Payroll Remittance

Payroll remittance is the process by which employers submit collected employee payroll deductions and employer contributions to the Canada Revenue Agency (CRA) and other government agencies.

Every time you process payroll, you withhold various amounts from employee paycheques—including federal and provincial income taxes, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. As an employer, you’re also required to contribute matching amounts for CPP and a portion for EI. These collected funds don’t belong to your business; you’re holding them in trust for the government and must remit them according to strict deadlines.

Payroll remittance is one of the most critical compliance obligations for Canadian employers. Missing deadlines or submitting incorrect amounts can result in penalties, interest charges, and potential audits from the CRA. Understanding your remittance schedule and obligations is essential for maintaining good standing and avoiding costly mistakes.

What’s Included in Payroll Remittance

When you make a payroll remittance to the CRA, you must include several components:

• Federal and provincial income tax: Amounts withheld from employees based on their TD1 forms and applicable tax rates
• Canada Pension Plan (CPP) contributions: Both the employee portion deducted from pay and the employer’s matching contribution
• Employment Insurance (EI) premiums: Employee deductions plus the employer portion (typically 1.4 times the employee amount)
• Quebec-specific deductions: For Quebec employees, Quebec Pension Plan (QPP), Quebec Parental Insurance Plan (QPIP), and provincial income tax remitted to Revenu Québec instead of the CRA

Understanding Your Payroll Remittance Schedule

The CRA assigns each employer a remitter type that determines how frequently you must submit payroll remittance payments. Your remitter type is based on your average monthly withholding amount (AMWA):

• Quarterly remitter: AMWA less than $3,000, with payments due by the 15th of the month following each quarter
• Regular remitter: AMWA between $3,000 and $24,999.99, with payments due by the 15th of the following month
• Accelerated remitter (threshold 1): AMWA between $25,000 and $99,999.99, requiring semi-monthly payments
• Accelerated remitter (threshold 2): AMWA of $100,000 or more, requiring remittances up to four times monthly

The CRA will notify you of your remitter type, but it can change as your payroll grows, so it’s important to monitor your status annually.

How to Submit Payroll Remittance Payments

Canadian employers have several options for submitting their payroll remittance:

• Online through your financial institution: Most banks offer CRA payment options through online banking
• CRA’s My Payment service: Pay directly through the CRA website using a Visa Debit, Debit Mastercard, or Interac Online
• Pre-authorized debit: Set up automatic withdrawals from your bank account
• Wire transfer or online banking: For large amounts through participating financial institutions

You must also file Form PD7A (Remittance Voucher) or submit payments electronically with your payroll program identifier to ensure proper crediting to your account.

Penalties for Late or Incorrect Payroll Remittance

The CRA takes payroll remittance obligations seriously. Late or missed payments result in penalties ranging from 3% for amounts one to three days late, up to 10% for repeated failures. Interest compounds daily on outstanding balances. Beyond financial penalties, chronic non-compliance can lead to director liability, where corporate directors become personally responsible for unremitted source deductions.

Staying compliant with payroll remittance requirements protects your business from penalties and ensures you meet your legal obligations as a Canadian employer. Understanding Canadian compliance requirements is essential for every business operating in Canada. Modern payroll software can automate calculations, track deadlines, and streamline the remittance process, reducing the administrative burden and minimizing the risk of costly errors. For businesses seeking additional support, payroll management outsourcing can provide expert oversight and ensure complete compliance with all remittance obligations.