Preparing for T4 Season Starts Now. 

If you’re like most business owners, you probably think year-end payroll is just about closing the books and calling it a year. But here’s the thing, December payroll actually kicks off a critical 60-day window that comes with some important deadlines. 

According to the Canadian Federation of Independent Business (CFIB), small businesses spend over 120 hours a year on government compliance, much of it tied to payroll, remittances, and reporting. 

The good news? Starting early gives you back valuable time during one of the busiest periods of the year. With a little planning now, you can breeze through February instead of scrambling to meet deadlines.

The Key Deadline You Need to Know

Mark your calendar: T4 slips need to be filed by February 28, 2026. 
This means getting them to your employees and submitting everything to the CRA. 

Here’s the part many business owners don’t realize: the work to meet that deadline actually begins as soon as you run your final December payroll. You’ll need to reconcile your entire year’s payroll records before you can create accurate T4s. Once your final payroll for December is processed, notify your accountant so they can begin preparing your T4s without delay. 

It’s best to stay ahead of the February 28 deadline to avoid unnecessary stress or penalties. Previous filing years included temporary CRA penalty relief, but as of now, no penalty extension has been announced for 2026 T4 filings.  

Understanding the Costs of Missing Deadlines

It’s worth knowing what happens if you miss the deadline. CRA’s penalty structure increases based on how late you are. 

These penalties add up quickly and can take a real bite out of your cash flow. The good news is they’re completely avoidable with some planning and preparation, and we’re here to help you stay on track. 

Common Year-End Issues to Watch For 

Some payroll mistakes are obvious right away. If you pay someone late or calculate the wrong amount, you’ll hear about it pretty quickly. 

But other issues don’t show up until year-end, and sometimes not until the CRA reaches out. By that point, you could be facing unexpected costs, especially if payroll deductions weren’t quite right throughout the year.  

One of the most common year-end surprises? Overlooking taxable benefits. 
Examples include: 

• Group insurance premiums 

• Housing allowances 

• Company car usage 

• Cell phone or internet allowances 

• Gift cards 

Taxable benefits must be reviewed and reported accurately on T4s. 
If something was treated as non-taxable all year when it shouldn’t have been, you’ll discover it during T4 preparation. It’s much easier to catch these things early rather than sorting them out in February.

What You Should Be Doing in December 

Year-end payroll preparation involves reconciling your employer remittances across several categories, things like Employer Health Tax (EHT), WSIB, and source deductions. Each one needs to be verified against what you’ve actually paid throughout the year. 

You’ll also want to review all the benefits you’ve provided to employees, not just the obvious ones, but also smaller perks that might have tax implications. 

We know this sounds like a lot, and honestly, it does take time and attention to detail. But doing this work now means your T4s will be accurate and ready well before the deadline. 

Why Getting a Head Start Matters

We get it! January often feels like recovery time after the holiday rush. But January is also when year-end discrepancies tend to surface. 

As you’re preparing T4s and reconciling annual totals, you might discover issues that need to be corrected before the February deadline. If you wait until mid-January to start, you’re left with very little wiggle room if something needs fixing. 

Starting in December gives you the time to handle any complications without the pressure. It can be the difference between a smooth process and a stressful scramble. 

What About Personal Taxes?

If you’re a business owner, December is also a smart time to think about your personal tax situation. The decisions you make now can have a real impact on your tax return in the spring. 

For example, if you’re planning to make RRSP contributions, doing it before year-end (rather than waiting until the March deadline) means your money starts working for you sooner. 

You might also want to review deductions or credits, charitable donations, medical expenses, training, etc. These can reduce your tax bill, but only if properly documented. 

For professionals and business owners, there’s also the question of how you’re compensating yourself. The mix of salary versus dividends can significantly affect your overall tax situation. It depends on your circumstances and goals for the year ahead. 

The key is to have these conversations before December ends, not in April. 

The Benefits of Getting Ahead

When you take a proactive approach to year-end planning, you’re doing more than staying compliant. You’re setting yourself up with clean, accurate financial data to start the new year. 

You’ll know exactly where you stand with payroll obligations. Errors can be corrected early. And you’ll have reliable information for strategic planning as you head into 2026. 

DDL & Co. Can Help

At DDL & Co., we’ve spent over 20 years helping businesses navigate year-end payroll and personal tax planning. We know which details matter most and how to keep everything running smoothly. 

If you’re running your final payroll this month or reviewing your personal tax strategy, let’s talk before year-end. 

• T4 preparation 

• Reconciliation of remittances 

• Taxable benefit review 

• Year-end bookkeeping clean-up 

• Personal tax planning 

 
Reach out to our team, and let’s make sure this year ends on a strong note. 

You’ve worked hard all year! Let’s ensure your year-end planning reflects that effort with accuracy, strategy, and peace of mind.