Managing payroll in Canada requires understanding and handling several important documents correctly. Whether you run a small business or a larger organization, accurate payroll documentation protects you and your employees while ensuring compliance with Canada Revenue Agency (CRA) rules.
This guide breaks down the most important Canadian payroll documents, explains when and how to issue them, and highlights common errors to avoid. We focus on clarity and practicality to help you manage payroll documentation confidently and stay compliant.
What Are Canadian Payroll Documents?
Canadian payroll documents are official forms and records that track employee earnings, deductions, and employment status for tax and government reporting. These documents include slips, statements, and records required by the CRA and provincial authorities.
These documents serve several purposes:
- Report income and deductionsto the CRA
- Inform employees about their earnings and deductions
- Support claims for Employment Insurance(EI) and other benefits
- Facilitate record keeping and audits
Understanding which Canadian payroll documents to prepare, how to complete them, and when to issue them is fundamental for all Canadian employers.
Key Canadian Payroll Documents Explained
1. T4 Slip (Statement of Remuneration Paid)
What is a T4?
The T4 slip is one of the most common Canadian payroll documents. It summarizes an employee’s total earnings and deductions for the calendar year. Employers must issue a T4 to each employee who received remuneration during the year.
The T4 reports amounts such as:
- Employment income
- CPP contributions
- EI premiums
- Income tax deducted
The CRA uses T4 slips to match reported employee income with tax returns.
When and How to Issue a T4
Employers must issue T4 slips by the last day of February following the calendar year end. T4 slips can be issued electronically or on paper. Employers also must file a T4 Summary with the CRA, summarizing all T4 slips issued.
Common Mistakes to Avoid with T4s
- Missing the deadline for issuing T4 slips or filing with CRA
- Incorrect employee Social Insurance Numbers (SINs)
- Misreporting taxable benefits or deductions
- Forgetting to include all required amounts or boxes on the slip
- Not keeping copies of issued slips and related records
Proper preparation and verification can prevent penalties and delays.
2. Record of Employment (ROE)
What is an ROE?
The Record of Employment (ROE) is a critical Canadian payroll document used when an employee stops working. It reports the employee’s work history, insurable earnings, and hours. The ROE allows Service Canada to determine the employee’s eligibility and benefit amounts for Employment Insurance (EI).
When and How to Issue an ROE
An ROE must be issued within five calendar days after the employee’s last day of work or the date the employer becomes aware that the employee has experienced an interruption of earnings.
Employers can issue ROEs electronically via the ROE Web service or on paper. The document includes important details such as:
- Reason for issuing the ROE (e.g., layoff, quit, dismissal)
- Total insurable hours and earnings
- Start and end dates of employment
Failure to issue ROEs promptly can delay EI benefits and result in compliance issues.
Common Mistakes to Avoid with ROEs
- Issuing ROEs late or not at all
- Entering incorrect employment or earnings information
- Using the wrong interruption code for the reason the employee left
- Failing to submit ROEs electronically when required
- Not providing a copy to the employee
Keeping detailed payroll records helps ensure accurate and timely ROE completion.
3. T4A Slip (Statement of Pension, Retirement, Annuity, and Other Income)
What is a T4A?
The T4A slip reports payments other than regular employment income. It is issued to contractors, pensioners, and others who receive payments such as:
- Self-employed commissions
- Pension or superannuation payments
- Other income like research grants or scholarships
When and How to Issue a T4A
T4A slips are due to recipients and the CRA by the last day of February after the tax year. Like the T4, these can be filed electronically or on paper.
Common Mistakes to Avoid with T4As
- Issuing a T4 instead of a T4A for contract payments
- Omitting payments that should be reported on T4As
- Incorrect recipient information
- Missing deadlines or not filing electronically when required
Employers and payers must carefully assess which payments require a T4A slip.
4. T2200 (Declaration of Conditions of Employment)
What is a T2200?
The T2200 is a form completed by an employer certifying that certain conditions of employment require the employee to incur expenses. It allows employees to claim work-related expenses on their personal tax returns.
When and How to Issue a T2200
Employers complete the T2200 at the employee’s request. It is not filed with the CRA but kept by the employee as proof for claiming deductions.
Common Mistakes to Avoid with T2200
- Not providing the form when requested
- Failing to accurately describe the conditions of employment
- Issuing T2200 forms too late in the tax season
Employers should keep records of T2200 requests and responses.
5. TD1 Forms (Personal Tax Credits Return)
What is a TD1?
The TD1 form is completed by employees to claim personal tax credits used by employers to calculate income tax deductions. There are federal and provincial versions.
When and How to Issue a TD1
Employers provide the TD1 forms to new employees or when employees request a change. Employees complete and return the forms, and employers use them to calculate payroll deductions.
Common Mistakes to Avoid with TD1 Forms
- Using outdated TD1 forms
- Not updating payroll deductions when employees submit new forms
- Failing to keep copies on file
Regularly check for updated TD1 forms published by CRA and provinces.
6. T5018 (Statement of Contract Payments)
What is a T5018?
The T5018 slip reports payments made to subcontractors, primarily in the construction industry. It is required for contractors to report payments to the CRA.
When and How to Issue a T5018
T5018 slips must be issued to subcontractors and filed with the CRA within 6 months after the end of the reporting period (calendar year or fiscal period) chosen by the payer. Filing electronically is mandatory for many filers.
Common Mistakes to Avoid with T5018
- Not issuing T5018 slips to subcontractors
- Reporting incorrect payment amounts
- Late filings or missing deadlines
Construction businesses should have systems in place to track and report contract payments accurately.
7. Pay Stubs (Earnings Statements)
What is a Pay Stub?
A pay stub details an employee’s earnings, deductions, and net pay for a pay period. Although not a CRA form, providing pay stubs is a legal requirement in many provinces.
When and How to Issue Pay Stubs
Pay stubs are provided with each paycheck or electronic payment. They should clearly list:
- Gross pay
- Deductions (taxes, CPP, EI, benefits)
- Net pay
- Pay period dates
Common Mistakes to Avoid with Pay Stubs
- Providing incomplete or unclear information
- Omitting required deduction details
- Failing to provide pay stubs on time
Pay stubs help employees understand their pay and deductions, building trust and reducing disputes.
When to Issue Canadian Payroll Documents: A Summary
| Document | When to Issue | How to Issue | Purpose |
| T4 Slip | By the last day of February after the tax year | Paper or electronic | Report employment income |
| ROE | Within 5 days after the employee leaves | Electronic (ROE Web) or paper | EI eligibility |
| T4A Slip | By the last day of February after the tax year | Paper or electronic | Report other income |
| T2200 | Upon employee request | Paper (kept by employee) | Certify employment expenses |
| TD1 Forms | At hire or when the employee updates their info | Paper | Calculate tax deductions |
| T5018 Slip | Within 6 months after the end of the reporting period | Paper or electronic | Report subcontractor income |
| Pay Stub | With every paycheck | Paper or electronic | Show pay and deductions |
Common Payroll Document Mistakes to Avoid
Incomplete or Incorrect Employee Information
Wrong SINs, names, or addresses can delay processing and trigger penalties. Always verify employee details at onboarding.
Missing Deadlines
CRA imposes fines for late filing or issuing of slips. Set reminders for key dates.
Mixing Up Forms
For example, paying a contractor but issuing a T4 instead of a T4A causes compliance issues.
Poor Record Keeping
Keep copies of all payroll documents for at least six years as required by CRA.
Failure to Update Forms
Ensure updated TD1 forms are used to calculate correct tax deductions.
Best Practices for Managing Canadian Payroll Documents
- Use payroll software that automates form generation and deadlines
- Train payroll staff on CRA requirements and updates
- Maintain detailed records of all payroll transactions and communications
- Regularly review payroll processes to catch errors early
- Consider outsourcing payroll to experts to reduce risk
The Role of Payroll Compliance in Canadian Business
Payroll documents are more than paperwork. They demonstrate your commitment to legal compliance and fair treatment of employees. Mistakes can lead to audits, fines, or a damaged reputation.
Canadian payroll compliance means you maintain accurate records, issue correct documents on time, and respond promptly to CRA or Service Canada requests.
Ayali Pay — Your Partner in Payroll Compliance
At Ayali Pay, we understand how managing Canadian payroll documents can be complex and time-consuming. Our all-inclusive payroll services in Toronto provide accurate, timely handling of all your payroll documentation needs. Whether you require CRA payroll audit support or payroll for small businesses in Toronto, our team ensures compliance and support.
Choose Ayali Pay for hassle-free payroll services in Toronto and Canadian payroll compliance. Contact us today to simplify your payroll and stay compliant with payroll regulations.
