How A Leap Year And The Shortest Month Affects Your Accounting

Bookkeeping & General Taxes

Tax Report deadlines can be affected by a Leap Year as the deadline to file T4 and T5 is the last day of February which could fall on February 29 if it is a Leap Year. A T4 represents any Employment or Commission Income earned by an employer while the T5 is for any Investment Income. The T4 Summary is the total information for all T4s created for each employee for the calendar year.

The deadline for any contribution towards a Registered Retirement Savings Plan (RRSP) is always 60 days after December 31 for the previous year. The deadline for 2022 contribution would be March 1, 2023. But the deadline for 2023 contribution would be February 29, 2024, since 2024 is a Leap Year.

Trust Return

For a Trust the T3 Filing and Balance is due 90 days after tax year-end. If this falls on the Calendar Year End of December 31st, then this deadline would fall on March 30th instead of March 31st if the filling is required in a Leap Year. This includes filing all beneficiary’s trust relate information slips. If this is not filed or distributed by the due date, the trust is liable to a penalty.

 There is also a requirement for Trust to file and pay any balance of the final return 90 days after the wind-up date. This again could change depending, if it is a Leap Year that year and when the wind-up date is. For graduated rate estates the deadline is 90 days after the wind update, and the date of the final distribution of assets becomes the tax year end. Meaning a leap Year can affect this deadline making it March 30th rather than March 31st. If an Inter-Vivos Trust or Testamentary Trust is wound up, then the deadline is 90 days after the trust’s year end for the final T3 return and payment of any balance owing.

Payroll

A Leap Year affects a company’s payroll depending on what day of the week February 29th falls on and the pay frequency. If February’s additional day (Feb 29th) falls on a weekday such as Monday and your company pays employees weekly or biweekly a Leap Year can affect your payroll.

Weekly employees receive a paycheck 52 times per year (because there are 52 weeks in a year). A weekly employee will receive 53 paychecks in a Leap Year if the year starts on a Wednesday. This is also the same for bi-weekly employees who will receive 27 paychecks in a Leap Year instead of the usual 26.

The Leap Year can also affect the WCB payroll report (annually or quarterly) depending on the company’s annual payroll amount and classification unit. Companies generally pay premiums if the premiums are less than $2,000 per year and the due date for the Annual Payroll Report and Payment is February 28. If a company expects to pay more than $2,000 in premiums per year, then its premium reporting and payments are made quarterly.