The government, through its “P.I.E.R.” program, audits the correctness of the T4 filings. If you have made a mistake, they will be after you for amounts owing. You will be stuck with having to pay any employee and employer portions. The trick is to apply the same tests to your payroll records that the government does before you issue the T4s.
- CPP TEST: (Gross earnings – $3,500) times .0495 Maximum gross earnings are $54,900
- EI TEST: Gross earnings times .0188 Maximum gross earnings are $50,800
The amount that you enter in the CPP box on the T4 must be greater than or equal to the test amount. The maximum CPP for the year is $2,544.30.
The amount that you enter in the EI box must be greater than or equal to the test amount. The maximum EI for the year is $955.04.
Don’t forget to include in gross earnings any taxable benefits such as MSP premiums, life insurance premiums, personal automobile use plus imputed HST, and interest on employee loans.
If you maintain your records on “Simply Accounting”, the payroll data can be exported to a spreadsheet, wherein the above tests can be programmed and, thus, automated.
Remember to consider whether you need to be issuing any T4As or T5s as well.
We are now filing T slips electronically on behalf of some clients and would be pleased to be of assistance in doing yours.