CLINIC OWNER’S GUIDE TO YEAR END: T4 OR T4A?
As the calendar flips toward February, most clinic owners are staring at their Jane App data and wondering: “Who gets a T4, and who gets a T4A?”
While it’s tempting to treat everyone as a contractor to save on payroll taxes and admin, the CRA doesn't care what your contract says. They care about the reality of the working relationship. Let’s dive into the difference and the CRA rules regarding a contractor vs employee.
1. The T4: For Your Employees
A T4 is issued to anyone in a on payroll. These are your admin staff, receptionists, and sometimes your junior clinicians.
The Deadline: February 28, 2026. BUT if the 28th falls on a weekend, it is due the next business day.
Deductions: You are responsible for withholding Income Tax and both the employee and employer portions of CPP and EI.
Purpose: Required for your employee to file their taxes and also ensures accurate tax reporting for the employer
2. The T4A: For Your Independent Contractors
A T4A is issued to those independantly contracted. In a wellness clinic, these are typically your Physiotherapists or RMTs on a percentage split.
The $500 Rule: If you paid an independent contractor more than $500 in the calendar year, you must issue a T4A.
Required: Legal business name, business number, legal address
Why you need it: It justifies the Professional Fees/Subcontractor expense for the clinic owner and for hte contractor, it is a record of earnings, allowing them to deduct their own business expenses.
3. Contractor or Employee?
If you're unsure, the CRA uses these four pillars to decide. If you "fail" these, your contractor is actually an employee in their eyes:
Control: Does the clinic owner decide how, when, and where the work is done? If you mandate their hours and specific treatment protocols, they look like an employee.
Ownership of Tools: Does the clinic provide the linens, oils, needles, and tables? An independent contractor usually provides their own tools of the trade.
Chance of Profit / Risk of Loss: Does the practitioner pay a split or rent? If they have no patients, do they still get paid? Real contractors take on financial risk; employees get a steady cheque regardless of clinic volume.
Subcontracting Work or Hiring Help: Is the worker able to hire assistants or do they have to do the work themselves? Subcontractors are typically their own business, meaning they can hire help if they wish to and make their own business decisions.
The Bottom Line
When you start your business relationship with your contractors, ensure you get their legal information right away; don’t wait until it’s crunch time. Established clinics stay established because they respect documentation.
