T4 Code 66 — Eligible retiring allowance
Severance eligible for transfer to an RRSP without RRSP room — limited to $2,000 per year of pre-1996 service.
At a glance — Code 66
- Box name
- Eligible retiring allowance
- T1 line
- Line 13000 — Other income
- Check against
- Your years of service with the employer before January 1, 1996 (and 1989 for the second tier).
What Code 66 means
Code 66 is the "eligible" portion of a retiring allowance (severance or termination pay). It can be transferred directly to an RRSP without using RRSP contribution room, subject to the eligible-amount cap.
Cap: $2,000 for each year or part-year of service before 1996, plus $1,500 for each year or part-year before 1989 in which none of the employer's pension plan or DPSP contributions had vested in the employee by the time the retiring allowance was paid. Service after 1995 does NOT generate eligible amount — making Code 66 increasingly rare for younger workers.
The non-eligible portion (service after 1995, or amounts above the cap) appears on Code 67 and counts as regular income.
Tax return implications
- The Code 66 amount is reported at Line 13000 whether or not it was transferred — the employer fills in Code 66 either way.
- On a direct transfer the employer withholds no income tax on the transferred portion, and the offsetting deduction cancels the income out. An amount transferred to your RRSP is deducted at Line 20800, with the transfer written on line 24640 of Schedule 7; an amount transferred to your RPP is deducted at Line 20700 instead.
- Reduces immediate tax — often the single biggest tax-planning opportunity in a severance package.
FAQ
Can I still get an eligible retiring allowance if I started working after 1995?
Usually no. The eligible portion requires years of service before 1996. Workers who joined after 1995 will have $0 under Code 66 and the full severance under Code 67 (non-eligible).
Related T4 boxes
Code 67 — Non-eligible retiring allowance
Severance portion not eligible for direct RRSP transfer — fully taxable, but may still use regular RRSP room.
Code 71 — Indian Act (exempt income) – Employment
Employment income exempt from tax under §87 of the Indian Act — reported for information only, not added to taxable income.
Code 77 — Workers' compensation benefits repaid to the employer
WCB top-up you repaid to your employer — creates an offsetting deduction at Line 22900.
Box 14 — Employment income
Your total gross employment income for the year before any deductions — salary, wages, bonuses, commissions, taxable benefits and most other pay.
Filing your return? Use the payroll deductions calculator to verify the amounts on your T4 match expected CPP, EI and income tax withholdings, and the income tax calculator to estimate your refund or balance owing.
Not sure how much your employer owes you? Box 66 only reports the severance/retiring allowance your employer already decided on. Check that figure against the statutory termination & severance pay calculator (Ontario, BC, Alberta, and federal legal minimums) before you sign anything.
Sources
T4 box definitions from CRA T4 employer guide. Rates and thresholds current for 2025; file your 2025 T1 by April 30, 2026 (self-employed June 15).
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