You’ve Heard of T4s… But What About T4As?

Most business owners know about T4 slips for employees. But T4As? That’s where things often get overlooked.

If you’re paying people by e-transfer, cheque, or direct deposit — and claiming those payments as a business expense — you may have a T4A filing requirement and not even realize it.

As we head into tax season, here’s what you need to know about T4A slips, who needs to issue them, and what happens if you don’t.

What Is a T4A?

A T4A (Statement of Pension, Retirement, Annuity, and Other Income) is an information slip filed with the Canada Revenue Agency (CRA) to report certain types of income — most commonly payments to independent contractors and service providers.

Unlike a T4 (which is for employees), a T4A is generally used when you pay someone who is not on payroll.

When Do You Need to Issue a T4A?

You may need to issue a T4A if your business paid:

• Independent contractors

• Freelancers

• Consultants

• Sole proprietors providing services

• Professionals (bookkeepers, marketers, IT consultants, etc.)

  
  

If you are deducting the payment as a business expense and the person is not an employee, that’s your first signal to ask: Do I need to issue a T4A?

In many cases, if total payments for services are $500 or more in the calendar year, a T4A is required. Even if no tax was withheld.

“But I Just Paid Them by E-Transfer…”

This is one of the most common misunderstandings.

It doesn’t matter if you paid by:

• E-transfer

• Cheque

• Cash

• Direct deposit

  
  

And it doesn’t matter that you recorded it properly in your accounting software.

A journal entry or bookkeeping record is not a substitute for filing a T4A.

The T4A is a formal information return. It must be:

1. Issued to the contractor

2. Filed with the CRA

The CRA uses this slip to match the income reported by the contractor on their personal tax return. If you deducted the expense but did not issue a required slip, it can create discrepancies.

When Is the Deadline?

T4A slips must be issued to recipients and filed with the CRA by the last day of February following the calendar year in which the payments were made.

If the deadline falls on a weekend, it moves to the next business day.

Both the contractor and the CRA must receive their copies by that date.

What Happens If You Don’t File?

Failing to issue required T4A slips can result in:

• Late-filing penalties starting at $100, increasing depending on the number of slips

• Additional penalties for incorrect or missing information

• Increased likelihood of CRA review

• Questions about whether expenses are properly supported

  
  

If you are claiming contractor expenses but not issuing required slips, that can raise red flags.

The Bottom Line

If you pay people who are not employees — and you claim those payments as business expenses — you should review whether T4As are required.

T4As are not just paperwork. They are a compliance requirement with the CRA, and ignoring them can cost you.

Getting organized early, tracking contractor totals throughout the year, and confirming filing requirements before February can save you penalties and stress.

If you’re unsure whether your business needs to issue T4As this year, it’s always better to check before the deadline than after it.