% by the CRA? Thank you for your help.
Declare the full amount you received from the bookings as part of your gross business income. Then deduct what you pay back out to your bandmates as part of your Salary/Wages expense on your profit/loss statement (T2125). Say you bill $1,000 and split it four ways. You’ll declare an income of $1,000, minus a Salaries/Wages expense of $750. Net profit is $250, and that’s what you get taxed on.
I received my T4A for a gig job I did. However the earnings shown is including the deduction made. For e.g. if I earned $2000 then the agency would deduct 10% and pay me $1800. How do I show this 10% deduction while filing my tax returns?
Hi John. You declare the full amount of the T4A as part of your gross self-employment income, then deduct the agency fees (as well as their GST/HST, don’t forget!) as a Management Expense. So your gross would show $2,000, minus a Management Expense of $200, for a net (taxable) profit of $1,800.
hi there i have a question regarding t4as being issued by a tax exempt (status) organization for respite & support worker invoices. Are they issued to status employees or non status employees?
I’m afraid that’s a question you’ll have to ask the Canada Revenue Agency.
I recieved a t4a for my job (substitute teacher) Does T4A income factor in to my rrsp contribution.
Yes. it’s part of earned income (i.e., income that you earn from your own work, as opposed to, say, investment income) so it will increase your RRSP limit, at 18% of your net earnings up to the annual maximum.