T4A Slips in Canada: When Do You Actually Need to Issue One?
- Lisa Marshall
- Feb 27
- 3 min read
Updated: 4 days ago
T4A season causes a surprising amount of confusion for business owners. Do you need to issue one? Who qualifies? What about HST? What if you forgot?
Let’s break it down clearly.
What Is a T4A?
A T4A slip (Statement of Pension, Retirement, Annuity and Other Income) is used to report certain types of income paid to individuals, most commonly payments to independent contractors.
It tells the CRA:
Who you paid
How much you paid them
The type of income
It is not used for employees, that’s what T4 slips are for.
When Do You Need to Issue a T4A?
You generally issue a T4A when:
You paid an individual (not a corporation) for services
The total paid during the calendar year was $500 or more
Common examples:
Consultants
Freelancers
Bookkeepers
Designers
Marketing contractors
Self-employed professionals
The key test:👉 Are they an individual providing services, not on payroll?
When Do You NOT Issue a T4A?
You typically do not issue a T4A when:
You paid a corporation
The vendor charged you GST/HST through a corporation
You purchased goods (not services)
You paid rent to a corporation
The total paid was under $500
If the invoice says “Inc.” or “Ltd.” and you’re paying a registered corporation — generally no T4A is required.
Do T4As Include HST?
No.
You report only the service amount, excluding HST.
Example:Invoice total: $1,130Service: $1,000HST: $130
The T4A reports: $1,000
Important: Employee vs Contractor
Be careful not to confuse T4A reporting with payroll.
If someone:
Works set hours
Uses your equipment
Is supervised like staff
Doesn’t invoice you
They may be an employee, and should be on payroll with T4'ss instead.
Misclassifying workers can lead to penalties from CRA.
Deadlines
T4A's must be:
Filed with CRA by February 28
Provided to the contractor by February 28
This is based on the calendar year (January 1 – December 31) and when the subcontractor is paid (not when they issue invoices)
For example: if a contractor issues an invoice in December but you don't pay them until January, the expense will be included on the January calendar year and not December.
Penalties for Not Filing
CRA can impose penalties for:
Late filing
Failure to file
Incorrect information
Penalties increase the longer the delay.
Is a T4A Actually Mandatory?
CRA guidance says:
If you pay fees or other amounts for services (Box 048) totaling $500 or more in a calendar year, you must complete a T4A slip.
That language appears mandatory.
However…
Where the Grey Area Comes From
The Income Tax Act does not explicitly state that all service payments to independent contractors must be reported.
The requirement comes from CRA administrative policy and information return rules — not from a specific section of the Act that says:
“All businesses must issue T4A's to independent contractors.”
That’s why some professionals argue:
It is a CRA administrative expectation
It is not always strictly enforced
Many businesses historically did not issue them
CRA’s systems do not automatically flag every non-issued slip
Common Mistakes We See
Issuing T4A's to corporations unnecessarily
Including HST in the reported amount
Forgetting to collect the contractor’s legal name and SIN
Assuming “everyone gets one”
Filing late because bookkeeping wasn’t up to date
Practical Tip for Business Owners
If you work with contractors:
Collect their full legal name
Confirm if they are incorporated
Keep invoices properly coded
Review totals in January — not February 27th
Final Thought
T4A's are straightforward, but only if your records are clean and your contractor relationships are correctly classified.
If you're unsure whether someone should be receiving a T4A, it’s better to review it before filing season rather than correcting it afterward. For more information from the CRA site directly, please click the link below.
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