Why Payroll Remittances Matter

When you deduct taxes and contributions from your employees’ paycheques, that money isn’t yours to keep. You’re simply collecting it on behalf of the Canada Revenue Agency.

If you don’t send those funds in on time, the CRA treats it as a serious breach of trust. Even small businesses can face penalties, interest, and additional scrutiny — all because of a missed or late remittance.

The good news is that staying compliant is simple once you understand how the schedule works.

How Often You Need to Remit

Most small businesses fall into the “regular remitter” category, which means you must send your deductions to the CRA by the 15th day of the month following the month you paid your employees.

For example, if you processed payroll anytime in March, your remittance is due by April 15.

Larger employers with higher payroll totals may have to remit more frequently — sometimes twice a month or even within three business days of each pay date. But for most new or small employers, a single monthly payment is all that’s required.

How to Make Your Remittance

There are a few ways to send your payroll deductions to the CRA:

1. Online through your business bank account. Most banks have a “Pay Business Taxes” or “CRA Payments” option. You’ll select “Payroll Deductions – RP” and enter your total.
2. Through your CRA My Business Account. You can log in, view your account balance, and make a payment directly.
3. By mail, using a remittance voucher (PD7A) and cheque. This method is slower and less common now, but still accepted.

Always confirm that your payment is applied to your payroll (RP) account, not your GST or corporate tax account. The CRA assigns separate codes for each, and a mix-up can cause delays or misapplied payments.

What to Include in Your Remittance

Your total remittance each month should include:

• The income tax you withheld from employees
• Both the employee and employer shares of CPP contributions
• Both the employee and employer shares of EI premiums

In other words, you’re sending everything you deducted — plus your matching portions for CPP and EI — all in one combined payment.

Here’s an example in plain terms:
Let’s say you ran payroll for two employees and withheld $900 in income tax, $260 for CPP, and $75 for EI. You’ll add your employer portions — another $260 for CPP and about $105 for EI — for a total remittance of roughly $1,600 to the CRA.

When Things Go Wrong

The CRA’s penalty system for late or missing remittances is steep. Even being one day late can trigger a charge.

The penalty starts at 3% for payments one to three days late, 5% for four or five days, 7% for six or seven days, and 10% for anything beyond that. Repeated offences can lead to penalties as high as 20%, plus daily compound interest.

In short: it’s cheaper to overpay slightly and adjust later than to miss a deadline.

How to Stay on Track

To avoid mistakes:

• Mark your CRA due dates in your bookkeeping calendar.
• Reconcile your payroll liability accounts after every pay run.
• Use payroll software or your bookkeeper to generate reports that match your CRA payments.
• If cash flow is tight, still remit the deductions portion first — because that money was never yours to begin with.

It’s far better to pay on time and adjust a small overpayment than to pay late.

The Takeaway

Payroll remittances aren’t just another business expense — they’re a responsibility.
The CRA expects accuracy and punctuality, and the penalties for falling behind are too costly to ignore.

When you understand the system and stick to a routine, remitting payroll becomes one of the easiest parts of running your business.

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