T4 slip and T4 summary

The CRA says an employer must issue a T4 slip if any of its listed conditions apply, such as having deducted CPP/QPP, EI, PPIP or income tax from an employee’s pay. In a business sale they matter when staff move from one payroll to another, because someone has to report each employee’s pay for the year. Ask who will.

How the two forms fit together

The CRA says the T4 Summary represents the total of the information reported on all the T4 slips prepared for the calendar year, and that a separate summary is filled out for each payroll account. Its employers’ guide says to file the information return on or before the last day of February of the following calendar year (the next business day if that falls on a Saturday or Sunday), or within 30 days from the date the business ends, and that when an employee stops working it suggests calculating year-to-date earnings and giving the employee a T4 slip.

What to ask on a sale

• Which payroll account issued the T4 slips for the year of closing?
• Will the seller issue slips for pay before closing and the buyer for pay after?
• Do the totals on the summary agree with the slips?

See how to handle payroll on closing day and payroll account.