T4 or T4A? Who pays the second half of CPP
Yan Zhou (周艳) · Licensed Life & Health Insurance Agent, Financial Services Regulatory Authority of Ontario (FSRA)
The short version
- T4 means employee, T4A usually means self-employed. It is decided by the working relationship, not by preference.
- On a T4A you pay both halves of CPP — up to $8,460.90 in 2026 against $4,230.45 for an employee.
- T4A income lets you deduct business expenses. T4 income mostly does not.
- Nothing is withheld from a T4A, so the whole bill arrives at once.
If something here applies to you, just ask me. Plain answers, no sales pitch.
(General tax information only. It is not tax advice. Circumstances differ — check the CRA website or speak to a qualified accountant before you act.)
The question is usually asked backwards
“Should I take a T4 or a T4A?” is not really a choice you get to make.
Which slip is correct depends on the relationship. If the payer sets your hours, provides the equipment and directs how the work is done, that is employment and it should be a T4.
If you decide how the work gets done, use your own tools, can take other clients, and carry the risk of a job going wrong, that looks like self-employment.
Getting it wrong is mostly the payer’s problem: if CRA reclassifies the relationship, the employer owes the missed contributions.
What actually differs
| Item | T4 (employee) | T4A (usually self-employed) |
|---|---|---|
| CPP | Half you, half the employer | Both halves you |
| Tax withheld | Every pay cheque | Nothing withheld |
| Expenses | Rarely, and needs a signed form | Yes, on a T2125 |
| EI | Paid, and claimable | Generally neither |
| Benefits | Usually some | Usually none |
How much is the CPP difference?
For 2026, maximum pensionable earnings are $74,600 and the rate is 5.95%.
An employee pays at most $4,230.45. Someone self-employed pays at most $8,460.90.
The gap: $8,460.90 − $4,230.45 = $4,230.45.
Which is why a contract rate has to sit meaningfully above the equivalent salary before it breaks even. People usually discover this in their first filing year.
Source: CRA, “CPP contribution rates, maximums and exemptions”, checked 11 August 2026.
On a T4A, do these three things
- Set money aside from every payment. Do not leave it until April.
- Keep receipts from day one. Expenses genuinely reduce what you owe.
- Watch for $30,000 in sales — see Do I need to register for GST/HST?
The filing mechanics are in How self-employment is taxed in Ontario.
If something here applies to you, just ask me. Plain answers, no sales pitch.
(General tax information only. It is not tax advice. Circumstances differ — check the CRA website or speak to a qualified accountant before you act.)
