Commissioned salespeople are often used to mitigate costs and incentives sales within an organization. While considered self employed, if your organization utilizes commissioned salespeople, your organization should be completing a T4A for them.
A T4A slip is an information return that is required to be filed by your company if you paid out commissions, pensions, retirement allowances, annuities, scholarships, research grants, prizes, medical travel assistance or death benefits – to name a few examples. The slip may also be required to be completed by executors, trustees, liquidator, pension administrator or corporate directors.
Note old age security is reported by the government on the T4(OAS) and Canada Pension Plan payments are recorded on the T4A(P).
The T4A will include any deductions made for CPP/QPP contributions, EI premiums or income tax from the remuneration included on this slip.
The T4A should be completed based on the calendar year the payment was made – which may differ from when the services were provided and the corporation’s fiscal year. Oftentimes errors are made for when services are provided in late December and payment is made the following January – requiring the income to be included in the subsequent year T4A. This is different from accrual accounting used by corporations that may make deductions for when services were provided.
Owners of their own incorporated business who compensate themselves through commissions are also required to file T4As from their company to themselves.
The filing deadline for a T4A is due the last day of February following the year the payment was made. Late filing penalties depend on the number of slips that were filed late, with a minimum charge of $100 to a maximum of $7,500.
Contact Shajani CPA today to get your T slips filed.
This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2023 Shajani CPA.
Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning services.