How to do T4 in QuickBooks Online?

Are you looking to streamline the process of preparing and filing T4 slips for your employees using QuickBooks Online? You’re in the right place! In this comprehensive guide, we’ll walk you through the entire process – how to file T4 in QuickBooks online –  making it easy and hassle-free.

What Are T4 forms or slips?

T4 slips are essential annual documents used to report employee wages and taxes paid in the previous calendar year. They encompass various income components such as salaries, bonuses, commissions, vacation and sick pay, taxable benefits, allowances, and income taxes.

Filing T4 slips is not just about reporting employee income; you also need to submit them to the Canada Revenue Agency (CRA). Here’s how you can accomplish this seamlessly using QuickBooks Online.

When Should T4 slips be issued?

Before diving into the QuickBooks  online T4 filing process, it’s crucial to know when you should issue T4 slips:

Deductions made – You should prepare T4 slips if you made deductions on behalf of your employees. These deductions can include 

• Canada Pension Plan (CPP) contributions – These are mandatory contributions made by both employees and employers to fund the Canadian retirement pension plan. The amount is based on a percentage of the employee’s earnings, up to a certain annual maximum.

• Québec Pension Plan (QPP) contributions – Similar to CPP, QPP is the pension plan for residents of Quebec. It also requires contributions from both employees and employers, following similar rules to CPP.

• Provincial Parental Insurance Plan (PPIP) premiums – These premiums are specific to Quebec and contribute to the province’s parental insurance plan, which provides benefits to parents during maternity, paternity, and adoption leaves.

• Employment Insurance (EI) premiums – EI premiums are paid by both employees and employers to fund the Canadian Employment Insurance program, which provides financial support to employees who lose their jobs or are on leave due to various reasons, such as sickness, maternity, or parental leave.

• Income tax – Income tax is deducted at source from an employee’s earnings by their employer. The amount withheld depends on the employee’s income level, deductions claimed, and the province or territory in which they work.

Minimum earnings – T4 slips are required when you’ve paid your employees at least 500 USD during the calendar year.

Remember that you must provide T4 slips to employees for each territory or province they have worked in for your company.

Now, let’s break down the process of preparing and filing T4 slips in QuickBooks Online.

A Comprehensive Guide on How to File T4 in QuickBooks

How to file T4 in QuickBooks for your employees is a crucial annual task, and QuickBooks simplifies this process. In this guide, we’ll walk you through the steps to file T4 forms in QuickBooks with ease.

1 – Review company information

• Click on the “Settings” icon in QuickBooks.
• Navigate to “Payroll Settings.”
• Under “Preferences,” select “Federal Taxes.”
• Access “Company Federal Tax Information” and enter the CRA Payroll Number and T4 Transmitter Number in the required field. 
• Click “OK” to save the information.

2 – Review employee information

• Go to “Employees” and choose the specific employee.
• Click “Edit” and update employee benefits information, employee data, and payroll deductions.
• Confirm the changes and click “Done.”

3 – Prepare T4 slips

• Select “Taxes” in QuickBooks.
• Click on “Payroll Tax.”
• In the “Forms” section, choose “Annual Forms.”
• Opt for “T4 Slip (employer).”
• Select the tax year for the T4 slips you want to view.
• Click “View” to open and verify the T4 slips using Adobe Acrobat.

Review all the information for accuracy. Download and print the T4 slips by clicking the available icons in Adobe Acrobat. Close the window when you’re done.

4 – Send T4 slips to employees

Sending T4 slips to your employees is a crucial step. Here’s how you can do it – 

Part 1 – Invite the employee to workforce

• Click on the “Employees” option in QuickBooks.
• Select the employee you want to invite.
• Click “Edit” and then go to the “Pay” tab.
• Enter the employee’s email address.
• Check the box that says “Invite this employee to view their pay stubs online.”
• Click “Done.”

After following these steps, your employee will receive an invitation. Once they accept and sign into the Workforce, they can access the T4 slip you’re about to send.

Part 2 – To provide your employee with their T4 slip, follow these steps within QuickBooks:

• Start by accessing the “Taxes” section in QuickBooks.
• Next, select “Payroll Tax.”
• In the “Annual Forms” category, opt for the “T4 Slip (employer)” option.
• Specify the tax year for the T4 slip you want to send.
• Click on “View” to open the T4 slip using Adobe Acrobat.
• Carefully review the slip for accuracy.
• If everything appears correct, proceed to click “Send to employee.”

You’ve successfully sent the T4 slip to your employee. Sending invitations and sharing slips becomes a breeze with QuickBooks, and you can also opt for email as an alternative method.

5 – Submit T4 summary to the Canada revenue agency (CRA)

Now that you’ve distributed T4 slips to your employees, it’s time to share the T4 summary with the CRA. Follow these steps – 

Part 1 – View and submit the T4 summary

• Access “Employees” on the left menu in QuickBooks.
• Click on “Payroll Tax.”
• Under “Forms,” select “Annual Forms.”
• Choose “T4 Slip (employer).”
• Specify the time period and click “View” to open the T4 Summary in a new tab.
• If needed, print or save a copy for your records.
• Return to QuickBooks Online.
• Click “Submit” to export the T4 slips in XML format, creating an archive in QuickBooks Online.

Part 2 – Share the T4 summary with CRA

• Visit the “Service Canada” website.
• Opt for “Internet file transfer.”
• Review the disclaimer and click “I agree.”
• Enter the “Account Number” (without spaces).
• Input the “Web access code” provided by the CRA.
• Click “Next.”
• Use “Browse” to locate your T4 file in XML format, then hit “Upload” to submit the file.
• Finally, click “Submit.”

Note – The T4 file in XML format includes the T4 summary, so there’s no need to upload it separately. Keep a record of the submission date and time for your reference.

Important points to consider – If you prefer to mail T4 forms to the CRA, send printed versions of T4 slips with the T4 summary included. Remember to file the T4 summary with the CRA by the end of February during the tax year to avoid penalties.

Following these steps in QuickBooks ensures a smooth T4 filing process, showcasing your expertise, experience, authority, and trustworthiness (EEAT) in managing payroll tasks.

Dos and Don’ts for Filing T4 Forms

Here are some important considerations when processing QuickBooks  online T4 filing – 

Do include these types of income – 

• Wages, salary, bonuses, commissions, vacation pay, and other forms of remuneration paid to employees throughout the year.
• Retiring allowances.
• Taxable benefits.
• Deductions withheld throughout the year.
• Pension adjustments for employees accumulating benefits under Deferred Profit Sharing Plans (DPSP) and Registered Pension Plans (RPP).

Don’t include these types of income – 

• Annuities, lump-sum payments, or pensions.
• Payments to non-residents for services provided in Canada, excluding director fees.
• Amounts from retirement compensation agreements.
• Payments to subcontractors for goods and services related to construction activities.

How to E-File T4 from QuickBooks online?

Utilizing the EFILE feature offers a swift and convenient method for submitting T4 forms. However, it’s important to note that internet filing isn’t an automated process; you’ll need to follow specific steps on the CRA website.

Before initiating how to file T4 in QuickBooks process, it’s crucial to familiarize yourself with the prerequisites. Once you’ve met these requirements, you can proceed with the primary filing procedure. Let’s delve into the steps for file T4 in QuickBooks Online. Here’s how to do it – 

Requirements to file T4 forms – 

• Transmitter number – Ensure you have this magnetic media transmitter number. If not, visit the CRA website for information.
• Web access code (WAC) – Retrieve the WAC (Web Access Code) for the employer you are filing on behalf of. Locate it above the Business Number (BN) on the customized T4 summary form

E-File your T4 slips

• Open your return containing T4 slips.
• Go to the “File” drop-down menu.
• Select “Properties.”
• Adjust the “T4 Status” to “Ready to File.”
• Utilize the “E FILE” dropdown menu and select either “T5013 return” or “Transmit Federal Slips.”
• In the “Transmit” window, click “T4.”
• Select the appropriate data type from the drop-down.
• Click “OK.” A green checkmark indicates successful XML file creation.
• Click “OK” again, and your web browser will open, redirecting to the CRA.

Where Is the XML file saved?

The XML file can be saved in different locations based on your settings – 

• Go to “EFILE,” then “Options,” and select “XML directory” to find the file.
• If the “XML directory” is blank, locate the file in the default directory for FX files by adjusting settings under “Options” > “Environment” > “File.”

What If the XML file did not save successfully?

If you encounter errors, follow these steps – 

• Enter the WAC for your business.
• Browse the FX directory to add your XML file.
• Continue the web transmission process on the CRA website.

Important – Print your confirmation number from the CRA submission’s final page before closing the web browser, as ProFile doesn’t store submission records.

Conclusion

How to file T4 in QuickBooks is essential for accurately reporting employee income. Ensure you adhere to the dos and don’ts to maintain compliance. In this Advice Venture guide, we’ve covered step-by-step instructions on how to e- file T4 in QuickBooks Online.

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