Following are the most common questions asked about the T4 slip.
Continue reading for the answers to these questions.
T4 slip - NEW RULES went into effect January 2012 for boxes 24 and 26
I've been asked whether the same number in box 14 needs to be entered into box 24 (EI insurable earnings) and box 26 (CPP/QPP Pensionable earnings) or can they be left blank when preparing the T4 slip.
CRA introduced new rules for completing a T4 slip as a result of the changes to CPP. Boxes 24 and 26 must ALWAYS be completed now. Prior to 2012, it was acceptable and normal to have boxes 24 and 26 on the T4 slip blank when they matched box 14.
For each box, you need to enter the total amount up to the maximums for the year OR zero if exempt. IF there are no insurable and/or pensionable earnings, you need to enter "0" in the field.
Examples of amounts to exclude in Box 24 - EI insurable earnings, "do not include the unpaid portion of any earnings from insurable employment that you did not pay because of your bankruptcy, receivership, or non-payment of remuneration for which the employee has filed a complaint with the federal, provincial, or territorial labour authorities."
For more details on how to complete Box 24 - See Businesses> Payroll> Completing returns> T4> Completing the T4 slip> Box 24 EI insurable earnings.
Box 26 Examples - CPP pensionable earnings, "If you provide pensionable taxable benefits (non-cash) and no other remuneration is paid in a tax year (for example, an employee is on an unpaid leave of absence and the employer continues to provide benefits during the leave), enter "0" in box 26. For security option benefits, report the amount of the benefit in box 26 at all times. Do not code the slip CPP-exempt in box 28, since the employee may want to elect to pay CPP on the amount."
See the next question for excluded amounts for CPP purposes.
The CRA website details the types of box 14 employment income that must be subtracted and not included in box 26. In many cases, box 14 and 26 will be the same.
See Businesses> Payroll> Completing returns> T4> Completing the T4 slip> Box 26 CPP pensionable earnings for more details.
As a general rule, if you are overriding any calculations in your tax program ... you are doing it wrong.
Tax software has generally paid computer programmers to code in all the tax rules. When an override is necessary ... the deduction is usually optional or an advanced tax calculation.
Box 24 represents the amount of insurable earnings subject to the maximum limit used to calculate the employee's EI premiums. This means it is box 14 less any earnings that are not subject to EI premiums. (See above for exclusion examples.)
There is no age limit to deducting EI premiums. However, the following employment is not insurable:
Box 26 represents
the pensionable earnings subject to the maximum limit. This means it is
box 14 less any earnings that are not subject to CPP contributions.
So what are some of the exceptions? Some examples for CPP contributions when the income is not pensionable are:
For most people, boxes 24 and 26 will match box 14. Prior to 2012, if the amounts did matched box 14, they were generally left blank. That is no longer an acceptable practice due to the changes in CPP that came into effect in 2012.
I believe box 14 should be blank if there is an employment code in box 29 of :
11 - Placement or employment agency workers
12 - Taxi-drivers or drivers of other passenger-carrying vehicles
13 - Barbers or hairdressers
17 - Fishers - Self-employed
These tax individuals are special situations with separate rules. Check out CRA's site at Businesses> Payroll> Completing Returns> T4> Special situations.
You should see your gross earnings listed under other information with the appropriate code for your industry. These industries get to claim additional deductions if they received Form T2200 Declaration of Conditions of Employment from their employer.
Your best bet is to contact your employer and/or payroll department and ask them how it was calculated. It is likely the amount is from a taxable benefit you received from your employer.