Questions About Income Tax Implications
1. Are employer contributions taxable?
All pension contributions made by your employer on your behalf are non-taxable. Your pension dollars are only taxed when and as you access them, usually in retirement.
2. Do I require an annual receipt from the Plan for income tax reporting?
No, all pension contributions should be recorded on your T4 slip. Furthermore, the employer’s Pension Plan contributions should not be treated as a taxable benefit and therefore should not be included in your gross wages.
3. How should my pension contributions be recorded on my annual T4 slip?
Your employer should report contributions made by you in Box 20 (Registered Pension Plan Contributions) of your T4 slip. If you and your employer both contribute, the total of all contributions should be reported in Box 52, Pension Adjustment (PA). An individual’s PA in a year affects the limit he or she can contribute to a Registered Retirement Savings Plan (RRSP) in the following year.