Canadian payroll breaks down into several distinct tax slips. For salaried employees, you issue a T4 per employee per year, with a Quebec copy as RL-1. For contractors and self-employed individuals you pay, it's a T4A. When an employee is laid off, resigns or terminates employment, you must issue an electronic Record of Employment (ROE) to Service Canada within 5 days of the interruption of earnings. Each of these slips has its own rules, its own deadlines and its own penalties for lateness or error. 4invoices integrates payroll with invoicing to produce slips automatically at year-end.
The T4 and its Quebec twin RL-1
For each salaried employee in Canada, you issue a T4 at the end of the calendar year (before February 28 of the following year). For employees established in Quebec, you also issue an RL-1 (Releve 1) for Revenu Quebec, containing the same information in a different format. Both slips must be consistent: if the federal T4 shows $60,000 of income, the RL-1 must show the same amount. 4invoices generates both slips simultaneously from the same payroll data, eliminating federal-provincial divergences.
The electronic Record of Employment (ROE) on termination
When an employee stops working for you — layoff, resignation, end of fixed-term contract, maternity leave, long-term sick leave — you must issue an electronic ROE to Service Canada within 5 calendar days of the last day paid. The ROE indicates the reason for termination (codes A through Z, each with specific meaning), hours worked over the last 52 weeks and insurable earnings. Service Canada uses this data to determine EI eligibility. 4invoices sends the ROE directly via the Service Canada ROE Web service.
T4A for contractors and self-employed individuals
If you pay more than $500 per year to a Canadian contractor (incorporated or not) or if you withhold tax at source on their payments, you must issue a T4A at year-end. For non-resident Canadian contractors (American consultants, European agencies), it's a T4A-NR with Regulation 105 withholding (15% default, reducible with a reduction waiver). 4invoices distinguishes these cases automatically based on the contractor record and issues the right slip.
Canadian payroll, the big picture
Payroll calculation in Canada involves several at-source deductions that software must calculate correctly each pay period: federal income tax (federal progressive rates), provincial income tax (provincial progressive rates, varying by employee's province of residence), Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) for Quebec employees, federal Employment Insurance (EI), and in Quebec the additional Quebec Parental Insurance Plan (QPIP). Rates change every year — CRA publishes withholding tables in December for the following year. 4invoices applies new tables automatically.
Quebec has a particularity: employees pay into QPP (Quebec Pension Plan) instead of federal CPP — these are distinct plans with different rates (QPP was historically slightly higher). Plus, Quebec employees contribute to QPIP (Quebec Parental Insurance Plan) which provides more generous parental leave than standard federal EI. For CSST (now CNESST), it's the employer who pays a contribution calculated on the payroll mass, not the employee. No T4 shows CNESST — it's a separate employer contribution.
Year-end is the moment of truth. Before February 28, you must issue all T4/T4A to employees and contractors, transmit copies to the CRA (T4 Summary), and transmit RL-1s to Revenu Quebec for your Quebec employees. An error on slips is expensive: CRA penalties are $10 per slip per day late, capped but cumulative across 100 employees. Consistency between T4, RL-1, paid wages and source deductions remitted is the first thing checked in a CRA review. 4invoices keeps an immutable audit trail of every individual pay.
Frequently asked
I just hired my first employee. Where do I start?
Register for a source deductions account with the CRA (form RC1 or online), get an employer RP account (which is your BN + RP0001), register with CNESST if Quebec, have the employee complete a federal TD1 and Quebec TP-1015.3 if applicable, calculate payroll using withholding tables, remit deductions to the CRA by the 15th of the following month. 4invoices automates all this after an initial setup of about 30 minutes.
My employee asks — CPP or QPP? How does that get decided?
Province of residence of the employee on December 31 determines CPP or QPP. An employee who works in Montreal but lives in Ottawa is under federal CPP (province of residence Ontario). An employee who works in Ottawa but lives in Gatineau is under Quebec QPP. 4invoices explicitly asks for province of residence on the employee record and applies the right plan automatically.
How soon after the last day of work must the ROE be issued?
Service Canada requires the electronic ROE within 5 calendar days of the end of the pay period including the last day paid — or sooner if you have a pay cycle longer than 5 days. The penalty for a late ROE is up to $2,000 per case, and the employee loses weeks of Employment Insurance if the ROE isn't there in time. 4invoices triggers ROE generation as soon as you mark an employee as terminated and sends it to ROE Web the same day.
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