The Pier Report

At year-end, the T4 summary is completed and sent to the CRA.  The T4 forms are generated and sent to the employees before the end of February in the year following the payroll year.  If the employer is late in completing the T slip summary and remitting to the CRA, depending upon the number of slips to be completed, an employer could see a penalty of anywhere from $10 to $7,500.

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Each T4 Summary Report, filed by the end of February, is subject to a Pensionable and Insurable Earnings Review – a PIER.  The purpose of this review is to ensure that the appropriate amounts of CPP and EI have been withheld, matched, and remitted, based on the gross earnings and other information reported by the employer.

If a discrepancy is found, the CRA issues a PIER report on which it itemizes the individual employees for whom the amounts of CPP and or EI withheld and remitted do not agree with the CRA’s calculations.  The employer is required to review the issue and make the necessary corrections to the year-end forms or remit the under-remitted withholdings. 

Tax Tip:  An employer is required to obtain the social insurance numbers (SIN) of its employees.  If a number is not obtained and the CRA believes the employer did not undertake a reasonable effort to obtain it, a penalty of $100 per failure can be imposed. It is important to document all attempts to obtain the SIN in the employee’s file.

Bottom Line:  It’s audit time for T4 Summary Reports.  Be sure to see a qualified tax and payroll specialist for help should CRA find a significant discrepancy.

Additional educational resources: This course is a component of the DFA-Tax Accounting Services Specialist Designation Program.