Are your employees checking their paycheques – or their T4s?

Only 9% of Canadians feel confident about spotting errors with tax deductions on paycheques

BY Jim Wilson 31 Mar. 2025

While most Canadians rely on their employers to handle tax filing processes for them, many seem to believe that their company makes no mistake in handling payroll processes, according to a recent report.

Overall, 27% of Canadians say they don't feel the need to review their paycheque information as they assume their employer is correct when it comes to any deductions such as tax, employment insurance, and pension-related contributions, reports H&R Block Canada.

And only 13% who receive a paycheque say they pay attention to the details on their paycheque to ensure any deductions such as tax, insurance, and pension-related contributions are correct.

Canada’s payroll employment numbers slightly increased in January, but the country continues to face significant labour shortages, according to Statistics Canada (StatCan).

Why don’t Canadians check their paycheque?

A primary reason for why Canadians aren't reviewing their paycheques or T4 details might be because they're unsure what the accurate amounts and deductions should be, notes H&R Block Canada.

Overall, only 12% say they have a good understanding of their income tax bracket and how much should be deducted for tax purposes on each pay slip, according to the company’s survey of 1,790 Canadians members of the Angus Reid Forum, conducted Feb. 12-13, 2025.

Only 9% of Canadians say they feel confident that they would notice an error when it comes to tax deductions on their paycheques.

And while roughly 10 million Canadians taxpayers (65%) expect a refund this tax season, around 37% don't feel confident in knowing how to leverage all available tax credits and benefits they may be eligible for, to maximize their refund.

"We don't typically learn about how to interpret paycheques or how to maximize your tax return at school. It's important for Canadians to have the right conversations with the right people no matter what life stage they're at to better understand their pay and tax situation, whether that's at work or with a tax expert,” says Yannick Lemay, tax expert, H&R Block Canada.

At the industrial inquiry commission examining Canada Post’s financial position and workforce practices earlier this year, the issue of overtime was raised.

Correcting deduction or salary overpayment

Employers are not perfect, and they may commit payroll errors. According to the Canada Revenue Agency (CRA), employers may need to correct deduction error or salary overpayment in a previous tax year if these things happen:

You deducted more CPP contributions or EI premiums from the employee (overpayment).
You under-deducted CPP contributions or EI premiums from the employee (recovering).
You made an overpayment of salary, wages, or other remuneration to your employee and the employee does not repay you.
The employee did not perform their duties or the amount paid is more than 3 years after the end of the year in which the salary was overpaid.
You made a clerical, administrative, or system error and the amount paid is less than 3 years after the end of the year in which the salary was overpaid – Repayment of net salary
You made a clerical, administrative, or system error and the amount paid is less than 3 years after the end of the year in which the salary was overpaid – Repayment of gross salary

Details around addressing all these are available on the federal government website.

Previously, the Saskatchewan Health Authority (SHA) faced significant criticism due to payroll system failures that have affected healthcare workers across the province.