Box 40 on your T4 is the total dollar value of taxable benefits and allowances your employer gave you during the year, reported under Code 40 in the “Other Information” area at the bottom of the slip. The amount is already included in the employment income shown in Box 14, so you do not enter it anywhere else on your tax return.1Canada Revenue Agency. T4 Statement of Remuneration Paid Code 40 exists so the CRA can verify that your employer correctly rolled non-salary compensation into your total pay. Add it on top of Box 14 and you double-count the income and overpay.
What Kinds of Benefits End Up in Box 40
Code 40 is the catch-all. When your employer gives you something of value beyond your salary and no other T4 code fits, the amount lands here. Automobile standby charges have their own code, security options have their own code, board and lodging has its own code. Everything else that qualifies as a taxable benefit goes under 40.2Canada Revenue Agency. T4 Slip – Information for Employers
The items you’re most likely to see reflected in the figure:
- Housing allowances paid to help cover rent or utilities. The full amount is a taxable benefit.3Canada Revenue Agency. Employer’s Guide to Taxable Benefits and Allowances
- Group term life insurance premiums paid by your employer on your behalf.
- Vehicle allowances the CRA does not consider reasonable — most commonly a flat monthly car allowance, or a per-kilometre rate that isn’t tied to actual kilometres driven. When the allowance fails the reasonableness test, the entire amount becomes taxable and is reported under Code 40 rather than Code 34.4Canada Revenue Agency. Automobile or Motor Vehicle Benefits – Allowances or Reimbursements Provided to an Employee for the Use of Their Own Vehicle
- Non-cash gifts and awards above the $500 annual tax-free threshold. Anything past $500 is taxable.5Canada Revenue Agency. Gifts, Awards, and Long-Service Awards
- Employer-paid personal expenses such as cell phone plans used partly for personal calls, professional memberships that primarily benefit you, or subsidized meals.
The CRA’s test is whether you received an economic advantage that can be measured in money, and whether you were the primary beneficiary. If yes, it’s taxable.3Canada Revenue Agency. Employer’s Guide to Taxable Benefits and Allowances
Why the Number May Look Higher Than You Expected
Employers value the benefit at fair market value — what you would have paid for the same thing outside the employment relationship. If the employer’s actual cost matches fair market value, the CRA accepts that.3Canada Revenue Agency. Employer’s Guide to Taxable Benefits and Allowances
What surprises people is the tax gross-up. The valuation must include any GST/HST the employer owes on the benefit, plus provincial sales tax that would have applied if the employer weren’t exempt. So the figure in Box 40 is not just the sticker price of what you received; it also carries the sales tax the government considers to have been collected on the supply to you.6Canada Revenue Agency. About the GST/HST on Benefits
How to Handle Box 40 When You File
Do not enter Box 40 anywhere on your return. The CRA is explicit: “Do not report this amount on your tax return. This amount is already included in box 14.”1Canada Revenue Agency. T4 Statement of Remuneration Paid
On your T1, you enter the Box 14 figure on Line 10100 (employment income). That figure already contains your salary, wages, commissions, and every taxable benefit itemized in the Other Information area. The codes at the bottom of the slip are a breakdown for CRA cross-checking, not additional income lines for you to declare.2Canada Revenue Agency. T4 Slip – Information for Employers Tax software behaves the same way: you type the codes into the Other Information section for completeness, and the software knows not to add them again.
What to Do If the Amount Looks Wrong
Start with your employer’s payroll department. The employer calculates the benefit’s value and is responsible for issuing a corrected slip when there’s an error. Amended T4s go to both you and the CRA.7Canada Revenue Agency. Amend, Cancel, Add, or Replace Slips and Summaries
The most common reasons a figure looks too large: GST/HST was added to the benefit’s fair market value; a flat monthly car allowance was treated as fully taxable rather than partially; or small gifts added up past the $500 non-cash threshold. Ask for the detailed calculation before assuming an error. If your employer refuses to correct a genuine mistake, you can file based on what you believe is accurate and attach a note explaining the discrepancy, though expect the CRA to follow up.
A Note on CPP and EI
Taxable benefits affect payroll deductions differently depending on how they’re delivered. Cash taxable benefits and allowances generally attract both CPP contributions and EI premiums, the same as regular pay.8Canada Revenue Agency. Employers’ Guide – Payroll Deductions and Remittances Most non-cash benefits are pensionable for CPP but not insurable for EI. The practical effect is that non-cash benefits raise your CPP pensionable earnings in Box 26 without raising your EI insurable earnings in Box 24.9Canada Revenue Agency. Determine if a Benefit Is Taxable If those two boxes differ, this is usually why.
When to Expect the Slip
Your employer must issue your T4 and file with the CRA by the last day of February following the calendar year. For the 2025 tax year, the deadline is March 2, 2026, because February 28 falls on a Saturday.10Canada Revenue Agency. Employers’ Guide – Filing the T4 Slip and Summary If you haven’t received yours by mid-March, contact your employer. You can also check My Account on the CRA website, where T4 data appears once the employer’s filing has been processed.