This issue has caused a lot of confusion before i explain i will define some important tax return terms and box Numbers on your T4;
Group RRSP = Employee contributed RRSP (pre tax) + Employer Matched RRSP (pre tax)
Box 14: Total pre tax Income (Income before tax = Sum of pre tax income on all your pay slip for the year + Bonus pay + employer matched RRSP). Note that employer matched RRSP is considered as an income to an employee.
Taxable Income: This is the amount of income subject to tax, after deductions (such as RRSP). Note that there is no line number on T4 slip for taxable income, the taxable income can only be determined at tax return stage.
Pay slip taxable income: Pre tax income on your pay slip - Employee contributed RRSP pre tax
Pay slip paid tax= Tax paid on Pay slip taxable income
Box 22: Income tax paid on all pay slip taxable income for the year (Sum of pre tax income on all your pay slip for the year - sum of Employee contributed RRSP for the year)
Box 22: Income tax paid = sum of Pay slip paid tax for the year
Tax deductions: are amounts you subtract from your total income, making your taxable income lower. This means you’d be charged taxes on a smaller amount of income (https://turbotax.intuit.ca/tips/popular-canadian-tax-benefits-deductions-and-credits-in-2023-14180). Note that RRSP are tax deductible
When you upload a T4 to turbo tax it will read box 14 and box 22, if you have contributed to group RRSP it will appear that you have underpaid your taxes as turbo tax does not have information on your Pay slip taxable income, therefore you have to input your group RRSP contribution (Employee contributed RRSP + Employer Matched RRSP ) as a deduction on turbo tax. Remember that your employer have included Employer Matched RRSP as an income on box 14. You can always try a dry run or simulation by uploading only T4 without any deduction or credit and you will see that it appears that you have heavily underpaid your taxes. (you can use this turbo tax quick calculator https://turbotax.intuit.ca/tax-resources/canada-rrsp-calculator.jsp)
