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T4 – Employment Income 

Learn how your T4 slip shows your income, taxes, and benefits, and how reviewing it with Optimize supports your financial plan

In Canada, the T4 slip is key for reporting employment income. It shows what you earned, the taxes paid, your benefits, and how your compensation was structured.

At Optimize, we use your T4 to support your financial strategy. This includes coordinating income sources, planning RRSP contributions, and preparing your tax return. Understanding your T4 helps you make informed choices about savings, benefits, and tax planning.

The Foundation of Employment Income Reporting

The T4, officially called the Statement of Remuneration Paid, is issued by employers each year to show how much income you earned and how much was deducted at source. If you worked for more than one employer in a given year, you will receive a separate T4 from each.

Your T4 includes:

  • Employment income: salaries, wages, bonuses, and commissions.

  • Tax withholdings: income tax, CPP contributions, and EI premiums.

  • Employer-provided benefits: including pension plan contributions and taxable perks.

  • Other income details: such as tips, retroactive pay, or allowances.

The T4 helps determine your total income and tax position when you file your T1 personal income tax return.

Tip: Keep copies of your T4 slips for at least six years. They may be needed for tax reassessments, future financial applications, or benefit eligibility verification.

Why the T4 Matters in Your Financial Plan

Even though the T4 is most commonly seen as a payroll document, it carries broader significance in your financial plan. The way your income is reported, taxed, and supplemented with benefits can influence several areas of planning.

Learn how to read a T4 form to better understand the details and terminology used throughout your return.

This matters when you are deciding whether to:

  • Maximize your RRSP contribution based on your earned income.

  • Adjust tax withholdings if you receive a large refund or owe tax.

  • Evaluate your compensation package in the context of total value, not just salary.

  • Plan for future contributions to CPP or private pension plans.

For example, if your T4 shows a lower tax withholding rate and you also have investment income, it may be beneficial to increase instalments to avoid a balance owing. Or if you receive a significant bonus, you may want to plan a strategic RRSP contribution to reduce your taxable income.

Important: If you change employers or work for multiple companies in a year, make sure to share all T4 slips with us. Missing even one can distort your tax outcome and trigger CRA notices or adjustments.

Learn How to Read a T4

Understanding your T4 is not just about your refund. It is about knowing how your income, taxes, and benefits are reported and how they affect your tax situation. Reading it carefully lets you verify income, check deductions, and spot errors that could impact your return.

At Optimize, we believe that reading your T4 empowers better planning. This article breaks down the key sections so you can approach tax season with clarity and confidence.

Identification and Basic Information

This section confirms your employment relationship and when the income was earned.

Employer’s name and address
Used by CRA to verify the source of your income.

Employee’s name and address
Confirms who earned the income and where the T4 will be matched on your return.

Tax year
Indicates the calendar year in which you earned the income reported on the slip.

Box 10 – Province of employment
Important for determining provincial taxes and programs.

Employment Income and Benefits

This section shows your total income from employment and any taxable benefits you received.

  • Box 14 – Employment income
    Your gross income from this job before deductions. Includes salary, wages, bonuses, and most taxable benefits.

  • Box 26 – CPP/QPP pensionable earnings
    The amount of your income that was subject to Canada or Quebec Pension Plan contributions.

  • Box 44 – Union dues
    If you pay union dues through payroll, the amount is reported here. Can be claimed as a deduction on your return.

  • Box 40 – Other taxable benefits
    The total of non-cash benefits such as employer-paid health plans, personal use of a company vehicle, or gifts over CRA thresholds.

Important: Benefits listed in Box 40 are included in your income even though you may not have received them in cash. They still increase your taxable income.

Income Tax and Statutory Deductions

These boxes show how much tax and social program contributions were deducted from your pay during the year.

  • Box 22 – Income tax deducted
    Federal and provincial tax your employer withheld and remitted on your behalf.

  • Box 16 – CPP contributions
    Amounts withheld for the Canada Pension Plan.

  • Box 18 – EI premiums
    Employment Insurance premiums deducted from your income.

  • Box 55 – PPIP premiums (Quebec only)
    If you worked in Quebec, this shows your contributions to the Quebec Parental Insurance Plan.

Additional Boxes You May See

Depending on your employment situation, you may see other boxes filled in as well.

  • Box 52 – Pension adjustment
    Reflects contributions to a registered pension plan or deferred profit-sharing plan. Used to calculate your RRSP room.

  • Box 38 – Security options benefits
    Taxable benefit from exercising stock options, usually with public companies.

  • Box 46 – Charitable donations
    Payroll deductions made for charitable giving through your employer.

Tip: Always compare the T4 you receive to your final pay stub for the year. Mistakes happen, and catching them early helps you avoid reassessments or delays in your return.