1. What a T4A actually is
The T4A is the slip CRA uses to track income that didn't come from a regular employer. Pension payments, scholarships, retirement allowances, self-employed commissions — they all live on a T4A.
The part we're talking about here is box 048: fees or other amounts for services. The idea is simple. If your business pays another business for work performed, the payment has to show up on the recipient's books. The T4A is how CRA cross-checks that the contractor actually reported what you paid them.
Think of it as the contractor version of a T4. An employee gets a T4, a contractor gets a T4A. Same concept, different form, no source deductions attached.
2. Who has to file one
Any business that pays another business or self-employed person more than $500 in a calendar year for services has a filing obligation. That includes the subcontractor you use twice a year, the bookkeeper on contract, the freelance designer who did your logo, the IT consultant who comes in when something breaks.
Three things matter here, and most owners get at least one wrong:
- Services, not goods. If the contractor is supplying only materials, the payment isn't reportable. If they're supplying services — or services and materials on one invoice — it is.
- The threshold is annual, not per-invoice. Four invoices at $200 each add up to $800 and trigger the rule. You can't split around it.
- It applies even when the contractor is incorporated. A payment to another CCPC counts the same as a payment to a sole prop. This is the part owners miss most often.
The slip goes in box 048, and the T4A slips plus the T4A Summary are due on or before the last day of February following the calendar year. For the 2025 tax year, that's February 28, 2026 — and since that's a Saturday, CRA will accept filings through March 2, 2026.
You also have to give a copy of the slip to the contractor by the same deadline. That part is easy. The hard part is having all their SINs or business numbers on file — see section 5.
3. What changed in December 2025
Here's why this rule matters now when it didn't last year.
The T4A box 048 rule has been in the Income Tax Act for decades. But in 2011, CRA announced a moratorium — a formal pause on assessing penalties for failing to report fees for services. The stated reason was to give businesses time to learn the requirement. In practice, that "time" stretched past fourteen years. Owners stopped filing. Software stopped prompting. The rule became one of those technical obligations that everyone quietly ignored.
In December 2025, the CRA announced it was lifting the moratorium for the trucking industry, starting with the 2025 tax year. Payments to Canadian-controlled private corporations (CCPCs) operating in trucking now carry real penalties if they're not reported in box 048 on the February 2026 filing.
Why trucking first? It's tied to the "Driver Inc." compliance push — the CRA's campaign against drivers being treated as incorporated contractors to sidestep payroll deductions. But trucking isn't where this ends. Budget 2025 earmarked $77 million over four years (plus $19.2 million annually after that) for the CRA to expand this work to other personal-services-business and reporting-fees-for-service files. The trucking announcement was the signal flare. The rest of the sectors are next.
Read between the lines: if you're a small business paying contractors today, the worst-case scenario of "nothing happens" is no longer a safe default. Not for trucking now, and likely not for your industry within a year or two.
4. The penalty math
This is the part that makes owners sit up. The information-return penalty is standard across T4, T4A, T5, and most other slips:
- $25 per slip, per day the slip is late
- Minimum $100 per slip (kicks in the moment a slip is late — even by one day)
- Maximum $2,500 per slip (hit around day 100 of lateness)
The math multiplies. Each missed slip is its own penalty. Miss ten of them, and the numbers stop looking theoretical.
On top of the information-return penalty, if CRA decides the reason you didn't file was carelessness or deliberate avoidance, gross-negligence penalties and interest can stack on. And if the contractor you paid never reported the income, you may end up pulled into a broader audit conversation about contractor-versus-employee classification that's much harder to resolve than a missed slip.
5. The fix — before February
The good news: catching up is a workflow problem, not a tax-planning one. Three moves, none of them complicated.
- Collect a SIN or business number from every contractor. If they're a sole proprietor, get their SIN. If they're incorporated, get their business number (BN). No exceptions. Without it, you can't file a valid slip, and the contractor can't match it on their return. Ask for it the first time you pay someone — treat it the same way you'd treat an invoice or a W-9 south of the border. A one-line email works. "Before I pay this, can you send me your SIN or BN for my T4A records?"
- Set a February filing reminder. Not an end-of-February reminder. A mid-January one. That gives you two weeks to chase any missing SINs and another two to clean up the contractor list against your GL. The actual filing is fast; the data collection is what kills the timeline.
- Turn on your bookkeeping software's T4A module. QuickBooks Online, Xero, and Sage all have built-in T4A generation — most owners just never enabled it. Flag your contractor vendors with a "T4A required" tag, let the software track cumulative payments during the year, and generate the slips at year-end. If you're still on spreadsheets, this is one more reason to move.
None of this is glamorous. All of it is cheaper than a $25,000 penalty letter. And if your books have gone more than one year without tracking T4A-eligible payments, this is the kind of cleanup we handle as part of our bookkeeping engagements — we rebuild the contractor ledger, file the slips, and set up the flag system so next year runs on autopilot.
6. Sources
Want a one-page checklist of which of your contractors actually need a T4A — and which don't? DM us on Instagram or drop a note from the contact page. We'll reply with the contractor-reporting checklist we use on every year-end file.
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