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The Year End Process Overview

Outlined below are the step-by-step procedures required to complete a typical payroll year-end. The process begins with your final pay run of the year, followed by several rate updates that must be reviewed or updated before you calculate your first pay run of the new year. Once you have closed the final pay of the previous year, you can create your T4s, T4As and RL-1s as needed.

1) Complete Your Final Payroll of the Year

• Close your final period of the year as you would any other period. Reminder that CRA considers the Pay Date as the deciding factor for the "final" period of the year - not the pay period's End Date (i.e. if the Pay Date falls into the new year, then that pay sequence would be considered the first run of the new year).
• Once the period is closed, you may wish to produce a series of year-end reports to serve as a record for the year, and to satisfy your reporting requirements. Such reports could include: Worker's Compensation, Employee Profile, Cheque Register, miscellaneous reports, and of course, your employee T4s, T4As and/or RL-1s (see the Create the T4s, T4As and RL-1s section below for instructions on creating these year-end reports).

2) Before you Calculate the First Payroll of the New Year

The following items must be reviewed and updated as needed before you calculate your first payroll of the new year. Note: The following changes must be made only after you have completed and closed your last payroll for the previous year):

• If your payroll is bi-weekly, count the number of payrolls (by pay date) that you will have for the new year, and then update your pay frequency if needed in the Current Payroll - Control screen.
• If your Reduced EI Rate is changing for the new year, update the rate in the Current Payroll - Business Accounts screen.
• Update your WCB/WSIB rates and maximum assessable earnings in the Current Payroll - WCB screen.
• If you are making manual changes to an employee's Federal or Provincial TD1 rate, you can do so in the Employee - Setup Employee screen. Note: All "basic" TD1 amounts and tax changes are automatically updated during the first calculation of the new payroll year. Non-basic amounts will also be indexed based on the associated province's indexation rate (to ensure that your custom rate will increase in percentage that is similar to the revised default TD1 rate). In this case, you must have them fill out new 2025 TD1 forms.
• Update any pay rates and employee deductions and benefits that may be changing as of the new year. Pay rates and wage amounts can be updated in the Employee - Earning Items screen. Custom employee deductions and benefits can be updated in the Employee - Deductions and Benefits screen.
• Remember to set the “Clear YTD Balance” box to "Yes" in the Payroll Processing - Calculations screen when calculating the first pay sequence of the new year.

3) Create the T4s, T4As and RL1s

The following changes should be made before you create any year-end reports:

• Make sure all employees (Active, Terminated, On Leave, etc.) have correct SIN, DOB and address entered in the payroll.
• Confirm that your Dental Code for T4 Box 45 is correctly set in the Current Payroll - Business Accounts screen.

Once these above items are confirmed, you can proceed to create your various year-end documents. Note: Year-end reports must be created and submitted before the last day in February of the new year.

About Year-End Information - Each employee's T4, T4A, and RL-1 information is extracted from the payroll database and used to produce the forms. During the process, eNETEmployer will assign each employee's deductions and benefits to the corresponding boxes.

• Create your T4s, T4As and RL1s using any of the following tutorials:
  • Generate T4s
  • Generate T4As
  • Generate RL-1s

Once your reports are created, you can review them for any mismatches that may have occurred during the payroll year. To do this, open the Year-End - Print Year-End Forms screen and generate a T4 Review, T4A Review, or RL-1 Review report.

4) Create and Submit Your XML File to the CRA

Employers must send an electronic copy of the T4s and/or T4As, along with their matching summaries, to the Canada Revenue Agency (CRA). If a company has Quebec employees, the employer must send an electronic copy of the RL-1s and matching summary to Revenu Quebec.

• Create the XML file for the desired T4, T4A, or RL-1.
• Submit the XML file to the CRA.
• Submit your XML file to Revenu Quebec.

Year-End Reports Summary

For a simple step-by-step summary of year-end report process, use the following steps that are shown in the suggested order for optimal work flow:

1. Create the year-end settings file
2. Generate the T4s (or T4As, or RL-1s)
3. Edit the T4s (or T4As, or RL-1s) (optional)
4. Fix CPP/EI mismatches (optional)
5. Create the XML T4/T4A data file
6. Submit the XML file to the CRA
   

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See Also

• Year-End Overview
• An overview of the year end process
• Year End Settings help page
• Creating the year-end settings file
• Employee T4s
• Edit T4s help page
• Generate your employee T4s
• Review your employee T4s
• Edit your employee T4s
• Add a T4 manually
• Employee T4As
• Edit T4As help page
• Generate your employee T4As
• Review your employee T4As
• Edit your employee T4As
• Add a T4A manually
• T4/T4A Reports
  • Creating T4s, T4As, and other year end reports
• CPP/EI mismatches
• Print Year End Forms help page
• Printing T4/T4A statements
• Magnetic Media Filing
• Creating an XML T4/T4A data file
• Submitting an XML file to the CRA