If you received retroactive pay in 2025, it’s a good idea to understand how it will show up on your 2025 T4 – and what that could mean for your year-end planning.

Retroactive pay is taxable in the year it’s paid, not the year it was earned. This means any retro payment issued in 2025 will be included in your total employment income (Box 14) on your 2025 T4. Depending on the amount, it could affect your tax payable, RRSP contribution planning, or eligibility for certain credits and benefits.

The good news is you don’t have to wait for your T4 to get a sense of your total income. Your final paycheque of the calendar year is usually the easiest place to start. The year-to-date (YTD) earnings shown on that pay statement typically reflect everything you were paid during the year, including retroactive pay and any taxable benefits which are included as income. You can review your final paycheque in PeopleSoft > Employee Self Service > Payroll > Paycheques.

Why this matters

Having a clearer picture of your income now can help you:

  • Decide whether to make or adjust RRSP contributions
  • Plan for any tax you may owe
  • Avoid surprises when your T4 is issued

If you’re unsure how retroactive pay affects your personal situation, you may want to speak with a financial or tax advisor.

Important dates to know

  • T4s will be available in PeopleSoft > Employee Self Service on or before February 28, 2026 (you’ll receive an email when it’s ready)
  • RRSP deadline for the 2025 tax year: March 2, 2026

A little preparation now can make tax season feel much easier later. If you have questions about your pay or need help navigating PeopleSoft, please contact biweeklypay@macewan.ca.

From Human Resources