T4PS: Statement of Employees Profit Sharing Plan Allocations and Payments

Your employer will issue you a T4PS slip reporting how much you received in employee profit sharing plan (EPSP) allocations during the year. If you’re a resident of Québec, these amounts will be shown on a Relevé 25 slip instead.

In a profit sharing plan, an employer shares profits with some or all of their employees. These profits can be shared in a number of different ways, including:

  • Dividends
  • Capital gains or losses
  • Foreign income (business and non-business)
  • Other income
  • Foreign capital gains or losses

Since you’re taxed on your profit sharing plan allocations every year, amounts that are withdrawn from the fund when you retire or leave the company won’t be taxed a second time. Generally, allocations are taxed as employment income but aren’t pensionable or insurable. If you received EPSP allocations in other forms, such as capital gains or dividends, these amounts are taxed accordingly.

Note: If you’re a specified employee (meaning you don’t deal at arm’s length with your employer or have significant equity interest in them), you’ll have an amount in box 41 of your paper T4PS. If it’s more than 20% of your annual income, you might have to pay additional tax. Refer to the Canada Revenue Agency (CRA) website for information on how excess EPSP amounts are taxed.

Yes. When you are entering your T4PS slip information into the tax software, some fields can have a positive or negative value. For example, Capital gains (positive) or losses (negative) are entered into box 34. To enter a negative value in this situation, add a minus sign (‘-‘) before the numbers.

Follow these steps in H&R Block’s 2023 tax software:

  1. On the left navigation menu, click the Government slips tab, then Smart Search.
  2. Type T4PS in the search field and either click the highlighted selection or press Enter to continue.

  3. When you arrive at the page for your T4PS, enter your information into the tax software.