Example

John is injured at work on July 11, 2015. He continues to be paid his regular wages until February 3, 2017, when the workers' compensation board reimburses the employer the amount of his claim.

Results

• All wages paid in 2015, 2016, and 2017, along with Canada Pension Plan (CPP) contributions, employment insurance (EI) premiums, and income tax withheld have to be reported on a T4 slip for each of the years. John will report the T4 amounts on his income tax and benefit return for each year.
• In 2017, the year the claim was paid, the employer cannot adjust box 14, "Employment income," on the T4 slip or reduce the CPP contributions, EI premiums, and income tax withheld in 2015, 2016, or 2017.
• When filling out the T4 slip for 2017, the employer will enter code 77 in the "Other information" area at the bottom of the slip, and report the total amount reimbursed to the employer by the workers' compensation board for the three years.
• When John files his 2017 income tax and benefit return, he will claim the amount reported under code 77 as a deduction for other employment expenses (repayment of salary or wages).
• If there is any unused amount and John does not have other types of income in 2017, this amount may become a non-capital loss.