How t4a works
Businesses issue a T4A when they pay an individual or business for services without that person being on payroll, or when they pay certain other income types the CRA requires to be reported, such as retirement allowances. Each income type has its own box on the slip, so payments need to be tracked by category through the year.
Like the T4, a T4A must be given to the recipient and filed with the CRA by the last day of February. Businesses that pay contractors or freelancers regularly often confuse T4A requirements with the US 1099 system, but the CRA's rules on which fees for services require a T4A differ by province and situation. Payments that are simply reimbursement of expenses, rather than income for services, generally do not need to be reported on a T4A, which is a frequent source of confusion for businesses issuing slips to contractors who also submit expense claims alongside their invoices.
Example
A company pays an independent consultant $14,000 for services during the year, outside of payroll. Because the payment is for services rendered by a non-employee, the company issues a T4A showing $14,000 in the fees for services box, gives a copy to the consultant, and files a copy with the CRA by the last day of February. If the same consultant is also reimbursed $800 for travel expenses tied to the project, that reimbursement is typically excluded from the T4A income box since it is not payment for services.
T4A in QuickBooks Online vs Xero
Canadian payroll add-ons for QuickBooks Online and Xero can generate T4A slips for pension or other reportable income tracked through the payroll module, though fees for services paid outside payroll are often tracked separately in accounts payable and compiled manually at year end for T4A preparation.
Related terms
How LedgerBPO handles t4a
We track payments that may require a T4A throughout the year, separate from regular payroll, and prepare the slips for your CPA's review before the February deadline. This avoids a year-end scramble to reconstruct which non-employee payments need to be reported and in which box.