Clarification on T4A requirements highlights contractor risks

Recent guidance from the Canada Revenue Agency has clarified the conditions under which T4A slips must be issued for contractor payments and other non-employment income. The clarification reaffirms that certain incorporated or independent contractors providing services may still fall within T4A reporting requirements.

The announcement is significant for staffing and HR service providers that engage incorporated workers or subcontractors. Inconsistent reporting practices have historically been a source of audit risk in contingent labour arrangements.

The CRA’s guidance is expected to prompt employers to review onboarding documentation, payer classifications, and general ledger mappings to ensure compliance. Improved classification systems and quarterly audits are recommended to reduce exposure to misreporting penalties.