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Late Payroll Remittances

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Business -> Late payroll remittances

Late Payroll Remittance Penalties

You will be charged high penalties if your payroll tax remittances are late, so make sure you set up a system to ensure they are paid on time.  The penalty amounts are extremely high. See the Canada Revenue Agency (CRA) web page on penalties, interest, and other consequences.

CRA also charges penalties for failing to deduct or withhold payroll taxes as required.  The minimum penalty is 10%, and 20% will be charged when the failure to deduct was made knowingly or because of gross negligence.

Payroll remittance thresholds changed starting with 2015 payroll deductions, except for quarterly remitters with an average monthly withholding amount (AMWA) of less than $3,000 in the first or second preceding year, with a perfect compliance history.  The payments for quarterly remitters must be received by CRA on or before the 15th of January, April, July, and October, for withholdings from amounts paid to your employees during the previous quarter.

If you are new employer, your monthly withholding amount is less than $1,000, and you have a perfect compliance history, you are a quarterly remitter.  Otherwise, you are considered a regular remitter.  If you are a new employer in 2017, or your AMWA two years ago was less than $25,000 (previously less than $15,000), your payroll deductions must be received by CRA on or before the 15th day of the month after the month you paid your employees.

There are two levels of accelerated remitters - again, using the AMWA from two calendar years ago.

For 2017 payroll deductions, if your AMWA for 2015 was:

bullet$25,000 to $99,999.99 (previously $15,000 to $49,999.99), threshold 1 applies to you.  Your deductions for the first 15 days of the month are due by the 25th of the month.  Your deductions for the 16th to the end of the month are due by the 10th day of the following month.
bullet$100,000 or more (previously $50,000 or more), threshold 2 applies to you.  Your deductions must be remitted through a Canadian financial institution so that they are received by CRA within three working days following the last day of the following pay periods:
bulletthe 1st through the 7th of the month;
bulletthe 8th through the 14th of the month;
bulletthe 15th through toe 21st of the month; and
bulletthe 22nd through the last day of the month

Note that the due dates for remittances are based upon the date your employees are actually paid.  For instance, if your employees are paid on January 2, 2017 for the hours worked from December 15 to 31, 2016, and you are a quarterly remitter, the deductions from the January 2nd payment are not due to be remitted until April 15, 2017.  Also, those wages will be on a 2017 T4 for the employees, NOT on a 2016 T4.

Your payroll remitting requirements can be seen through CRA's My Business Account.

CRA Resources:

Payroll

Summary of Remitter Types 

Tax Tip:  Be organized, and ALWAYS remit your payroll taxes on time.  Better to pay a day early than to be late!

Revised: May 23, 2018

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