What is a T4A and which contractors get one?

What a T4A actually reports beyond contractor fees

A T4A is a general-purpose information slip used for several kinds of payments that do not belong on a T4, which is reserved for employment income. Box 048 specifically covers fees for services paid to a self-employed contractor, but the same slip type is also used for pension and superannuation payments, scholarships and bursaries, and certain commissions paid to a self-employed salesperson. A business that pays a mix of employees and contractors will typically issue both T4s and T4As for the same tax year, one slip type per type of payment.

The slip is due to both the contractor and the CRA by the end of February following the calendar year it covers, the same deadline that applies to T4 slips. Late or missing T4As can trigger the same kind of penalty exposure as late T4 filings, so they belong on the same year-end checklist rather than treated as an afterthought.

The $500 threshold and the CRA's compliance stance

The CRA's administrative position is that box 048 should report fees paid to a contractor once total payments for services exceed $500 in a calendar year. This guidance has existed for a while, and for several years the CRA has said it will not penalize businesses for not completing box 048 while it reviews how the requirement should work in practice, which has led some businesses to treat the box as optional.

That relief is an administrative position, not a change to the underlying rule, and it could be withdrawn or tightened at any time; confirm the CRA's current stated position before deciding to skip box 048 entirely. We prepare T4As for contractor fees as a matter of course for clients rather than relying on enforcement relief that has no guaranteed shelf life.

Incorporated contractors are not automatically excluded

A common assumption is that once a contractor incorporates, T4A reporting no longer applies because the payment now goes to a corporation rather than an individual. In principle, the box 048 reporting requirement is not limited to unincorporated contractors, and payments to a corporation for services can still fall within scope depending on the circumstances.

In practice, many businesses focus their T4A effort on unincorporated sole proprietors and partnerships, since that is where the CRA's compliance attention has historically concentrated, and where the contractor has no other slip capturing the income. If you pay a mix of incorporated and unincorporated contractors, it is worth confirming with your accountant which relationships need a T4A rather than assuming incorporation alone removes the obligation.

When a T5018 replaces the T4A instead

Businesses in the construction industry that pay subcontractors for construction services use a different slip, the T5018, rather than reporting those payments in box 048 of a T4A. The two slips serve a similar purpose, reporting payments for services to unincorporated and sometimes incorporated payees, but a construction business generally should not double-report the same payment on both. See our answer on what a T5018 is and which contractors have to file it for how the construction-specific rule works, and our construction payroll page for how this fits alongside WSIB and payroll obligations in that industry.

Non-resident contractors need a different slip entirely

Payments to a non-resident for services rendered in Canada generally require a T4A-NR instead of a standard T4A, and non-resident withholding tax rules can apply separately from the reporting obligation itself. This is a different framework from paying a Canadian resident contractor, and businesses that hire cross-border talent, including US-based contractors doing work in Canada, should confirm which slip and which withholding rules apply before the first payment goes out rather than after a year of payments has already accumulated. Our answer on paying a US contractor from a Canadian business covers the reverse situation, a Canadian business paying someone outside Canada.

What a late or missing T4A can cost

Filing T4A slips late carries a penalty structured around how many slips were filed late and how late they were, similar in spirit to the T4 late-filing penalty regime, with the total growing along with the number of contractors affected. A business with a handful of contractors filing a few days late faces a modest penalty; a business with dozens of contractor relationships and a systemic late-filing problem faces a much larger one, since the penalty scales with slip count.

If an error is discovered after a T4A has already been filed, whether the amount was wrong or the contractor's information was incorrect, the fix is an amended slip referencing the original rather than simply reissuing a fresh one with no connection to what was already filed. Catching errors before the contractor files their own return, which relies on the same figures, avoids a mismatch that can otherwise draw CRA attention to both the payer and the contractor.

What information you need before issuing one

Collecting a contractor's legal name, address, and business number or Social Insurance Number at the start of the working relationship, rather than chasing it down in January, makes T4A season far less stressful. A simple intake step, asking every new contractor to confirm this information and their GST/HST registration status before the first invoice, prevents a scramble at year end when a dozen T4As are due within a few weeks of each other.

How we handle T4A season for clients

We track contractor payments throughout the year so T4A preparation at year end is a matter of confirming totals rather than reconstructing a year of invoices from scratch. Our tax services and payroll services work together to keep employee and contractor payment records properly separated, so year-end slip preparation covers T4s, T4As, and T5018s without any category getting missed.

Source: CRA — Payroll.