Payroll remittances: remitter types, due dates and late-remittance penalties

1. Open a payroll program account with the CRA.
2. Get each employee's SIN within three days of the start of work, and a completed federal (and, where it applies, provincial) Form TD1.
3. Deduct CPP contributions, EI premiums and income tax from pay, taxable benefits and allowances — and hold these amounts in trust, apart from the business's own money.
4. Remit them with the employer's own share of CPP and EI, by the due date for the employer's remitter type.
5. Report pay and deductions on T4 or T4A slips, filed with a summary by the last day of February of the next year.
6. Issue a Record of Employment (ROE) when an employee stops working and has an interruption of earnings.
7. Keep records for at least six years after the year they relate to.

An employer who makes no reasonable effort to get an employee's SIN can be charged $100 for each number not sought. Deductions and slips are still due even when the SIN has not arrived.

The due date depends on the average monthly withholding amount (AMWA) — total remittances in a calendar year divided by the number of months with remittances — from two calendar years ago. The CRA tells the employer which type applies; the employer can also check it in My Business Account or Represent a Client.

A perfect compliance history means that for 12 months every payroll deduction and remittance was on time, GST/HST was paid on time, and T4 and GST/HST returns were filed on time. One late remittance ends quarterly remitting from the next month, until a new 12-month record is built.

When a due date falls on a Saturday, Sunday or public holiday recognized by the CRA, the payment is on time if it is received or processed at a Canadian financial institution by the next business day.

• Usually charged only on the part over $500, but on the whole amount when the failure was knowing or grossly negligent.
• A second or later knowing or grossly negligent failure in the same calendar year: 20%.
• Threshold 2 remitters who pay on time but not at a financial institution can be charged 3%.
• Amounts deducted but not remitted are assessed in full — the employee's share and the employer's share — with penalty and interest. Directors can be personally liable.

CPP and EI rates, maximum pensionable and insurable earnings and maximum contributions change every January, and since January 1, 2024 employers also deduct second additional CPP contributions (CPP2) on earnings above the year's maximum pensionable earnings. Read the year's figures on the CRA's rate pages listed under the sources below, rather than from last year's notes.

T4 and T4A information returns are filed, and the slips given to employees, on or before the last day of February of the year after the one they report. If that day is a Saturday or Sunday, they are due the next business day. A December remittance that is due January 15 is late if it is paid with the T4 return filed after January 15.