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Administrative Penalty for Late Filing T4s and T5s for Your Employees

T4, T5 and certain other slips must be distributed and filed, on or before the last day of February following the calendar year to which the slips apply.  If the last day of February falls on a Saturday or Sunday or public holiday, the tax slips and returns are considered on time if postmarked on the next business day.  There is a penalty for late filing information returns even though no taxes are owing. The amount of the daily penalty (to a maximum of 100 days) is based on the number of slips of a particular type that are late-filed.

Depending on the number of slips involved, employers can be penalized from $5 to $75 per day late, with a minimum penalty of $100 and a maximum penalty of $7,500.

For example, there is a $100 flat penalty when one to five slips of a certain type are filed late by a taxpayer. When six to 10 slips are filed late, the penalty is $5 per day, subject to a $100 minimum and a $500 maximum. But when more than 10 slips are filed late by a taxpayer, the penalty is equal to the legislated amount of $10 per day, subject to a $100 minimum and $1,000 maximum, increasing to $75 per day where over 10,000 slips are late filed. Generally, the CRA’s administrative policy is to charge the penalty in all cases, even for first-time late filers.

This link to CRA’s website summarizes the penalty for failure to file an information return by the due date: http://www.cra-arc.gc.ca/penaltyinformationreturns/

There are also penalties for failing to provide your SIN (social insurance number) or your BN (business number) or for failing to include the SIN or BN on an information slip you have prepared. Partnerships and tax shelters are also subject to penalties for failure to file the required information returns.

The employee should be provided 2 copies of the T4 or T5, preferably printed on one sheet (CRA Web Forms does this automatically).  This can be done by:

  • one copy sent electronically (for example, by email or secure employee portal) if you have the employee’s consent, in writing or in electronic format to send T4 slips electronically;
  • two copies delivered in person; or
  • two copies, sent by mail to the employee’s last known address.

 

NOTES

If T4 slips are returned as not deliverable, you may want to keep the copies with the employee’s file.

If you know the address you have for an employee is not correct, do not send the employee’s T4 slip copies to that address. Document why the copies were not sent and your efforts to get the correct address. Keep this information with the T4 slip copies in the employee’s file. You still have to include that T4 slip information in your T4 information return when you file it.

For more information on how to fill out the T4 slip and the T4 Summary, see Filling out the T4 slip and T4 Summary.

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