Pay by pre-authorized debit
Pre-authorized debit (PAD) is a secure, online, self-service payment option for individuals and businesses. This option lets you set the payment amount you authorize the Canada Revenue Agency (CRA) to withdraw from your Canadian chequing account to pay your taxes on a date, or dates, you choose.
Due to the processes that must take place between the CRA and the financial institution, the taxpayer’s selected payment date must be at least five-business-days from the date their PAD agreement is created or managed. See Federal holidays for a list of non-business days.
See Chart of available payment methods to view which payments can be made by pre-authorized debit.
There is a ‘pay by pre-authorized debit’ option through GST/HST netfile available for an amount owing.
A PAD agreement can only be done online and not over the phone.
Creating a pre-authorized debit using EFILE
Individual taxpayers can now authorize their electronic filer to set up a pre-authorized debit (PAD) agreement on their behalf to make a ‘one time’ payment for an amount owing. PAD agreements, set up by an electronic filer, are for the current tax year only and cannot be used for instalments or T2 returns.
Electronic filers will have taxpayers complete and sign Part C of Form T183, authorizing them to submit a PAD agreement on behalf of the taxpayer. The signed T183 must be retained by both the taxpayer and the electronic filer.
The PAD information is transmitted to the Canada Revenue Agency (CRA) via a secure web service with certified EFILE software. Go to EFILE certified software for a complete list.
Once the electronic filer transmits the PAD information to the CRA successfully, they will receive a web message. This message will contain the PAD transmission confirmation number, payment amount, and date of processing. The electronic filer must retain the PAD transmission confirmation number for their record. The PAD confirmation number and the confirmation number received when filing a return are separate.
The PAD option in EFILE is available to accept payments from the start of the Individual tax filing season until December 31st of each calendar year.
Steps to create a Pre-authorized debit agreement for individuals
To create a PAD you have to be registered for My Account. Click on ‘CRA register’ or ‘Continue to Sign-In Partner’ and complete the steps. Once completed, you will have limited access to My Account which will allow you to create a PAD right away by selecting the ‘Pay by pre-authorized debit’ link on the left side bar.
Your official access code will be sent to you by mail. Once you enter the access code into My Account you will have full access, which allows you to view, modify, cancel, or skip a payment.
Steps to create a Pre-authorized debit agreement for businesses
To create a PAD you have to be registered for My Business Account. Click on ‘CRA register’ or ‘Continue to Sign-In Partner’ and complete the steps. Once completed, your official access code will be sent to you by mail. Once you enter the access code into My Business Account you will have full access, which allows you to view, create, modify, cancel, or skip a payment.
Avoid late fees
You are responsible for making sure the CRA receives your payment by the payment due date. If you are using a third-party service provider, you must clearly understand the terms and conditions of the services you are using.
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