8.3 Payments and Remittances

Meena K. Gupta; Gayle St. Denis; Ikram Ibrahim

Chapter 8: Payroll Remittances and Year-End Reporting

8.3 Payments and Remittances

8.3.1 Payments and Remittances

Payments are the compensation provided to employees for their services, encompassing wages, salary, bonuses, and other forms of monetary compensation. Remittances involve the transfer of withheld amounts and deductions from the employee’s paycheque to the relevant tax authorities or designated recipients. Remittances include income tax, employment insurance (EI) premiums, Canada Pension Plan (CPP) contributions, and other mandatory deductions. Employers must fulfill their remittance obligations to meet their legal responsibilities and ensure compliance with payroll regulations.

A payment is considered on time if the Canada Revenue Agency (CRA) or Revenu Québec (RQ) receives it on or before the next business day. If you do not remit on time, the applicable agency will charge a penalty and apply interest, depending on the amount deducted. Both the CRA and RQ also charge penalties for failure to file an information return by the due date.

Employers must provide the recipient with their slip and file the information return with the appropriate agency (CRA or RQ) on or before the due date. It is not considered late if the due date falls on a Saturday, Sunday, or a federal public holiday (Government of Canada, 2024b). The table below highlights the penalties for late remittance and late filing.

CRA Penalties and Interest for Late Remittance
Deducted Amounts	Penalties
CRA Penalties and Interest for Late Remittance
Over $500 but payment not sent to the CRA Over $500 but payment sent to the CRA late Under $500 and knowingly or under circumstances of gross negligence payment not sent to the CRA or sent late	3% if the payment is 1 to 3 days late 7% if the payment is 6 or 7 days late 10% if the payment is more than 7 days late or if no payment is remitted 20% if this is the second or subsequent time a payment is assessed in a calendar year if the failures were made knowingly or under circumstances of gross negligence
Penalties for Late Filing of Information Returns
Number of Information Returns Filed Late		Penalties
1 to 50		$10 to $1,000
51 to 500		$15 to $1,500
501 to 2,500		$25 to $2,500
2,501 to 10,000		$50 to $5,000
10,000 or more		$75 to $7,500
Penalties for Failing to File Information Returns Over the Internet
Number of Information Returns Filed Late		Penalties
6 to 50		$125
51 to 250		$250
251 to 500		$500
501 – 2,500		$1,500
2,501 or more		$2,500

^Notes:

^{Adapted from Government of Canada. (2024d). Remit (pay) payroll deductions and contributions: When to remit. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-due-dates.html}

^{Adapted from Government of Canada. (2025). Late-filing and failure to file the T5 information return. https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-a-service-provider.html}

8.3.2 Paying Employees

Picture of calculator on top of calendar. Pencil above calendar and pink piece of paper with percentage sign and the word plan written on it.

Paying employees correctly and on time is an important part of effective payroll management. Employers must calculate pay accurately and withhold all statutory deductions: federal/provincial or territorial income tax, CPP or QPP contributions, and EI or QPIP premiums.

In the Northwest Territories and Nunavut, employers must also withhold and remit the territorial payroll tax.

Employees in Québec complete both the federal TD1 (for CRA) and the Québec TP-1015.3-V (for Revenu Québec). If an employee wants additional income tax deducted, they should indicate the extra amount on both forms because deductions are remitted separately to the CRA and RQ.

Employees who choose to have more tax deducted from their remuneration should fill out a federal TD1 form for their employer to show how much more tax they want deducted.

The CRA can assess a penalty of 10% of the amount of the CPP, EI, and/or income tax that the employer did not deduct.

Employees who are not paid correctly or on time may take legal action against their employer. This can result in lawsuits for unpaid wages, damages, and claims for interest on any overdue amounts. Late or incorrect payments can also damage the employer-employee relationship, leading to a loss of trust, decreased employee morale, and potential employee turnover. These negative consequences can impact productivity and culture.

8.3.2.1 Third-Party Deductions: Health Insurance, Wage Garnishments, and Pension Fund Contributions

When it comes to health insurance, employers must ensure that they accurately calculate and deduct the appropriate premiums from employees’ wages and remit them to the designated health insurance provider.

Picture of a calendar with dates marked off using tacks. The 30th of the month is circled in red.

Employers may also encounter wage garnishments, which require deducting a portion of an employee’s wages to satisfy a legal obligation such as debt repayment, child support, or spousal maintenance. Employers must comply with all garnishment orders and accurately calculate and remit the withheld amounts to the appropriate authority.

Each province and territory in Canada has its own legislation governing the timing, priority, and remittance of garnishments. For instance, a regular creditor garnishment (e.g., repayment of a personal debt) may allow a short grace period before remittance, while a maintenance order (e.g., child or spousal support) typically requires immediate withholding and payment according to family maintenance enforcement legislation.

Employers must review and follow the applicable provincial or territorial rules to ensure garnishment amounts are deducted and remitted within the legally prescribed timelines.

Employers must also calculate and deduct the correct pension contributions from employees’ wages and remit them to the pension fund or retirement plan provider. There are strict rules on when both employee and employer pension contributions must be remitted—generally within 30 days following the month in which the contribution was taken. Always verify the timelines based on the pension plan type, such as defined benefit or defined contribution plans.

8.3.3 Remittances to the CRA and Revenu Québec

8.3.3.1 What Is Remitted

What is remitted to the CRA? Employers are responsible for deducting federal and provincial or territorial income tax from an employee’s wages. These deductions are based on the employee’s income and tax rates.

Both employers and employees are required to contribute to the CPP and EI programs. Employers deduct the employees’ portion of CPP contributions and EI premiums from their pay, then the employer’s and employees’ contributions are remitted to CRA.

The deducted amounts are remitted to the CRA according to the employer’s remitting frequency.

Northwest Territories and Nunavut tax is remitted to the Territories. For businesses in Québec, the province administers its own provincial pension plan called the Québec Pension Plan (QPP), as well as its own provincial income tax and the Québec Parental Insurance Plan (QPIP). Employers in Québec deduct QPP contributions rather than CPP contributions. The QPP, QPIP, and provincial tax deductions are remitted to Revenu Québec, whereas CPP, EI and federal tax deductions are remitted to the CRA (Revenu Québec, n.d.).

8.3.3.2 Methods of Payment

Employers are able to make remittances by a variety of methods, including online payment, cheque, or in person at the employer’s bank or financial institution (Government of Canada, 2024b). Cheques and payments made at the employer’s bank must be accompanied by a personalized remittance voucher. This remittance voucher is called a PD7A Statement of Account for Current Source Deductions, which must be ordered from the Canada Revenue Agency (CRA) (Government of Canada, 2024e).

In Québec, remittances are made to Revenu Québec (RQ) using specific forms that vary according to the employer’s remittance frequency, unlike the CRA, which uses a single form for all. Common RQ forms include:

RLZ-1.S-V – Summary of Source Deductions and Employer Contributions (annual summary submitted with RL-1 slips)
TPZ-1015.R.14.3 – Source Deductions and Employer Contributions: Payment Form (monthly or occasional remitters)
TPZ-1015.R.14.4 – Source Deductions and Employer Contributions: Payment Form (accelerated remitters)

Employers must select the correct form based on their assigned remittance frequency and ensure that payments for Québec income tax, QPP, QPIP, and the Health Services Fund are received by Revenu Québec on or before the due date.

8.3.3.2.1 Payment Options

Payments to the CRA may be made in the following ways:

In person at any Canadian bank, financial institution, credit union, or Canada Post outlet. The PD7A form must accompany the remittance
By online banking app or website using the Payroll Business Number and business bank account
Using “My Payment” with a credit or debit card, PayPal, or Interac e-transfer. My Payment is an electronic service to make payments directly to CRA using a bank access card (Government of Canada, 2024b)
By pre-authorized debit

8.3.3.2.2 External Payroll Provider (Outsourced)

Alternatively, employers have the option to use a third-party payroll provider. In this case, the outsourced payroll provider is responsible for paying employees and making the required remittances. External payroll providers include the following:

ADP
Ceridian
PaySimply
Payworks
Wave Payroll

A full list of external payroll providers can be found on the CRA website here (Government of Canada, 2024a).

8.3.3.3 Remittance Schedules

The employer’s remittance due date depends on their remitter type. The remitter type sets your remitting frequency, which affects the due dates based on your average monthly withholding amount (AMWA). Employers can view their remitter type on their “My Business Account” with CRA. Refer to the table below to determine the AMWA according to remitter type.

**Remitter Types Based on Average Monthly Withholding Amount (AMWA)**
Remitter Type	Average Monthly Withholding Amount (AMWA)
Quarterly remitters: New small employers	Not based on AMWA; the monthly withholding amount is $0 to $999.99, and you must have a perfect compliance history
Quarterly remitters: Account open for 12 months or longer	From $0 to $2,999.99, and you must have a perfect compliance history
Regular remitters	From $3,000.00 to $24,999.99, and for new employers who have not been notified by the CRA that they qualify for quarterly remitting.
Threshold 1 accelerated remitters	From $25,000.00 to $99,999.99
Threshold 2 accelerated remitters	$100,000.00 or more

^{Note: Adapted from Government of Canada. (2024d). Remit (pay) payroll deductions and contributions: When to remit. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-due-dates.html}

Québec Remitter Types and Due Dates

The following table outlines the due dates for each Québec remitter type as defined by Revenu Québec (2024). Remitters must ensure that payments for source deductions and employer contributions are received by RQ no later than the due date shown for their assigned frequency.

Remitter Type	Due Date for Remittance
Annual	On or before the last day of February following the calendar year covered by the remittance.
Quarterly	On or before the 15th day of the month following the end of each calendar quarter.`
Monthly	On or before the 15th day of the following month.
Twice-monthly	Deductions 1st–15th → due 23rd of the same month Deductions 16th–end → due 8th of the next month
Weekly	On or before the third working day following the end of the week to which the deductions apply.

Employers must confirm their assigned remitter type with Revenu Québec and adjust schedules if their remittance amounts change in subsequent years. Late or incorrect remittances can result in interest and penalty charges.

Employers are required to remit on time according to the remitter type schedule. The table below identifies due dates based on the remitter type.

**Remitting Frequency,** **Periods,** **and Due Dates by Remitter Type**
Remitter Type	Remitting Frequency	Remitting Period	Remittance Due Dates
Quarterly	Quarterly	January 1 to March 31 April 1 to June 30 July 1 to September 30 October 1 to December 31	April 15 July 15 October 15 January 15
Regular	Monthly	Calendar months	15th day of the next month
Threshold 1 accelerated	Up to twice a month	1st to 15th of the month 16th to end of the month	25th day of same month 10th day of the next month
Threshold 2 accelerated	Up to four times a month	1st to 7th of the month 8th to 14th of the month 15th to 21st of the month 22nd to the last day of the month	3rd working day after the 7th of the month 3rd working day after the 14th of the month 3rd working day after the 21st of the month 3rd working day after the last day of the month

^{Note: Adapted from Government of Canada. (2024d). Remit (pay) payroll deductions and contributions: Types of remitters.} ^{https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-more-information.html}

8.3.4 Provincial Health Taxes

Employers in five Canadian provinces are required to pay a tax based on the total annual wages of their employees. The revenue from these taxes is used to finance the health plans of the respective provinces. The provinces that enforce this payroll tax include British Columbia, Manitoba, Newfoundland and Labrador, Ontario, and Québec. Northwest Territories and Nunavut enforce provincial health care premiums on incomes, but the premiums are not classified as income tax. Refer to the table below for an overview of the health tax levies for each of the provinces.

Provincial Health Tax Levies

**Provincial Health Tax Levies**
Province	Payroll	Tax Rate	Due Dates
British Columbia	$500,000 or less	Exempt	June 15 September 15 December 15
	$500,001 to $1,500,000	2.925% × (BC remuneration – $500,000)
	Charities and non-profits: Exempt up to $1,500,000	2.925% on the amount exceeding $1,500,000
	$1,500,001 or more	1.95 × total BC remuneration
Manitoba	$2,250,000 or less	Exempt	15th of every month
	Between $2,250,000 and $4,000,000	4.3% on the amount over $2,000,000
	Over $4,000,000	2.15% of the total payroll
Newfoundland and Labrador	Less than $2,000,000	Exempt	20th of every month
Newfoundland and Labrador	$2,000,000 or more	2%	20th of every month
Ontario	$1,000,000 or less	Exempt	March 15th of the following calendar year
	$1,000,000 to $1,200,000	0.98%
	$1,200,000.01 to $1,230,000	1.101%
	$1,230,000.01 to $1,260,000.00	1.223%
	$1,260,000.01 to $1,290,000.00	1.344%
	$1,290,000.01 to $1,320,000	1.465%
	$1,320,000.01 to $1,350,000	1.586%
	$1,350,000.01 to $1,380,000	1.708%
	$1,380,000.01 to $1,400,000	1.829%
	$1,400,001 or more	1.95%
Québec	Primary and manufacturing sectors			According to the employer’s remittance frequencies for the year
	$1,000,000 or less	1.25%
	$1,000,001 to $7,199,999	0.7645 + (0.4855 × TP/1,000,000)
	$7,200,000 or more	4.26%
	All other employees excluding public sector
	$1,000,000 or less	1.65%
	$1,000,001 to $7,199,999	1.2290 + (0.4210 × TP/1,000,000)
	$7,200,000 or more	4.26%
	Public sector employees
	$1,000,000 or less	4.26%
	$1,000,001 to $7,199,999	4.26%
	$7,200,000 or more	4.25%

^{Note: Adapted from CanPay Software. (n.d.). Provincial payroll tax. https://www.canpay.com/payroll-information/provincial-payroll-tax.html}

8.3.5 Workers’ Compensation Boards

The remittance schedule for Workers’ Compensation Board (WCB) contributions vary by province and territory. Each province and territory has its own specific regulations and guidelines regarding remittance deadlines, which are typically monthly, quarterly, or annually. Detailed information can be found on the WCB website for each jurisdiction regarding deadlines, reporting requirements, and applicable payment methods. Refer to section 6.3 Employer Workers’ Compensation Premiums for additional information on the WCB.

References

CanPay Software. (n.d.). Provincial payroll tax. https://www.canpay.com/payroll-information/provincial-payroll-tax.html

Government of British Columbia. (2024). Employer health tax overview. https://www2.gov.bc.ca/gov/content/taxes/employer-health-tax/employer-health-tax-overview

Government of Canada. (2025). Late-filing and failure to file the T5 information return. https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-a-service-provider.html

Government of Canada. (2024a). Pay through a third-party service provider. https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-a-service-provider.html

Government of Canada. (2024b). Payments to the CRA: Pay at the counter (teller) at a bank or credit union. https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/pay-your-canadian-financial-institution.html

Government of Canada. (2024c). Remit (pay) payroll deductions and contributions: Types of remitters. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-more-information.html

Government of Canada. (2024d). Remit (pay) payroll deductions and contributions: When to remit. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-due-dates.html

Government of Canada. (2024e). Statement of account for current source deductions – Regular and quarterly remitters – PD7A. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-overview/statement-account-current-source-deductions-regular-quarterly-remitters.html

Government of Canada. (2023b). TD1 personal tax credits returns. https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns.html

Government of Canada. (2012). Guidelines for the processing of garnishments. https://www.tbs-sct.canada.ca/pol/doc-eng.aspx?id=25600

Manitoba.ca. (n.d.). The health and post-secondary education tax levy. https://www.gov.mb.ca/finance/taxation/taxes/payroll.html

Revenu Québec. (n.d.). Remitting source deductions and employer contributions. https://www.revenuquebec.ca/en/businesses/source-deductions-and-employer-contributions/remitting-source-deductions-and-employer-contributions/

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April Calendar (modified to remove word “Tax”) by Nataliya Vaitkevich, Pexels licence

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