Operations
T4A vs T4: What's the Difference?
T4A vs T4: a plain-English guide for Canadian sole proprietors on who receives each slip, what gets withheld, and how to report T4A income on your T1 return.
T4A vs T4 comes down to the working relationship behind the payment. A T4 slip reports employment income paid to an employee, with CPP, EI and income tax typically withheld at source. A T4A slip reports pension, retirement, annuity and other income — a broad category that includes fees for services paid to an independent contractor or sole proprietor. If you run a sole proprietorship in Canada, you will usually receive T4A slips rather than T4s from the businesses that hire you, and you report that income on your T1 return.
What Is a T4 Slip?
A T4 slip (Statement of Remuneration Paid) is the slip an employer issues to an employee. It summarizes employment income along with the CPP contributions, EI premiums and income tax that the employer withheld and remitted to the CRA. It also shows details such as pensionable and insurable earnings and, where relevant, union dues. The employer files copies with the CRA and gives the employee their copy, typically by the end of February following the tax year — confirm the current deadline on the CRA website. Employees use the T4 to complete their T1 return. If you are unsure which slip applies to a worker, a contractor vs employee analysis is the starting point.
What Is a T4A Slip?
A T4A slip is the CRA's Statement of Pension, Retirement, Annuity, and Other Income. It is a catch-all slip that payers use for many kinds of payments that are not regular employment income, including:
- Fees for services paid to self-employed individuals, including sole proprietors
- Self-employed commissions
- Pension and superannuation income
- Certain lump-sum payments, benefits and other amounts
For a sole proprietor, the important point is that a T4A generally has no CPP contributions or EI premiums withheld, and in many cases no income tax withheld either. You remain responsible for accounting for that income — and any CPP contributions owing — when you file. How a specific box on your slip is treated is best confirmed on the CRA website.
T4 vs T4A at a Glance
| Feature | T4 slip | T4A slip |
|---|---|---|
| Who issues it | An employer with employees | Any payer making reportable non-employment payments |
| Who receives it | Employees | Contractors, sole proprietors, pensioners and others |
| Typical income reported | Salary, wages, bonuses | Fees for services, commissions, pension and other income |
| CPP and EI withheld | Typically yes | Generally no |
| Income tax withheld | Typically yes | Not always |
| Where the recipient reports it | T1 return, employment income lines | T1 return; self-employed income generally on form T2125 |
Why the Difference Matters to a Sole Proprietor
When you are paid as a contractor and receive a T4A, no one is withholding CPP on your behalf. You calculate CPP contributions on your net self-employment income when you file your T1 return, using the schedules included with the return. EI is different: self-employed individuals are generally not eligible for regular EI benefits unless they have registered for the optional self-employed EI program or qualify through other insurable employment — confirm the current rules with the CRA. This is one reason accurate invoicing and bookkeeping matter, because your own records, not a slip, often determine what you owe. See how to invoice as a sole proprietor and bookkeeping for sole proprietors.
How to Report T4A Income on Your Tax Return
Self-employed income reported on a T4A is generally entered on form T2125, Statement of Business or Professional Activities, which is filed with your T1 return. The steps are usually straightforward:
- Match each T4A slip to the payer and to the amount you invoiced.
- Enter the income on the correct line of your T2125, net of allowable business expenses.
- Keep the slip together with your supporting records.
- Check whether the income affects your GST/HST position and your CPP contributions.
Because a T4A does not always have tax deducted, you may need to set money aside through the year. If income is under-reported or a slip is missing, it is usually better to correct it before the CRA asks. See GST/HST invoicing requirements and business records retention for how long to keep the paperwork.
When a T4A or T4 Is Wrong
Slips contain errors: a wrong SIN, an amount that does not match your invoices, or the same payment reported twice. The first step is usually to contact the payer and ask for an amended slip, while keeping your copy of the original. If the payer will not correct it, you can generally still report the correct amount and explain the difference to the CRA, using your invoices and contracts as evidence. Businesses that need to amend their own slips can generally do so through CRA My Business Account, while individuals can review slips in CRA My Account.
Keeping Slips Straight
As of the current tax year, the practical rule of thumb has not changed: if you work as an employee, expect a T4; if you are an independent contractor or sole proprietor charging for your services, expect a T4A. Both slips feed the same T1 return, but they trigger different obligations around withholding, CPP, EI and GST/HST. Review your slips against your own records after the end of each tax year, store them with your bookkeeping files, and confirm current rates, thresholds and deadlines on the CRA website rather than relying on last year's numbers.
Frequently asked questions
What is the difference between a T4 and a T4A?
A T4 reports employment income paid to an employee and generally shows CPP, EI and income tax withheld at source. A T4A reports pension, retirement, annuity and other income, a category that includes fees for services paid to independent contractors and sole proprietors. The slips come from different payers, reflect different withholding, and may be reported on different lines of your T1 return.
Do sole proprietors receive T4A slips?
Often, yes. When a business or organization pays you fees for services as an unincorporated contractor, it may issue a T4A slip reporting the amount. Not every payer issues one, and you must still report the income even if no slip arrives. Keep your invoices and contracts so you can support the amounts you report on form T2125.
Is CPP or EI deducted from a T4A?
Generally no. CPP contributions and EI premiums are typically withheld from employment income reported on a T4, not from fees for services reported on a T4A. As a self-employed individual, you generally calculate CPP contributions on your net self-employment income when you file your T1 return. EI eligibility for self-employed people depends on specific rules and optional registration, so confirm the current details on the CRA website.
Do I need to report a T4A if I also have a T4?
Yes. Both slips report income that must be included on your T1 return. Employment income from a T4 goes on the employment income lines, while self-employed income from a T4A is generally reported on form T2125, Statement of Business or Professional Activities. Having a T4 does not exempt you from reporting contractor income, and it may affect how much CPP you owe once all income is combined.