Year-end tax reporting
If you make TFSA matching employer contributions, your contributions are considered a taxable benefit by the Canada Revenue Agency (CRA) and should be included in income for the purposes of determining CPP, EI and income tax deductions. The matching TFSA amount must be included in Box 40 on T4 slips for plan members.
Employee contributions to an RRSP impacts payroll taxes. Do not deduct amounts for CPP or EI from the RRSP amounts contributed by employees as a deduction from their pay. Deduct the amount of the RRSP contribution from income to determine the amount of income tax to withhold, provided you have reasonable grounds to assume the employee will be able to deduct the matching RRSP contribution or the purposes of calculating withholding taxes. The matching RRSP amount must be included in Box 40 on T4 slips for plan members.
Common Wealth is responsible for preparing and submitting an annual CRA TFSA information return and for preparing and issuing to plan members RRSP tax receipts twice per year (February and late March). Plan members who cash out some or all of their RRSP holdings will be issued a T4RSP by Common Wealth in February of the year following the year in which the payment is made.
When preparing T4 slips, please include employer DPSP contribution in Box 52 (Pension Adjustment). If the CRA has issued your 7-digit DPSP registration number, please include it in Box 50 (DPSP Registration Number). If the CRA hasn’t issued your registration number yet, report the Pension Adjustment in Box 52 and leave Box 50 blank.