Types of remitters

Your remitter type sets your remitting frequency and affects your due dates.

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Background

How the CRA determines your remitter type

Generally, your remitter type is based on your average monthly withholding amount (AMWA) from 2 calendar years ago.

The AMWA is calculated by:

  • Total of all required payroll deduction remittances in a calendar year
  • ÷divideded by Number of months (maximum 12) that required a payroll deduction remittance in that calendar year
  • =eqauls Average monthly withholding amount (AMWA)

Every November, the CRA conducts a review of all payroll accounts to determine remitter types.

If your remitter type changes, they will let you know in writing. If applicable, the CRA will also look at your compliance record to see if you qualify as a quarterly remitter.

If you have more than one payroll account

If your organization has more than one payroll account, your remitter type will be the same for all accounts.

If you are an associated corporation

If you are an associated corporation, your remitter type is the same as that of all your associated corporations.

Example – Regular corporation

In 2021, Company A had to remit $1,050,000 over 10 months. It is not an associated corporation. Company A's AMWA is calculated as follows: $1,050,000 ÷ 10 = $105,000.

Since its AMWA was over $99,999.99 in 2021, Company A will be a threshold 2 accelerated remitter for 2023.

Example – Associated corporation

Companies X and Y are associated corporations. In 2021, their combined source deductions remittances were $297,000. Each corporation had to remit for January through November. Since months are counted only once, their AMWA is calculated as follows: $297,000 ÷ 11 = $27,000.

Since their combined AMWA was between $25,000.00 and $99,999.99 in 2021, each company will be a threshold 1 accelerated remitter for 2023.

Remitter type has no impact on pay periods

Your remitter type is not related to your pay periods. If your remitter type changes, you do not have to start paying your employees more often because you have to remit on different due dates.

Quarterly remitters – New small employers

A new employer is an employer whose payroll account has been open for less than 12 months. 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.

New employers are eligible to be a quarterly remitter if they meet both of the following conditions:

  • The monthly withholding amount (MWA) is less than $1,000
    What is the "monthly withholding amount (MWA)"

    The monthly withholding amount (MWA) is the total of all required remittances in one calendar month.

  • A perfect compliance record is maintained on all payroll and GST/HST accounts

A new employer who no longer qualifies to be a quarterly remitter will be considered a regular remitter in the next calendar quarter.

Example – MWA condition is not met

Zach's Auto Repairs has a MWA of $500 for January, $1,500 for February, and $1,500 for March. The employer's quarterly remittance of $3,500 is due by April 15.

Since the MWA for February and March was $1,000 or more, the employer will be considered a regular remitter as of the beginning of the second calendar quarter. The employer will have to remit monthly beginning with their MWA for the month of April, which is due by May 15.

Perfect compliance record

Quarterly remitters must meet all of the following conditions over the previous 12 months to maintain a perfect compliance record in their payroll and GST/HST accounts:

  • The payroll account must have:
    • No late remittances or late remitting penalties
    • No failure to remit penalties
    • No failure to deduct penalties
    • No overdue T4-type information return(s)
  • If the employer has a GST/HST account, it must have:
    • No balance owing
    • No overdue returns
    • No credit balance with a refund hold
Example – Perfect compliance record condition is not met

ABC Construction has a MWA of $500 for each of the months January, February and March. Where April 15 is not a holiday and the employer remits their quarterly remittance of $1,500 after April 15, the remittance is considered late.

Since the failure happened in April, ABC Construction may make their quarterly remittance for April, May and June by July 15. However, the company will have to remit monthly beginning with their MWA for the month of July, which is due by August 15.

Quarterly remitters – Small employers

An existing employer is an employer whose payroll account has been opened for at least 12 months (if the employer has multiple payroll accounts, at least one must have been open for at least 12 months).

Existing employers are eligible to remit quarterly if they meet all of the following conditions:

  • They have a payroll account that has been open for at least 12 months
  • The AMWA in the calendar year before the previous calendar year was less than $3,000
  • A perfect compliance record is maintained on all payroll and GST/HST accounts over the previous 12-month period

Existing employers who qualify to be quarterly remitters are notified in writing.

Existing employers who no longer qualify as quarterly remitters will be assigned a new remitter type for the following calendar year.

Perfect compliance record

Quarterly remitters must meet all of the following conditions over the previous 12 months to maintain a perfect compliance record in their payroll and GST/HST accounts:

  • The payroll account must have:
    • No late remittances or late remitting penalties
    • No failure to remit penalties
    • No failure to deduct penalties
    • No overdue T4-type information return(s)
  • If the employer has a GST/HST account, it must have:
    • No balance owing
    • No overdue returns
    • No credit balance with a refund hold

Regular remitters

Existing employers who meet all of the following conditions are regular remitters:

  • The AMWA in the calendar year before the previous calendar year was less than $25,000
  • The CRA has not assigned another remitter type
  • You are a new employer, but do not qualify to remit quarterly as a new small employer

Accelerated remitters – Threshold 1
($25,000 - $99,999.99)

Existing employers who meet both of the following conditions are Threshold 1 accelerated remitters:

  • The AMWA in the calendar year before the previous calendar year was at least $25,000 but not more than $99,999.99
  • The CRA did not assign another remitter type

Accelerated remitters – Threshold 2
($100,000 or more)

Existing employers who meet both of the following conditions are Threshold 2 accelerated remitters:

  • The AMWA in the calendar year before the previous calendar year was at least $100,000
  • The CRA did not assign another remitter type
 

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