As more Canadians explore freelancing, gig work, and side hustles, a common question arises during tax season: Should I receive a T4 or a T4A? Understanding the difference can help you make informed decisions about your employment status, financial planning, and tax obligations.
This article breaks down the two forms and outlines what each means for your work, your taxes, and your future.
What Is a T4 Slip?
A T4 slip is issued to employees. If you’re on a T4, it means your employer has deducted income tax, Canada Pension Plan (CPP), and Employment Insurance (EI) contributions from your pay before it reaches you.
When is a T4 Best?
A T4 may be the right fit if you:
Prefer job stability and predictable income
Want access to employee benefits (e.g., paid vacation, health insurance)
Are eligible for EI coverage (for maternity leave, illness, or job loss)
Plan to apply for loans or mortgages and need consistent income records
What Is a T4A Slip?
A T4A slip is typically issued to independent contractors, freelancers, and gig workers. Unlike a T4, no taxes are deducted at source. You receive the full amount and are responsible for handling:
Your own tax payments
Both the employer and employee portions of CPP contributions
When is a T4A Best?
A T4A might suit you if you:
Want flexible working hours and control over your earnings
Feel confident managing your taxes independently (or have professional help)
Intend to deduct business expenses, such as home office costs, tools, internet, marketing, or mileage
Are comfortable planning for your own insurance and retirement
Real-World Examples
Emily – Graphic Designer
On a T4: Emily works full-time for a company, uses their equipment, and is paid biweekly with taxes deducted.
On a T4A: She freelances, buys her own software and tools, and sets her own schedule. She deducts business expenses but manages her own taxes.
Tom – Electrician
As a self-employed tradesperson, Tom finds his own clients and invoices them directly. No taxes are deducted from his payments, but he deducts tools, fuel, and other work-related expenses to lower his taxable income.
Choosing Between T4 and T4A
| Preference | Choose T4 | Choose T4A |
|---|---|---|
| Job stability | ✅ | |
| Employee benefits | ✅ | |
| Flexibility & independence | ✅ | |
| Deduct business expenses | ✅ | |
| Easy tax management | ✅ | |
| Willing to manage taxes | ✅ |
Key Reminder
If you’re on a T4A, be sure to set aside a portion of your income for taxes and CPP. Many new freelancers are surprised by a large tax bill when they file—planning ahead is essential!
Need Help Filing?
Whether you’re on a T4 or T4A, the expert team at SPG Tax can help you:
Understand your tax obligations
Maximize your eligible deductions
File accurately and on time
Stay fully CRA-compliant
Contact Us
📞 866-514-6979
Let SPG Tax help you navigate tax season with confidence—whichever form you file with.