How to Stay Compliant with CRA Payroll Remittances (And Avoid Costly Penalties)
If you run a small business in Canada and have employees on payroll, the CRA expects you to remit payroll deductions on time — every single time. Miss a deadline, and you're looking at penalties, interest charges, and potentially a CRA audit.
The good news? Staying compliant is completely manageable once you understand how the system works. In this guide, we break down everything you need to know about CRA payroll remittances — what they are, when they're due, and how to avoid the most common mistakes small business owners make.
What Are CRA Payroll Remittances?
When you pay employees, you're required by law to withhold three types of deductions from their wages:
- CPP (Canada Pension Plan) contributions
- EI (Employment Insurance) premiums
- Federal and provincial income tax
You don't keep this money — you send it to the CRA on behalf of your employees. This is called a payroll remittance. On top of what you withhold from employees, you also contribute the employer's share of CPP and EI out of your own pocket.
When Are Payroll Remittances Due?
The remittance schedule depends on your average monthly withholding amount (AMWA) from two years ago:
| Remitter Type | Average Monthly Withholding | Due Date |
|---|---|---|
| New employer | Less than $1,000/month | 15th of the following month |
| Regular remitter | $1,000 – $24,999/month | 15th of the following month |
| Quarterly remitter | Less than $3,000/month (eligible) | 15th after each quarter |
| Accelerated Tier 1 | $25,000 – $99,999/month | Within 3 days of payroll |
| Accelerated Tier 2 | $100,000+/month | Next business day |
Most small businesses in Ontario fall under the regular or quarterly category. If you're unsure which one applies to you, the CRA will notify you — but it's worth double-checking your account in My Business Account on the CRA portal.
What Happens If You Miss a Remittance?
Missing a remittance deadline is one of the most expensive mistakes a small business owner can make. The CRA charges:
- 3% penalty if payment is 1–3 days late
- 5% penalty if 4–5 days late
- 7% penalty if 6–7 days late
- 10% penalty if more than 7 days late
- 20% penalty for repeat offenders or wilful non-compliance
And that's before the daily compound interest kicks in. Directors of corporations can even be held personally liable for unpaid remittances — even after the company is dissolved.
⚠️ Quick tip: A one-week delay on a $5,000 remittance can cost you $350 in penalties alone — before interest.
5 Common Payroll Remittance Mistakes to Avoid
- Miscalculating deductions: Using the wrong CPP or EI rates.
- Paying with the wrong account number: Use your Business Number (BN) + RP account number.
- Forgetting about new hires or raises: Every time you change payroll, your deductions change.
- Missing the year-end T4 deadline: Remittances are tied to your T4 filings.
- Treating remittances like optional cash flow: This is a fast way to accumulate CRA debt and personal liability.
How to Stay Consistently Compliant
- Set calendar reminders for every remittance due date.
- Reconcile payroll deductions after every pay run.
- Use a dedicated bank account for payroll deductions.
- Log into My Business Account monthly to confirm payments.
- Work with a payroll specialist who monitors CRA account activity.
What to Do If You Already Have a CRA Payroll Issue
If you've already missed remittances, don't ignore it. The CRA is more willing to work with businesses that come forward proactively:
- Voluntary Disclosure Program (VDP): You may qualify for penalty relief.
- Payment arrangement: Call the CRA business line to set up a plan.
- CRA representation: A professional can negotiate on your behalf.
💡 At MaxRefund Business, we help small businesses across Canada resolve CRA issues and get their payroll back on track.
Get CRA Support Today →Final Thoughts
CRA payroll remittances aren't optional. If payroll is starting to feel like a full-time job, that's a sign it's time to delegate it to someone who handles it every day.
Frequently Asked Questions
Can I remit payroll deductions online?
Yes. Remit through your bank's portal or My Business Account.
What if I have no employees for a pay period?
You must still file a nil remittance to inform the CRA.
Are self-employed contractors subject to payroll remittances?
No. However, misclassifying an employee is a common audit trigger.
How far back can the CRA audit?
Generally 3–4 years, but indefinitely for fraud or gross negligence.
Does MaxRefund Business handle payroll remittances?
Yes. We manage full payroll processing for small businesses across Canada.
Learn about our Payroll Services →MaxRefund Business provides online bookkeeping, payroll, and tax services for small businesses across Canada. All content is for informational purposes only and does not constitute legal or tax advice.
