T4As Explained: Are You Compliant With CRA Requirements?
Box 48 the penalty moratorium and what your business needs to know
Updated October 20, 2026
Did you pay your service provider or subcontractor? Did you receive a T4A from a client? Have you heard about a T4A penalty moratorium? Now you’re wondering: Do I need to issue a T4A, receive one, or both?
For Canadian business owners, these questions can turn a simple transaction into a paperwork puzzle. Here’s how the pieces fit together.
What is a T4A and what goes in Box 48
A T4A is an information slip used to report several types of income. For contractors and small businesses, the relevant section is often Box 048, “Fees for services,” commonly called Box 48.
For most Canadian resident service providers, CRA guidance generally requires a T4A when total service payments to that recipient exceed $500 in a calendar year, or when income tax was deducted. The recipient can be an individual, partnership, trust, or corporation. GST/HST and PST are excluded from Box 48.
The threshold applies to the total paid during the January to December calendar year, not each invoice.
Example: Your business pays a Canadian marketing agency $1,000 a month for services. The agency’s incorporated status does not, by itself, remove the T4A reporting requirement. You should review those payments with your accountant.
Calling a supplier a “service provider” instead of a “contractor” does not settle the issue. What matters is the payment and the reporting rules that apply.
Issuing and receiving a T4A are different responsibilities
Your business can be on either side of a service payment.
| Situation | Your role | What to review |
|---|---|---|
| Your business pays another business or self-employed individual for services | Payer | Whether you must prepare, file, and provide a T4A to an incorporated business or a self-employed individual |
| A client pays your business and issues your business a T4A | Recipient | Whether the income reported on the T4A slip is accurate, based on the income that you have received during a January to December calendar year, regardless of your corporate year end date or contract term and identify the correct recipient |
Think of it as two sides of the same invoice. Paying a supplier and collecting from a client create different tasks.
If you are issuing a T4A
Start by reviewing your supplier payments for the calendar year. Confirm the service provider’s legal name, address, and required tax identification details, such as business number or social insurance number.
If you receive a T4A
Compare it with your invoices, payments, and accounting records based on the January to December calendar year, and ensure that the T4A does not include any GST/HST that you have received.
For bookkeeping purposes, if you are tracking your business income based on your invoice received, you do not need to record the income from your T4A into your software as this would be a duplicate revenue entry. A tax slip is a record to reconcile, not a second payment.
For example, if your corporation has already recorded $40,000 of consulting revenue from a client, receiving a T4A for those payments does not mean it earned another $40,000.
Discrepancies will need to be investigated. Calendar-year payments may not match a corporation’s fiscal-year revenue, and invoice timing can also affect the comparison.
If a slip names you personally but the work was contracted and invoiced through your corporation, ask the client/payer to amend the T4A slip and provide you an updated copy before e-filing.
What does the T4A penalty moratorium mean
This is where much of the confusion begins.
The CRA introduced a moratorium in 2011 on assessing penalties for failures relating to completing Box 048. Its current guidance says that moratorium remains in place for industries other than the specified trucking industry exception.
The T4A reporting requirement still exists, however it is important to note that a CRA pause in assessing this particular T4A penalty does not repeal the underlying obligation.
That distinction matters when you hear either of these claims:
“Businesses no longer need to report service payments.”
“Every business now faces penalties because the moratorium has ended.”
Neither statement accurately describes the CRA’s current position.
What changed for trucking businesses
Starting with the 2025 tax year, the CRA lifted the moratorium for specified payments between trucking businesses.
The published policy covers qualifying service payments exceeding $500 in a calendar year made by a trucking business to a Canadian-controlled private corporation in the trucking industry. It should not be presented as a blanket change affecting every IT consultant, professional practice, or marketing agency.
What penalties could apply
The Box 48 moratorium needs to be considered separately from the general T4A penalty rules.
Where late-filing penalties apply, the CRA’s published administrative relief schedule includes:
| Number of T4A slips filed late | Daily penalty | Maximum |
|---|---|---|
| 1 to 5 | Flat penalty | $100 |
| 6 to 10 | $5 | $500 |
| 11 to 50 | $10 | $1,000 |
| 51 to 500 | $15 | $1,500 |
For the daily amounts, the minimum is $100 and the calculation runs for up to 100 days. Larger filings have higher maximums. These are general late-filing figures, not a statement that every missed Box 48 slip currently attracts a penalty.
Other obligations also matter. The CRA publishes separate penalties for failing to provide slips to recipients and for filing on paper when electronic filing is required. Filing more than five T4A slips generally requires electronic filing.
If you discover missing or late slips, have your accountant assess the specific failure and applicable CRA policy before estimating a penalty.
When are T4As due
T4A slips generally must be filed with the CRA and provided to recipients by February 28th following the calendar year being reported. If the deadline falls on a weekend or a CRA-recognized public holiday, the next business day applies.
Your corporation’s year-end does not change the calendar-year reporting period for these slips.
Does a T4A mean payroll deductions are required
For most Canadian resident recipients of genuine service fees, CRA guidance says not to withhold CPP, EI, or income tax from those payments.
However, the actual working relationship matters. A contractor label or a T4A does not resolve whether someone is an employee. If the relationship is employment, payroll obligations need a separate review.
For incorporated consultants, personal services business status is another separate question. A slip should never replace a review of the underlying arrangement.
Your T4A preparation checklist
A little organization now beats an inbox treasure hunt in February.
Get advice you can trace back to the rules
AI tools and online discussions can help you identify questions. They can also mix up reporting obligations, penalty relief, and rules for different industries.
Before acting, check the current CRA guidance and confirm how it applies to your business. A confident answer still needs a reliable source.
Need help reviewing contractor payments, T4As, or source deductions? Contact CPA4IT to book a free discovery call. We’ll help you understand your responsibilities and prepare your next steps.
This article provides general information based on CRA guidance reviewed on October 20, 2026. Tax treatment and reporting obligations depend on your circumstances. Obtain advice specific to your business before filing.
