The T4 slip, officially known as the Statement of Remuneration Paid, is a crucial tax document provided by employers to their employees in Canada. It summarizes your employment income and deductions for the tax year and is essential for preparing your income tax return. Among the many boxes on the T4 slip, Box 14, Box 22, and Box 40 hold particular importance as they relate directly to your income and deductions. This detailed guide will help you understand what these boxes represent, how the amounts are calculated, and how to correctly report them on your tax return.
What Is the T4 Slip?
The T4 slip reports your total employment income and the amounts your employer withheld for taxes, Canada Pension Plan (CPP), Employment Insurance (EI), and other deductions. It is issued annually and must be included when filing your personal income tax return (T1).
Box 14 – Employment Income
Box 14 is one of the most important boxes on your T4 slip. It shows your total employment income before deductions for the tax year.
What Is Included in Box 14?
- Your gross salary or wages
- Bonuses, commissions, and tips
- Taxable benefits, such as the value of a company car or group insurance premiums paid by your employer
- Other taxable allowances and reimbursements
What Is Not Included in Box 14?
- Non-taxable benefits such as certain employer-paid medical expenses
- Income from self-employment or other non-employment sources
How to Use Box 14 on Your Tax Return
Report the amount shown in Box 14 on line 10100 of your T1 General tax return. This figure forms the basis of your employment income and is subject to income tax.
Box 22 – Income Tax Deducted
Box 22 shows the total amount of federal and provincial income tax your employer deducted from your pay and remitted to the Canada Revenue Agency (CRA) during the year.
Why Is Box 22 Important?
- It represents the tax prepayment you have already made through payroll deductions.
- This amount is credited against your total tax owing for the year.
- If Box 22 shows more tax deducted than you owe, you will receive a refund.
- If less tax was deducted, you will have a balance owing.
How to Use Box 22 on Your Tax Return
Enter the amount from Box 22 on line 43700 (total income tax deducted) of your T1 General tax return. This helps calculate your final tax balance.
Box 40 – Canada Pension Plan (CPP) Contributions
Box 40 indicates the total amount of CPP contributions your employer deducted from your employment income during the tax year.
How CPP Contributions Work
- CPP contributions are mandatory for most employees aged 18 to 70 who earn more than the minimum threshold.
- Both the employee and employer contribute equal amounts; Box 40 reflects only the employee’s portion.
- The contribution amount is based on your pensionable earnings, which is your income between the basic exemption amount and the yearly maximum pensionable earnings.
- Contributions are used to provide you with benefits such as retirement pensions, disability benefits, and survivor benefits.
Using Box 40 When Filing Taxes
Report the amount shown in Box 40 on line 30800 of your T1 return. This amount is used to calculate your CPP contributions and any refunds due if you contributed more than required across multiple employers.
Common Questions About Boxes 14, 22, and 40
Q: What if the amounts on my T4 slip seem incorrect?
If you believe any amounts, including Box 14, 22, or 40, are incorrect, contact your employer immediately to request a corrected T4 slip. Do not alter the amounts yourself.
Q: Can Box 22 be zero?
Yes, if you earned income but had no income tax deducted (for example, if your total income was below the taxable threshold), Box 22 may show zero.
Q: What if I had multiple employers?
You will receive a T4 slip from each employer. You must total amounts from all slips for Box 14, 22, and 40 when reporting on your tax return.
Q: How do CPP contributions affect my taxes?
CPP contributions reduce your net income but are not refundable beyond a possible over-contribution refund if you worked for multiple employers. They also entitle you to CPP benefits upon retirement or disability.
Tips for Reviewing Your T4 Slip
- Verify that your name, Social Insurance Number (SIN), and employer details are correct.
- Check that amounts in Box 14, 22, and 40 align with your pay stubs and employment records.
- Keep your T4 slips with your tax records for at least six years in case CRA requests them.
- Use CRA’s Auto-fill My Return service when filing electronically to reduce errors.
Conclusion
Boxes 14, 22, and 40 on your T4 slip are critical for accurately reporting your employment income and payroll deductions when filing your Canadian tax return. Understanding what these boxes represent helps you verify your slip, correctly report income and taxes withheld, and ensure compliance with CRA rules. Always review your T4 slips carefully, keep them safe, and consult a tax professional if you have questions or discrepancies.
