SCENARIO
Janet started working for Quick Solutions located in Regina, Saskatchewan, on June 1, 1984. She joined
the company’s defined contribution registered pension plan on January 1, 1986 and was fully vested in
this plan when her employment was terminated in October, 2020. As part of the termination
package, Janet received a retiring allowance of $71,400.00. Janet had asked her employer to transfer
the entire eligible amount to a RRSP and took the non-eligible amount in cash.
Calculate the eligible and non-eligible portions of Janet’s retiring allowance as well as the income tax
withheld on the amount received in cash. Include these amounts when completing Janet’s T4 slip.
The $24,690.00 income tax shown on the year-end payroll register does not include the tax amount
withheld on the retiring allowance.
Complete Janet’s T4 using the information from the year-end payroll register.
Note: The boxes in the Other Information area of the T4 must be completed in numerical order.
Item Amount
Regular earnings $61,725.00
Vacation pay $2,526.00
Bonus pay $5,450.00
Overtime pay $3,636.98
Wages in lieu of notice $14,240.00
Retiring allowance $71,400.00
Taxable meal allowance $835.00
Group term life insurance non-cash taxable benefit $143.75
Loan interest non-cash taxable benefit $2,109.75
Automobile non-cash taxable benefit $1,953.47
Accidental death and dismemberment non-cash taxable benefit $57.45
CPP contributions $2,898.00
EI premiums $856.36
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Income tax $24,690.00
CPP pensionable earnings $58,700.00
EI insurable earnings $54,200.00
Charitable donations $450.00
Union dues $685.00
Employee contributions to the Registered Pension Plan $5,095.00
Employer contributions to the Registered Pension Plan $5,095.00
Registered Pension Plan number 1234567
Complete Box 14.
To complete Box 14, include Janet’s regular earnings of $61,725.00, vacation pay of $2,526.00, bonus pay
of $5,450.00, overtime pay of $3,636.98, wages in lieu of notice of $14,240.00, taxable meal allowance
of $835.00, group term life insurance non-cash taxable benefit of $143.75, loan interest non-cash taxable
benefit of $2,109.75, automobile non-cash taxable benefit of $1,953.47 and accidental death and
dismemberment non-cash taxable benefit of $57.45 for a total of $92,677.40.
Complete Box 16.
RATIONALE You answered: 2898
To complete Box 16, enter the Canada Pension Plan contributions of $2,898.00 deducted from Janet’s
pay.
Complete Box 18.
RATIONALE/You answered: 856.36
To complete Box 18, enter the Employment Insurance premiums of $856.36 deducted from Janet’s pay.
Complete Box 20.
RATIONALE / You answered: 5095
To complete Box 20, enter the Registered Pension Plan contributions of $5,095.00 made by Janet.
