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Why is a review important

CPP deficiency calculations

EI deficiency calculations

Security options on PIER listings

Multiple T4 returns

Each year, we check the calculations you made on the T4 slips that you filed with your T4 Summary. We do this to make sure the pensionable and insurable earnings you reported correspond to the deductions you withheld and remitted.

We check the calculations by matching the pensionable and insurable earnings you reported with the required Canada Pension Plan (CPP) contributions or employment insurance (EI) premiums shown in the Payroll Deductions Tables. We then compare these required amounts with the CPP contributions and EI premiums reported on the T4 slips.

If there is a difference between the CPP contributions or EI premiums required and those you reported, we print the figures on a PIER listing. If you file electronically and report an employee number on your T4 slips, we will display the employee number on the PIER listing.

We will send you the listing showing the name of the affected employees and the figures we used in the calculations. We will also include a PIER summary that shows any balance due.

Why is a review important

We verify these calculations so that your employees or their beneficiaries will receive the proper:

• CPP benefits if the employees retire, become disabled, or die
• EI benefits if the employees become unemployed, take maternity, parental, adoption, compassionate care leave or leave to provide care or support to a family member who is critically ill or injured or if the employees are injured, ill, or on leave without pay

CPP deficiency calculations

If your employee has 52 pensionable weeks during the year, calculate the required CPP contributions as follows:

Step 1: Subtract the CPP basic exemption for the year from the CPP pensionable earnings shown in box 26 on the employee's T4 slip.

Step 2: Multiply the result of Step 1 by the current year's CPP contribution rate.

The result is the employee's yearly CPP contributions, which you report in box 16 of the T4 slip.

There may be cases when you have to either start deducting CPP, or stop deducting CPP, for your employee during the year. For more information, see Starting and stopping CPP deductions.

In these cases, to verify the employee's CPP contributions before you file the T4 slip, you can complete the Calculation of Canada Pension Plan (CPP) contributions (multiple pay periods or year-end verification).

If you put an "X" or a check mark in box 28 (CPP/QPP, EI and PPIP exempt) on the T4 slip and you reported amounts in boxes 16 or 17, or 26 for CPP/QPP, our processing system ignores the "X" or check mark. For more information, see Box 28 – Exempt (CPP/QPP, EI and PPIP).

If you issue more than one T4 slip to the same employee, report the pensionable earnings amount for each period of employment in box 26 on each T4 slip. Reporting these amounts correctly can reduce the number of unnecessary PIER reports for CPP deficiency calculations, especially if the employee worked both inside and outside Quebec.

EI deficiency calculations

To calculate the required EI premiums, multiply the EI insurable earnings shown in box 24 of the employee's T4 slip by the current year's EI premium rate.

The result is the employee's yearly EI premiums, which you report in box 18 of the T4 slip.

To verify the employee's EI premiums before you file the T4 slip, fill out the Calculation of employee employment insurance (EI) premiums.

If you put an "X" or a check mark in box 28 (CPP/QPP, EI and PPIP exempt) on the T4 slip and you reported amounts in boxes 18 and 24 for EI, our processing system ignores the "X" or check mark. For more information, see Box 28 – Exempt (CPP/QPP, EI and PPIP).

If you issue more than one T4 slip to the same employee, report the insurable earnings amount for each period of employment in box 24 on each T4 slip. Reporting these amounts correctly can reduce the number of unnecessary PIER reports for EI deficiency calculations, especially if the employee worked both inside and outside Quebec.

Security options on PIER listings

The PIER program checks security options reported as a non-cash taxable benefit in box 38 (Security options benefits) and box 14 (Employment income) on T4 slips because such a benefit is pensionable but not insurable. If this type of benefit is the only amount reported on a T4 slip, enter an "X" or a check mark in box 28 (Exempt) under EI. Do not place an "X" or a check mark in box 28 (Exempt) under CPP. This benefit is pensionable and CPP contributions are required.

Multiple T4 returns

If you are an employer with a business number (BN) that has multiple payroll program account extensions, we will not send you a PIER report if we detect deficiencies when your return is processed. At a later date we will compare all T4 returns for your BN to verify the PIER information and contact you if we confirm there are deficiencies. If we do not find any deficiencies, we will cancel the PIER. If you have any questions, contact the PIER unit at your NVCC as follows:

Newfoundland and Labrador NVCC
Post Office Box 12071 Station A
St John’s NL A1B 3Z1

Shawinigan NVCC
4695 Shawinigan-Sud Boulevard
Shawinigan-Sud QC G9P 5H9

Surrey NVCC
9755 King George Boulevard
Surrey BC V3T 5E1

Winnipeg NVCC
66 Stapon Road
Winnipeg MB R3C 3M2

Related topics

• Pay (remit) source deductions