How and when to pay (remit) source deductions – Due date

Nicole is a quarterly remitter. She pays employees in January, February and March. January’s first pay includes wages for part of December. Since she pays this remuneration between January 1 and March 31, the CRA must receive her remittance by April 15.

Yasmina is a regular remitter. On January 1, she pays an employee for December of last year. Since she pays this remuneration in January, the CRA must receive her remittance, by February 15.

Paolo’s company is a threshold 1 accelerated remitter. On March 10, 2017, he pays his employees for work done in February. Since he pays this remuneration between March 1 and March 15, the CRA would normally have to receive his remittance by March 25, 2017. However since March 25, 2017 is a Saturday, his due date is March 27, 2017.

XYZ Company is a threshold 2 accelerated remitter. It pays employees twice in May 2017, as follows:

The company pays remuneration on May 4, 2017. This is between May 1 and May 7.  The CRA must receive the company’s remittance by May 10, 2017, which is the 3rd working day after May 7, 2017.

The company also pays remuneration on May 18, 2017. This is between May 15 and May 21. Since Monday May 22 is a public holiday recognized by the CRA, the CRA must receive the company’s remittance by May 25, 2017. This is the third working day after 21st.

To avoid a penalty for not sending the deductions through a financial institution even if it remits on time, XYZ Company’s payroll clerks always remit online or in person at a financial institution.

More details on due dates

When you have to remit depends on your remitter type and on when you pay or give remuneration. When you remit, you need to indicate your remitting period end date.

Important information about due dates

• You are responsible for making sure the CRA receives your remittance on or before your due date. This applies regardless of your remittance method. You should:
  • Confirm the processing standards and transaction cut-off times of your financial institution or third-party service provider, if you remit using one of these methods.
  • Allow more time than usual if you remit by mail. Postmarks are not evidence of the date of receipt.
• If your due date falls on a Saturday, a Sunday, or a public holiday recognized by the CRA, your remittance is on time if the CRA receives it on the next business day.
• The CRA can charge penalties and interest if you do not remit as and when required.
• For information on how to correct misapplied payments, go to Looking for a payment.
• For information on how to correct remitting errors, go to How to correct remitting errors.
• Make your last remittance of the year by its respective remittance due date. If you wait until your information returns are due, you may be charged penalties and interest.

Due dates for quarterly remitters

If you are a quarterly remitter, including an eligible new small employer, your remittance due date is the 15th of the month after the calendar quarter in which you pay or give remuneration.

The calendar quarters, and your due dates, are:

• January to March: due by April 15
• April to June: due by July 15
• July to September: due by October 15
• October to December: due by January 15

See Example 1.

Due dates for regular remitters

If you are a regular remitter, your remittance due date is the 15th of the month after you pay or give remuneration. See Example 2.

Due dates for threshold 1 accelerated remitters

If you are a threshold 1 accelerated remitter, your remittance due dates are:

• the 25th of the month for remuneration that you pay or give from the 1st to the 15th of the month inclusive; and
• the 10th of the next month for remuneration that you pay or give from the 16th to the last day of the month.

See Example 3.

Due dates for threshold 2 accelerated remitters

If you are a threshold 2 accelerated remitter, your remittance due date is the third working day (not counting Saturdays, Sundays, or public holidays recognized by the CRA) after the end of the following periods:

• from the 1st to the 7th day of the month, inclusive;
• from the 8th to the 14th day of the month, inclusive;
• from the 15th to the 21st day of the month, inclusive; and
• from the 22nd to the last day of the month, inclusive.

See Example 4.

Due dates when your business status changes

You must make your final remittance within 7 days from the date of any of the following:

• you stop operating your business or the partner or sole proprietor dies;
• you change your legal status;
• you become bankrupt or enter receivership; or
• you restructure, reorganize, or amalgamate.

For more information on these changes and your responsibilities, go to Changing your business status.

The Average monthly withholding amount (AMWA)

Generally, the CRA bases your remitter type on your average monthly withholding amount (AMWA), from two calendar years ago. If you are a new employer, read about the monthly withholding amount. Each year, the CRA reviews your AMWA. If your remitter type changes, it will let you know in writing.

If applicable, the CRA will also look at your compliance history to see if you qualify as a quarterly remitter.

Your AMWA is the total of all the Canada Pension Plan (CPP), employment insurance (EI), and income tax you had to remit for the year, divided by the number of months (maximum 12) that you had to remit for.

If you had more than one payroll program (RP) account two calendar years ago, or if you are an associated corporation, the CRA will calculate your AMWA as though you had one combined account.

Quarterly remitters

New small employers

If you are a new small employer, you may be able to remit quarterly instead of monthly. You do not have to apply. Remit quarterly unless the CRA tells you, on your statement of account, that you have to remit at a different frequency.

To qualify, you must meet the both of the following conditions:

• each month, your monthly withholding amount (MWA) must be less than $1,000
  
• you must maintain a perfect compliance history on all your GST/HST (RT) and payroll (RP) program accounts

Your MWA is the amount you would have to remit for a month if you were a regular remitter. If you are an associated corporation, the combined MWA of your corporation and your associated corporations must be less than $1,000.

You have a perfect compliance history if, over a 12-month period, you do all of the following:

• remit all your source deductions on time
• file all your T4 type information returns on time
• have paid all your goods and services tax/harmonized sales tax (GST/HST) on time
  
• have filed all your GST/HST returns on time

Quarterly remitters

Small employers

You may have the option to remit quarterly if your payroll program (RP) account has been opened for 12 months or longer. If you are a new employer, see New small employer.

To qualify, you need:

• an average monthly withholding amount (AMWA) of less than $3,000 either one or two calendar years ago; and
• a perfect compliance history.

You have a perfect compliance history if, over the last 12 months, you have:

• remitted all your source deductions on time
• paid all your goods and services tax/harmonized sales tax (GST/HST) on time
  
• filed all your T4 type information returns and GST/HST returns on time

If you qualify, the CRA will tell you in writing in November, following an annual review. If you continue to qualify, the CRA will not tell you again.

Regular remitters

You are a regular remitter if:

• you are a new employer, but do not qualify to remit quarterly as a new small employer
  
• your average monthly withholding amount (AMWA) two years ago was less than $25,000, and the CRA has not advised you to remit at a different frequency

Accelerated remitters

There are two groups of accelerated remitters: threshold 1 and threshold 2.

If you had more than one payroll program account two calendar years ago, or if you are an associated corporation, see The Average monthly withholding amount (AMWA) for important information.

Threshold 1 accelerated remitters

You are a threshold 1 accelerated remitter if you had an average monthly withholding amount (AMWA) of $25,000 to $99,999.99 two calendar years ago.

Threshold 2 accelerated remitters

You are a threshold 2 accelerated remitter if you had an average monthly withholding amount (AMWA) of $100,000 or more two calendar years ago.