Reporting requirements

On April 29, 2021, the Ontario COVID-19 Worker Income Protection Benefit came into effect and the Employment Standards Act, 2000 was amended. Employers must provide employees with up to three days of paid infectious disease emergency leave if they miss work for certain reasons related to COVID-19. Amounts paid to an employee as a result of this program are employment income and have the same withholding requirements. For tax year 2021, report these amounts in box 14 of the T4 slip. Do not use code 77 of the T4 slip to report these amounts.

An employer may continue to pay an employee their regular wages or an advance or loan, before or after a claim is decided. There are two withholding and reporting policies for these types of payments. The one you choose will depend on the wording in the employee’s collective agreement or employment contract and how you manage the payments you make to your employee.

The two policies are:

Both policies apply to:

Approved claims

An employer may continue to pay an injured employee who is on a work-related leave of absence. If the employee’s agreement or contract does not refer to a workers’ compensation board, then the employer should treat the payments as regular salary. The employer would deduct CPP contributions, EI premiums and income tax as applicable. The earnings and deductions would be reported on the employee’s T4 slip at the end of the year in the usual way.

An employer who continues to pay an employee’s regular salary before and after a workers’ compensation board claim is decided cannot retroactively reduce earnings in the current year or amend a previous-year T4 slip and call the earnings workers’ compensation benefits. As a result, the employee has to report, in the year it is received, the salary they receive before and after a workers’ compensation board claim is decided.

Note

An employer cannot recover their share of the CPP and EI contributions since they cannot change the T4 slips or current-year payroll records.

Denied claims

If you included an amount in the employee's employment income in a previous year, the worker's compensation board denies the claim and the employee does not have to repay the employer, you do not have to withhold or report anything else.

If, on the other hand, the employee has to repay the employer when the claim is denied, then any repayments should be handled in the way discussed under Employee did not perform duties.

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