What is payroll remittance in Canada?

Payroll remittance in Canada refers to the process of sending the required source deductions, including income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums, to the Canada Revenue Agency (CRA) after paying compensation or benefits to employees. Employers are responsible for withholding these deductions from employees' wages and remitting them to the CRA.

What types of remuneration are subject to payroll remittance?

Payroll remittance includes various forms of compensation and benefits paid to employees that are subject to deductions required by law. This encompasses salaries, wages, commissions, taxable benefits, and pension income.

How do employers make a payroll remittance in Canada?

To make a payroll remittance in Canada, employers need to follow these steps:

• Calculate the required source deductions, including income tax, CPP contributions, and EI premiums, based on employees' earnings.
• Deduct these amounts from employees' paychecks.
• Remit the deducted amounts, along with the employer's share of CPP and EI contributions, to the CRA by the specified due dates.

How often should employers remit payroll deductions to the CRA?

The frequency of payroll remittance depends on the employer's remitter type, which is determined by their average monthly withholding amount (AMWA) from the two calendar years prior to the current reporting period. The remitter types include:

• New remitter: Payments are due on the 15th of the month.
• Regular remitter: Payments are due on the 15th of the month.
• Accelerated remitter: Due dates vary based on the type, either the 25th of the month or the third business day after payroll processing.
• Quarterly remitter: Payments are due on or before April 15th, July 15th, October 15th, and January 15th for payrolls processed in the previous quarters.

What are the consequences of failing to remit payroll deductions on time in Canada?

Failing to remit payroll deductions to the CRA on time can result in penalties and interest charges. Employers are required to meet their remittance obligations to avoid potential legal consequences.

How can employers ensure accurate and timely payroll remittances?

Employers can maintain accurate and timely payroll remittances by:

• Properly calculating source deductions.
• Ensuring compliance with CRA regulations.
• Adhering to the remittance due dates based on their remitter type. Using payroll software or services to streamline the remittance process.

Where can employers find more information on payroll remittance in Canada?

Employers can access detailed information and guidelines on payroll remittance in Canada through the Canada Revenue Agency's official website or by consulting with tax professionals or payroll experts.