Depending on the amount of your payroll remittance you may have some options as to when you are required to remit it to CRA.
Regular Payroll Remittance
You are a regular remitter if you are a new employer or your average monthly withholding amount (AMWA) two years ago was less than $25,000. In this case you are required to have your payroll remittance to CRA on or before the 15th of the month following the month you paid your employees.
Quarterly Payroll Remittance
This option is available to new small employers or to existing companies who have had their payroll account for at least a year and meet certain criteria.
New small employers
You qualify for quarterly payroll remittance for the first year if your monthly withholding amount is less than $1,000 and you have a perfect compliance history. Perfect compliance history means that over a 12 month period, you have made all deductions and payroll remittances on time, have paid and filed your GST on time and have filed your T4 information returns on time.
All payments made after the due date may be charged a 3% to 10% penalty
Existing small employers
To qualify for quarterly payroll remittance you have to have an average monthly withholding amount of less than $3,000 in either the first or second preceding calendar year and have a perfect compliance history as explained above.
If you qualify for quarterly payroll remittance, CRA must receive your payroll remittance on or before the 15th day of the month immediately following each quarter. Quarters are: January to March; April to June; July to September and October to December.
Accelerated Payroll Remittance Threshold 1
This includes employers who had a total average monthly withholding amount of $25,000 to $99,999 two calendar years ago. Note that if a corporation is associated with one or more corporations in the current year, and the total AMWA of all the associated corporations was $25,000 or more two years ago, CRA considers all the associated companies to be accelerated remitters. The same rule applies to companies with more than one payroll account such as RP0001 and RP0002. If the AMWA was $25,000 or more two years ago, CRA considers both accounts to be accelerated remitters.
If you are an accelerated remitter threshold 1, CRA must receive your deductions by the following dates:
For remuneration paid in the first 15 days of the month, remittances are due by the 25th day of the same month.
For remuneration paid from the 16th to the end of the month, remittances are due by the 10th day of the following month.
Accelerated Payroll Remittance Threshold 2
This includes employers who had a total average monthly withholding amount of $100,000 or more two calendar years ago. Note that if a corporation is associated with one or more corporations in the current year, and the AMWA of all the associated corporations was $100,000 or more two years ago, CRA considers all the associated companies to be accelerated remitters. The same rule applies to companies with more than one payroll account such as RP0001 and RP0002. If the AMWA was $100,000 or more two years ago, CRA considers both accounts to be accelerated remitters.
Amounts deducted from remuneration paid at any time during the month must be received by your Canadian financial institution no later than the third working day after the end of the following periods:
- From the 1st through the 7th day of the month
- From the 8th through the 14th day of the month
- From the 15th through the 21st day of the month
- From the 22nd through the last day of the month
(For example, for a payday that falls on Friday June 17th, the remittance due date would be June 22nd, three working days after the payday.)
Note: Employers In this category MUST pay their payroll remittance at their financial institution. Payments made on the due date but not at a financial institution may be charged a penalty of 3% of the amount due. All payments made after the due date may be charged a 3% to 10% penalty, depending on how many days late the payroll remittance is.
If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.
Thanks to Haley Bistretzan of KWB Chartered Accountants for providing this content.
Haley has been working part time for KWB since April, 2013. She received her CGA designation in 1998 and worked in public practice for several years before taking time off to be home with her children. During that time she provided bookkeeping services to small businesses but was happy to return to public practice. While still doing some work in corporate year end accounting and tax Haley’s work is focused on managing KWB’s bookkeeping team and working to provide excellent online cloud based accounting services to clients.
Haley is married and has three children. She loves reading, enjoys camping, kayaking, hiking and travelling to ride roller coasters. Volunteering at the West Edmonton Mall Chapel has provided her with an opportunity to meet a variety of people from all walks of life.