By OptiVal Editorial Desk

T4 Summary Filing in Canada: How to Reconcile and File It Right

Most owners think the T4 slips are the job. They are only half of it. T4 summary filing in Canada is the step that ties every slip together and proves to the CRA that what you reported matches what you actually remitted during the year. Get the summary wrong and the CRA finds the gap for you, usually months later, with a review notice attached. Here is what the summary does, how to reconcile it, and the deadlines that make February a bad month to improvise.

What T4 summary filing in Canada actually does

A T4 Summary is one form per payroll program account. It totals everything on your T4 slips for the year: employment income, employee and employer Canada Pension Plan contributions, employee and employer Employment Insurance premiums, and income tax deducted. The slips are the detail. The summary is the control total.

During the year you sent the CRA money with every pay run. The summary compares the total deductions your slips say you should have remitted against the total the CRA says it received. If they agree, the year closes quietly. If they do not, the difference shows as an overpayment or a balance due, and you need an explanation ready. Run two payroll accounts and you file two separate returns, each with its own summary. Our guide to T4 and T5 slips in Canada covers the slips themselves.

The deadline, and the two early deadlines owners miss

The T4 return, slips plus summary, is due on or before the last day of February following the calendar year. For the 2026 tax year, February 28, 2027 falls on a Sunday, so a return received or postmarked on the next business day counts as on time. Your real deadline is Monday, March 1, 2027. Employees must have their T4 slips by the same date. (Source: CRA, When to file information returns.)

Two situations pull that deadline forward, and both catch owners off guard:

• Your business stops operating. The return is due within 30 days of the day the business stops operating, not the following February.
• A partner or the sole proprietor dies. The return is due within 90 days of the date of death.

An employee leaving does not change anything. The deadline stays in February, although giving a departing employee their year-to-date numbers when they leave saves everyone a phone call later.

How to reconcile the summary in five checks

Reconciliation is the real work. Do these five checks before filing:

1. Total the slips yourself. Add up employment income, CPP, EI and tax across every slip. Do not trust the software total until a second report agrees with it.
2. Compare deductions to remittances. Pull your CRA payroll account statement and compare the total received against the total deductions reported. The CRA generally does not charge or refund a difference of $2 or less. Anything bigger needs a reason.
3. Check CPP and EI against the formulas. Most mismatches come from staff who hit the annual maximum mid-year, staff who turned 18 or 70, and manual cheques that bypassed the payroll system. Our explainer on CPP and EI deductions in Canada covers the current rates and maximums.
4. Account for every pay, including the awkward ones. Bonuses paid by e-transfer, vacation payouts, taxable benefits added in December, and owner salary all belong in the totals.
5. Explain any difference in writing. If you over-remitted, show the overpayment and tell the CRA whether to refund it or move it to another account or year. If you under-remitted, pay the balance due with the return and note why it happened.

Electronic filing is no longer optional for most employers

Since January 1, 2024, any business filing more than five information returns of one type in a year must file electronically. Six T4 slips means electronic filing, full stop. The old threshold of 50 slips is gone, and many small employers still have not absorbed the change.

Your options are CRA Web Forms, which handles up to 100 slips and calculates the summary totals for you, Internet file transfer for larger XML files, or filing through My Business Account or Represent a Client. Filing on paper when electronic filing was required carries its own penalty, separate from any late penalty: $125 for 6 to 50 returns, rising to $2,500 for the largest filers.

If a bookkeeper or payroll service files for you, the responsibility does not move with the work. You stay responsible for accuracy, any balance owing, and filing on time. Ask for the confirmation number and keep it.

What late or wrong filing costs

Late T4 filing penalties run per slip, per day, under the CRA relieving policy for small businesses:

• 1 to 5 slips: $100 flat penalty
• 6 to 10 slips: $5 per day, to a maximum of $500
• 11 to 50 slips: $10 per day, to a maximum of $1,000
• 51 to 500 slips: $15 per day, to a maximum of $1,500
• 501 to 2,500 slips: $25 per day, to a maximum of $2,500
• 2,501 to 10,000 slips: $50 per day, to a maximum of $5,000
• 10,001 or more slips: $75 per day, to a maximum of $7,500

For a small team the dollars look modest. The bigger cost is attention: a late or mismatched return invites closer questions, and payroll questions tend to lead to others. Our breakdown of payroll penalties in Canada covers the separate, steeper bill for late remittances during the year.

PIER reviews: the letter that follows a sloppy summary

Every year the CRA runs a pensionable and insurable earnings review, called a PIER. It recalculates the CPP and EI that should have applied to the earnings on your slips and compares them with what you reported. Come up short and you get a deficiency to pay, employer and employee shares both. Most deficiencies trace back to simple things: a taxable benefit treated the wrong way, pensionable earnings entered incorrectly, or an exemption applied to the wrong employee. The five checks above catch nearly all of them in January, when fixing them is free.

A January routine that makes February boring

Owners who file calmly reconcile in January, not February. Close December payroll, run the five checks in the first two weeks of January, fix CPP and EI gaps while you can still adjust, confirm every employee address and social insurance number, then file by mid-February and hand out slips the same week. Keep the return and your records for six years. If your books and payroll drifted apart this year, that gap will show up in the summary whether you look or not. Better that you find it first.

Led by qualified professionals with more than 75 years of combined experience, our team handles payroll and year-end filing for Canadian businesses every week. Payroll starts at $29 per employee per month plus a $149 setup, and bookkeeping plans start at $199 per month, with T4 slips and the T4 Summary included in the year-end work. See our pricing or book a free consultation and we will get your 2026 payroll reconciled well before March 1.