T4 Tax Eligible Reconciliation

The T4 Tax Eligible Reconciliation is used to verify the income tax eligible earnings is correct compared to the total taxable earnings plus taxable benefits, per pay period.  This process should be used when multiple T4 income tax deductions are used on a payroll. The tax eligible should also be check on payrolls with only one income tax deduction to ensure all manual entries are correct and the tax eligible balances.  This process recognizes income tax deductions based on the deduction Group 6,7 or 8 and Type 2. 

This process will accumulate the taxable earnings and taxable benefits for each income tax deduction based on the I/E list of earnings and deduction as define in the deduction code database.  The total earnings plus taxable benefits are compared to the income tax eligible earnings per pay period, per employee, reporting all discrepancies. 

Any pay period with earnings but no income tax deduction is reporting separately.

Pay periods where an employee has more than one T4 income tax deduction can all be reported.  Pay periods where more than one T4 income tax deduction was used are the most likely cause of T4 balancing problems.

When all income tax eligible earnings have been properly accounted for the T4 Statement Creation process can generate T4s using the income tax eligible to properly identify earnings for multiple runs.  This method of T4 reporting ensures that earnings will not be reported twice for pay periods where multiple T4 income tax deductions have been used. 

For pay periods where multiple T4 income tax deduction was used, the T4 Statement Creation process will only pick up the earnings and deduction (excluding Tax, EI, CPP) once.  This is accomplished by assigning the pay period to the income tax deduction with the highest eligible earnings for that pay period.  Income tax, EI and CPP will always be included.

Note: T4A tax and earnings must always be recorded under unique codes and thus are not applicable to this process.

Enter Start Period

Enter the starting pay period for a range of periods to process.

Enter End Period

Enter the ending pay period of the pay period range.

Enter All T4A Income Tax Deduction Codes  

Enter any Group 6,7,8 Type 2 deductions that represent T4As.

Report All or Selected Employees       

Omit balanced multiple tax occurrences  

Enter 'Y' to omit reporting employees pay periods where multiple income tax codes occur but where the earnings plus taxable benefits do balance the taxable eligible.

Enter 'N' to report all occurrences of pay periods where multiple income tax deductions were used.  This situation is the most common cause of balancing problems on the T4s.

Sort by employee number or employee name  

Enter 'N' to report employees in employee name sequence.

Enter 'E' to report employees in employee number sequence.

The report lists the following:

• Employee number and name
• Pay period
• Income tax code – NO TAX for earnings without a tax code
• Income tax eligible
• Total earnings per tax code I/E list
• Total taxable benefit per tax code I/E list
• Difference between tax eligible and earnings plus benefits