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Haven’t Received Your T4? Find Out How to File Income Tax

8 April, 2009 (22:24) | Personal Tax | By: Cecilia Leung

The deadline to file your income tax return is approaching quickly.  Only three more weeks to April 30th, and you still haven’t received your T4 from your employer!  Despite efforts of trying to get in touch with the employer, still you have nothing.  A lot of people haven’t received their T4 slip from their employer due to close down of the business last year.  The situation this year is actually getting worse, especially if you are working in a small to medium size business.

If you haven’t received your T4 and wasn’t able to get a hold of anyone now, most likely you are not going to get one.  Your employer is probably so busy trying to negotiate loans, asking friends and family for help, trying hard to sell the business, or busy talking to a bankruptcy lawyer.  Obviously they won’t have the time and the emotional energy to deal with your complaints.

So what should you do? How can you file your income tax without the T4 slip?

Your T4 slip (if you would have gotten one) should looks like the diagram shown below.  The arrows show you the most common fields required for you to file your tax return.  For example: Field 14 – Employment Income – line 101.  This field is the total income you have earned.  Read on and I will show you how you can get those numbers to fill in your tax return.

1.  Call CRA at 1-800-959-8281. Ask the CRA agent if your employer has submitted your T4.  If your employer did, ask them to give you the information on your T4 to fill out your tax return.  If not, following the step below.

(Note: The following instruction is only suitable for you if you work full time, or part time within the year, and your EI, CPP and Tax has been deducted from your paychecks)

2. Estimate how much you earn over the year (Box 14 – line 101)

Just an estimate is good enough if you didn’t save your paystub. It is not uncommon that people do not keep their paystub.  If you annual salary was $40,000,  this is the earned income for the year.  If you received hourly wages at $20 per hour, estimate how many hours you work each month for all twelve months to derive your total income. 

3. Estimate how much you paid Tax over the year (Box 22 – line 437)

To calculate your taxes, use this formula: (Estimate income – Basic personal tax credit) * tax rate

• Estimate income is derived from Step 2 above.
• Basic personal tax credit for year 2008 is $9,600. Other year basic personal tax credit can be found in line 300 of Schedule 1 in your tax package for the year.
• Your tax rate can be found in wizebiz.ca/tax-rate-2008, or go to http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-py-eng.html for all other year’s tax rate

Example: 1.  Your Estimate earned income you derived from step 2: $40,000 2.  Basic personal tax: $9,600 3.  Your tax rate on $30,400 are: Fed Tax: 15%; Ontario Tax: 6.05%. Total Tax Rate = 21.05% 4.  Tax you paid: ($40,000 – $96,600) * 21.05% = $6,399.20

 

4.  Estimate how much CPP you paid over the year (Box 16 – line 308) (Or QPP if you are in Quebec Box 17)

To calculate your CPP paid, use this formula:
(Estimate Income or Max. Annual Pensionable Earnings whichever is smaller – Basic Exemption) * Employee Contribution Rate

In 2008,

• Basic Exemption: $3,500
• Max. Annual Pensionable earnings: $44,900
• Employee Contribution Rate: 4.95%

For other year’s CPP rates, go to http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cnt-chrt-pf-eng.html 

Example: 1.  Your Estimate earned income you derived from step 2: $40,000 2.  $40,000 is less than Max. annual pensionable earnings of $44,900, use $40,000 for calculation 3.  CPP paid: ($40,000 – $3,500) * 4.95% = $1,806.75

 

5.  Estimate how much EI you paid over the year  (Box 18 – line 312)

To calculate your EI paid, use this formula:
(Estimate income or Max. Annual Insurable Earnings whichever is smaller) * EI rate

In 2008,

• Max. Annual Insurable Earnings: $41,100
• EI Rate: 1.73%

For other year’s EI rates, go to http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ei/cnt-chrt-pf-eng.html

Example: 1.  Your Estimate earned income you derived from step 2: $40,000 2.  $40,000 is less than Max. annual insurable earnings of $41,100, use $40,000 for calculation 3.  EI paid: $40,000 * 1.73% = $692.00

 

6.  Estimate RPP (Registered Pension Plan) contribution over the year (Box 20 – line 207)

If you contribute to your company’s pension plan, you will need to include that into your income tax return.  The amount of contribution are set by you, so if you do not know you have a pension plan, most likely you don’t have one, just ignore this line.  If you do have one, add up all your contribution over the year, and this value will be your RPP contribution value.

7.  Estimate Union Due you paid over the year (Box 44 – line 212)

Most union due are being deducted from your paycheck directly for a fix amount. If you belongs to a union, you probably know what is your union fee.  If you don’t know, ask around your co-workers to find out.  If you are not sure if you belongs to any union, most likely you are not in any union, just ignore this line.

8.  IMPORTANT: Write a letter to explain your situation and your calculation

This step is very important.  Since all of your calculations are only estimates based on the best of your knowledge, it is crucial to let CRA knows how did you derive your number.  Most importantly you want to let them know why do you need to calculate your own T4 information. 

Type or write up a brief letter, briefly explain your situation.  Indicating that despite your continuous effort to contact your employer, you still cannot get your T4 or any income information from your employer. Provide your employer’s company name, the boss name if you know, and the address of the business. Then briefly explain how you estimate your income for the year.

Do File Your Tax, It Is Illegal Not To Report Your Income

Although it is tempting to just say “I never get any T4 from my employer, so I don’t file my tax”.   It is very important that you report your income every year if you in fact have earned any income.  It is a criminal offence not to report your income, and the penalty can include jail time.  So just follow the steps above and file your income tax.  After all, most likely you will get some tax refund, why pay more than you need to?  You have worked hard, and have paid enough tax over the year, why not spend a little time to figure out a few numbers, fill out the tax return form to get your money back?

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