Issuing T4 and RL-1 Slips

Issuing T4 and RL-1 Slips
Main keyword: issuing T4 and RL-1 slips
Secondary keywords: payroll slips Canada, T4 preparation rules, Quebec RL-1 requirements, CRA payroll year-end filing, employee tax slips Canada

Introduction
Understanding issuing T4 and RL-1 slips is essential for every employer in Canada. These slips summarize employment income, taxable benefits, and payroll deductions, and are used by employees to file their personal tax returns. Errors in T4 or RL-1 slips lead to CRA and Revenu Québec reassessments, payroll audits, penalties and employer liability. Whether your business has one employee or hundreds, you must issue slips correctly, reconciling all income with payroll records. Québec employers must prepare both T4 and RL-1 slips, making accuracy even more critical. This guide explains everything employers need to know about issuing T4 and RL-1 slips correctly and on time.

Legal and Regulatory Framework
Issuing T4 and RL-1 slips is governed by:

• the Income Tax Act
• the Canada Pension Plan Act
• the Employment Insurance Act
• Québec’s Taxation Act
• QPP, QPIP, CNESST and HSF rules
• CRA and Revenu Québec payroll regulations

Employers must issue:

• T4 slips to report federal employment income and deductions
• RL-1 slips to report Québec employment income and provincial payroll deductions

Both slips are mandatory when the employer paid:

• salary or wages
• bonuses
• commissions
• vacation pay
• taxable benefits
• allowances
• tips (controlled tips)
• retiring allowances
• stock option benefits

Understanding issuing T4 and RL-1 slips ensures complete payroll compliance.

What Must Be Reported on a T4 Slip?
A T4 slip includes:

• employment income
• CPP contributions
• EI premiums
• income tax withheld
• taxable benefits (automobile, insurance, gifts, allowances)
• pension adjustments
• union dues
• retiring allowances
• tips or gratuities (where applicable)

The T4 Summary must reconcile with CRA payroll remittances.

What Must Be Reported on an RL-1 Slip?
RL-1 slips report:

• Québec employment income
• QPP contributions
• QPIP premiums
• Québec income tax withheld
• CNESST amounts
• HSF contributions (if applicable)
• taxable benefits
• allowances and reimbursements

Québec employers must also file an RL-1 Summary with Revenu Québec.

Key Court Decisions
Courts have ruled consistently on issues involving issuing T4 and RL-1 slips:

• employers are liable for errors in slips, not employees
• post-year adjustments must be backed by documentation
• failing to include taxable benefits results in payroll penalties
• inaccurate slips delay employees’ refunds and raise audit flags
• CRA may assess employers for unreported income even if employees reported correct amounts
• Québec courts uphold strict RL-1 reporting for QPP, QPIP and CNESST

These rulings emphasize that issuing T4 and RL-1 slips must be accurate and timely.

Why CRA and Revenu Québec Audit Payroll Slips
Payroll slips are among the most audited items because:

• many employers miscalculate taxable benefits
• payroll deductions are sometimes remitted incorrectly
• discrepancies appear between T4/RL-1 and corporate tax returns
• year-end bonuses cause withholding errors
• employers misclassify employees as contractors
• taxable allowances are often omitted

Audit triggers include:

• missing T4 or RL-1 slips
• mismatched totals between payroll remittances and summaries
• high taxable benefits without supporting documentation
• repeated corrections for the same employees
• large discrepancies between CRA T4 totals and reported expenses
• RL-1 slips missing required reimbursements or allowances

Understanding issuing T4 and RL-1 slips helps prevent these issues.

Mackisen Strategy
Mackisen CPA provides complete and compliant support for issuing T4 and RL-1 slips:

• reconciling payroll records with CRA and Revenu Québec remittances
• reviewing all taxable benefits and allowances (cars, insurance, gifts, meals)
• calculating final annual amounts accurately
• preparing T4 and T4 Summary slips
• preparing RL-1 and RL-1 Summary slips
• correcting past slips (T4 Amendments, RL-1 Corrections)
• determining payroll implications for bonuses and commissions
• clarifying employee vs contractor classifications
• reviewing QPP, QPIP, EI, CPP and HSF accuracy
• optimizing payroll systems for next year

We also represent employers during CRA or Revenu Québec payroll audits involving T4/RL-1 discrepancies.

Real Client Experience
Many employers come to Mackisen after payroll slips were prepared incorrectly:

• A Montréal employer forgot to include taxable car benefits on RL-1 slips. Revenu Québec reassessed thousands in payroll liabilities. Mackisen corrected all slips and negotiated reductions.
• A consulting firm misreported bonuses on T4 slips, causing CRA to issue review letters. We corrected slips and updated payroll software.
• A retail business issued T4A instead of T4 to employees. CRA reclassified workers and assessed missed CPP/EI. Mackisen resolved the audit.
• A company withheld QPP instead of CPP for an Ontario employee. We corrected filings and prevented penalties.
• An employer misapplied taxable allowances, leading to discrepancies between remittances and summaries. We reconciled year-end payroll and fixed all errors.

These cases show the importance of precision when issuing T4 and RL-1 slips.

Common Questions
Employers frequently ask:

• When are T4 and RL-1 slips due?
By the last day of February.

• Do I issue a T4 or T4A to contractors?
T4A for contractors; T4 for employees.

• How do I report taxable benefits?
They must be included on both T4 and RL-1 slips.

• What if an employee leaves mid-year?
You still issue a slip for the months worked.

• Do Québec employers file both T4s and RL-1s?
Yes—Québec requires both.

• What happens if I file late?
CRA and Revenu Québec charge penalties per slip.

These questions help employers manage issuing T4 and RL-1 slips correctly.

Why Mackisen
With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they're entitled to. Whether you're issuing T4 or RL-1 slips for the first time or correcting multiple years of errors, our expert team ensures precision, transparency and protection from audit risk. When assisting clients with issuing T4 and RL-1 slips, Mackisen provides full preparation, reconciliation, correction, and audit-defense services.