Filing the T4 form can be beneficial as it helps an employer report income of their employees paid through the previous calendar year. However, preparing these forms manually can be a hectic task. Hence, we bring you the following guide where you can learn how to do T4 in QuickBooks Online in an easy way.
If you are willing to create a T4 slip for each of your employees and share it with the Canada Revenue Agency (CRA), we will teach you the whole procedure. Let’s get started.
- What Are T4 Forms or Slips?
- How to File T4 in QuickBooks?
- Step 1: Review the Company Information
- Step 2: Review the Employee Information
- Step 3: Prepare Your T4 Slips
- Step 4: Send T4 Slips to Employees
- Step 5: Submit T4 Summary to the Canada Revenue Agency (CRA)
- Types of Income You Can Report on T4 Slips
- Types of Income You Cannot Report on T4 Slips
- How to EFILE T4 from QuickBooks Online?
What Are T4 Forms or Slips?
T4 slips are the annual forms that can be used to report wages and taxes of the employees paid through the previous calendar year. It contains income of employees including bonuses, salary, commissions, vacation and sick pay, the value of taxable benefits, taxable allowances income taxes, etc.
By filing this T4 slip at the end of the year, you can report all the income that has been paid to the employees. The process of T4 filing in QuickBooks Online does not end here; you need to submit this form to the Canada Revenue Agency (CRA).
When Should T4 Slips be Issued?
When your business made deductions on behalf of the employee. The deduction can include the following:
- Canada Pension Plan (CPP) contributions
- Québec Pension Plan (QPP) contributions
- Provincial Parental Insurance Plan (PPIP) premiums
- Employment Insurance (EI) premiums
- or, income tax
- When you paid your employees at least $500
If you meet these two conditions then you are required to prepare T4 slips for your employees. Remember that you should provide these slips to employees for each territory or province they have worked in for the company.
How to File T4 in QuickBooks?
You are required to review your company and employee information. Then, create a T4 slip and send it to your employees using a convenient way. After creating the slip, make sure you submit it to the Canada Revenue Agency (CRA) to complete the process. Here is how:
Step 1: Review the Company Information
- Click on the “Settings” icon.
- Then, go to the “Payroll Settings” option.
- In the “Preferences” page, click on “Federal Taxes”.
- Now, go to the “Company Federal Tax Information” page and enter the following:
- CRA Payroll Number
- T4 Transmitter Number
- Select the “OK” button.
Step 2: Review the Employee Information
- Click on the “Employees”.
- Choose the “Employee”.
- Click on the “Edit” button to add the following information:
- Employee benefit information
- Employee data
- Payroll deductions
- Click the “Done” button.
Step 3: Prepare Your T4 Slips
- Click on the “Taxes” option.
- Then click on “Payroll Tax”.
- Go to the “Forms” section and choose the “Annual Forms” option.
- Hit the “T4 Slip (employer) option.
- Choose the tax year for which you prefer to view your T4 slip.
- Click the “View” button in order to open and check your slips in Adobe Acrobat.
Ensure that the information you are adding is correct. Thereafter, you can download and print the slips by clicking the icons available in Adobe Acrobat. Now, close the window.
Step 4: Send T4 Slips to Employees
As stated earlier, you need to provide these T4 slips to each of the employees by the end of February. These T4 slips can be shared in any of the following ways:
- Send one copy of the T4 slip electronically (by Workforce employee portal or email). This should be noted that it is important to have the consent of your employee (in written or electronic format) to send a T4 slip copy electronically.
- Two copies should be sent by email to the last known address of your employee.
- Two copies should be delivered in person.
Sending T4 Slip to the Employees with Workforce
In case you are planning to send the T4 slips to your employee with the most convenient option (Workforce Employee Portal) then you can follow this easy procedure in two parts:
Part 1: Invite the Employee to Workforce
- Click on the “Employees” option.
- Then, select your employee to whom you want to send the invitation.
- Click on the “Edit” button.
- Then, select the “Pay” tab.
- Mention the email address of your employee.
- Now mark the check for “Invite this employee to view their pay stubs online.
- Click the “Done” button.
Once you perform these steps, your employee will get an invitation. Right after your employees accept the invitation and sign into the Workforce, they can receive the T4 slip that you are about to send them.
Part 2: Send the T4 Slip to Your Employee
- Click on the “Taxes” option.
- Select the “Payroll Tax” option.
- Click on the “Annual Forms” option.
- From the “All Employees”, pick your employee to whom you want to send the T4 slip.
- Click on the “Employee copy of T4 slip”.
- Hit the “View” button. This will open another tab in a PDF version of your T4 slip.
- If you find the slip correct, hit the “Send to employee” option.
This way you can send the T4 slip to the considered employee. All you have to do is send an invitation and share the slip once the invitation is accepted by the employee. Besides that, you can choose other ways to send T4 slips such as email.
Step 5: Submit T4 Summary to the Canada Revenue Agency (CRA)
To share this T4 with CRA, first, you need to download a copy of the T4 slip. Thereafter, visit the Service Canada website to share the information with them. Here is how to do that.
Part 1: View and Submit the T4 Summary
- Click on the “Employees” option located on the left menu.
- Then, click on the “Payroll Tax” option.
- Go to the “Forms” section and click on the “Annual Forms” option.
- Now, choose the “T4 slip (employer)”.
- Here, select the time period and click the “View” button. This will open the “T4 Summary” in a new tab. If required then you can take a print or save a copy for your own records.
- Now, return to the “QuickBooks Online” in the previously opened tab.
- Then, hit the “Submit” button. This will start exporting the T4 slips in XML format. Also, it automatically creates an archive in your QuickBooks Online for your records.
- Now, browse the “Service Canada” website.
- Click on the “Internet file transfer”. This is the only option you can select at this time.
- Go through the “Disclaimer” and click the “I agree” button.
- Add the “Account Number”. Make sure you don’t add any spaces between the account number.
- Then, enter the “Web access code”. It should be provided by the CRA.
- Hit the “Next” button.
- Select the “Browse” option in order to locate your T4 file in XML format. Once found, click the “Upload” button to submit the file to the website.
- Now, “Submit” it.
Note: The T4 file in XML format also contains a T4 summary. Therefore, you don’t need to upload the T4 summary separately to Canada Revenue Agency (CRA) website. Also, it would be great if you note down the time and date of the form submission.
Important Points to Consider
- Instead of the XML file (created by QuickBooks Online), if you prefer to mail the T4 forms to the CRA website then you need to send the printed version of T4 slips for your employees. It should also include a T4 summary.
- Also, the T4 summary should be filed with the CRA by the end of February during the tax year. In case you miss out on the deadlines, you may be charged with penalties.
Do’s and Don’ts for Filing T4 Forms
There are several types of income that you can report in T4 forms. However, not each type of income should be reported in this form. If you are unsure what kind of income you should report, here are the few things that you keep into consideration.
Types of Income You Can Report on T4 Slips
- Wages, salary, gratuities, vacation, bonuses, pay, gross, employment commissions, the insurable income of self-employed fishers, and other remuneration that you have paid to the employees throughout the year.
- Retiring allowances.
- Taxable benefits
- Deductions that you kept throughout the year.
- Amount of pension adjustment for the employees who accumulated the benefit for the year under the Deferred Profit Sharing Plan (DPSP) and Registered Pension Plan (RPP).
Types of Income You Cannot Report on T4 Slips
- Annuities, lump-sum payments, pensions, or other income that may include the amount you paid to the partner of an unincorporated business or proprietor.
- Commissions, fees (other than director fees), or other amounts to the nonresident for services delivered in Canada.
- Amount from the retirement compensation agreement.
- The amount that was paid to the subcontractors for the goods and services delivered in connection with construction activities.
Important Note: You need to report the employee’s income on the T4 slip of the same year in which you paid them. For instance, if you are paying the employee in the month of January 2019 for the income they made in December 2018 then you need to report the income on the T4 slip for 2019.
How to EFILE T4 from QuickBooks Online?
By using the EFILE feature, you can file T4 forms in a fast and convenient way. But, you need to remember that the procedure of internet filing is not automatic; you need to complete the process on the CRA website.
To start with the procedure of T4 internet filing, you need to be aware of the requirements. Once you comply with the requirements, you can begin with the main procedure. Let’s know how to file T4 in QuickBooks Online.
Requirements to File T4 Forms
- Transmitter Number: In case you do not have this magnetic media transmitter number then you can go to the CRA website for more information.
- Web Access Code (WAC): Make sure you get WAC for the employer for whom you want to file a T4 slip. You can find this WAC above the Business Number (BN) on the customized T4 summary.
Note: For support, you can visit the CRA assistance page to complete your T4 slips and summaries.
EFILE Your T4 Slips
- Open your return that contains T4 slips.
- Then, go to the “File” drop-down menu located at the top toolbar.
- Now, click on the “Properties” option.
- Here, set your “T4 Status” as “Ready to File”.
- Choose the “T5013 return” or “Transmit Federal Slips” using the “EFILE” dropdown menu located in the toolbar.
- When you see the “Transmit” window, click on the “T4” option.
- Click on the “Data Type” drop-down to choose the applicable type of data.
- Hit the “OK” button. If you see a green check sign, it indicates that the XML file has been built successfully and now you can file to CRA.
- Click the “OK” button. This will open the web browser redirecting to the CRA.
Where the XML File is Saved?
When the XML is built, ProFile can save this file depending on the settings you have made. The file can be found in any of the following locations:
- Go to:
- Click “Options”.
- Click “T3/FX”.
- Select “XML directory”
You will find the file here in this XML directory. However, if you find the “XML directory” blank then the file is saved in the default directory for the FX files. To find this:
- Go to:
- Select “Environment”.
- Click on the “File”.
- Now, correct the “FX tax year”.
Once you perform these methods, ProFile will open the internet browser where you can continue following the process on the CRA website.
What If XML File Did Not Save Successfully?
There can be instances when XML did not build successfully. In case you find any sort of error, you need to perform the following corrections.
- Mention the “WAC” for your business.
- Now, browse the “FX directory” in order to add your “XML” file that you built.
Once done, you can finish each step in the web transmission process using the CRA website.
Important Note: Before closing the web browser, take a print of your confirmation number when you see the final page of CRA submission. This is because the Pro File does not keep any record of your submission.
This is helpful to report the income of your employees as you can keep a record of their wages and taxes. However, not every kind of income can be reported in T4 forms. Hence, to be precise, we have provided valid information regarding T4 slips.
In this guide, we have discussed how to file T4 in QuickBooks Online step by step. It also includes the whole procedure of T4 filing in QuickBooks Online using the EFILE feature and submitting it to the CRA website.
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