Year-End Adjustments for Canadian Payroll

March 16, 2015 Marlo Hertling

Your tax slips are filed and you’re all done with them for the year right? Not so fast.

Year-End Adjustments for Canadian Payroll

If your Canadian Payroll solution has correct and complete pay detail for your employees, you are right. However, sometimes there are issues that arise over which you didn’t have control and you may need to go back and visit your year-end tax slips.

Here are some examples...

Just when it's time to start celebrating and you don’t have to think about tax slips again for another year, an employee calls to say they washed their copy and need a new one. Or maybe Finance paid monies out to an employee that they forgot to tell you about so it wasn’t recorded in Payroll during the year and the employee’s T4 needs to be adjusted right away.

Year-End Adjustments

There are four possible year-end adjustments that can occur after you have completed your tax slips:

  1. Amend Tax Slips
  2. Add a Tax Slip
  3. Cancel a Tax Slip
  4. Replace a Tax Slip

Here are a few considerations for each of these scenarios if you filed your tax slips over the internet.

1. Amend Tax Slips

If after filing your information return, you notice an error to any information already submitted on a tax slip you need to prepare an amended slip to correct the information.

CRA
To amend a slip over the Internet, change only the information that is incorrect and retain all of the remaining information that was originally submitted. Use summary report type code “A” and slip report type code “A”.

Special Considerations

It is important to note that if you receive a pensionable and insurable earnings review (PIER) report, you do not remit amended slips. You are required to respond to the PIER advising of the changes required for the employees on the listing. For more information, go to Pensionable and Insurable Earnings Review (PIER).

If you are amending a T4 slip, you may need to recalculate a pension adjustment. For information, go to Recalculating a pension adjustment (PA).

Revenu Québec
If you use your Canadian Payroll software to create amended RL slips, you must create a new electronic file and correct the data. Your software must allow you to enter revised amounts in the appropriate boxes while retaining the amounts that need not change. It must also allow you to enter the letter “A” in the box marked “Code du relevé” and the note “Modifié” (amended) so that the individual or beneficiary knows that this RL slip is amending a previously received RL slip.

2. Add a Tax Slip

If after filing your information return, you notice you missed creating and submitting a tax slip.

CRA

After you file your information return, you may discover that you need to send additional slips. If you have original slips that were not filed with your return, you will be required to file them separately.

Special Consideration

Any additional T4 slips which are filed after the due date may result in a penalty.

Revenu Québec

Does not directly address this on their website, please contact Revenu Québec directly to inquire.

3. Cancel a Tax Slip

If you issued a tax slip in error.

CRA

To cancel a tax slip, do not change any information that was contained on the original slip. Use summary report type code "A" and slip report type code "C".

Special Consideration

If you amend or cancel slips using the Internet, CRA may contact you to find out why.

Revenu Québec

Cancelled RL slips must be used to cancel valid RL slips that eithers should never have been transmitted or were transmitted with identification errors. When you file a cancelled RL slip, you must enter the number of the original RL slip to be cancelled (or the most recently filed RL slip to be cancelled) in the new electronic file and on the amended RL slip to be sent to the individual or beneficiary. The RL slip must be clearly marked “Annulé” (cancelled) and the letter “D” must be indicated in the box marked “Code du relevé” so that the individual or beneficiary knows not to use this data. Do not use a new sequential number.

Special Consideration

If an RL slip was issued with an incorrect first or last name or social insurance number, two RL slips must be filed: a cancelled RL slip and a new RL slip that contains the right name and social insurance number.

Replace a Tax Slip

If you need to provide employees with replacement tax slips.

CRA

If an employee loses or destroys his or her copy of an RL-1 slip that has already been submitted, do not file a new slip. Give the employee a photocopy of the copy you kept for your files, clearly marked “Duplicate”.

Revenu Québec

If an employee loses or destroys his or her copy of an RL-1 slip that has already been submitted, do not file a new slip. Give the employee a photocopy of the copy you kept for your files, clearly marked “Duplicate”. Make sure the number appearing in the upper right-hand corner of the slip is legible on the photocopy.

Special Consideration

If you use electronic methods to provide tax slips to your employees , they will be able to re-print their own replacement slips anytime which can result in significant time savings for your Payroll and HR departments. (See my recent blog post on electronic tax slips)

Canada Revenue Agency and Revenu Québec Resources

Here are some great resources and I recommend that you bookmark them, as you never know when you might need to reference them.

Federal Tax Slips

Revenue Québec Tax Slips

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About the Author

Marlo Hertling

Marlo Hertling has worked with leading HCM organizations and has been helping Canadian companies implement HCM solutions for more than 15 years. She is the Vice President of People & Culture at Avanti Software Inc and serves as Avanti's HCM subject matter expert.

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