Payroll Remittance Guide for Canadian Employers

A missed payroll remittance can create a problem long after employees have been paid. For Canadian business owners, this payroll remittance guide explains what must be sent to the Canada Revenue Agency (CRA), when it is due, and how to keep the process accurate from one pay period to the next.

Payroll is more than calculating a paycheck. Once deductions are withheld, your business is responsible for holding those funds in trust and remitting them correctly. A reliable process protects your employees, keeps your business compliant, and helps prevent interest and penalties that can add up quickly.

What Is a Payroll Remittance?

A payroll remittance is the payment an employer sends to the CRA for amounts deducted from employee pay, along with the employer's required contributions. In most cases, a remittance includes federal and provincial income tax withheld, employee Canada Pension Plan (CPP) contributions, employee Employment Insurance (EI) premiums, and the employer's CPP and EI portions.

The employer contribution is a key detail. Your business does not simply forward money withheld from employees. It must also add its own CPP contribution and EI premium before sending the total to the CRA.

For example, if an employee has income tax, CPP, and EI deducted from a paycheck, the business must record those deductions. It must then calculate its matching CPP amount and the applicable employer EI amount. The combined total is the payroll remittance for that pay period.

Set Up Your Payroll Account Before the First Paycheck

Before paying employees, a business needs a payroll program account with the CRA. This account is connected to the business number and is used to report and remit payroll deductions. A separate account may be needed if your business has more than one payroll program or specific reporting arrangement.

You will also need accurate employee information before processing payroll. This includes each employee's Social Insurance Number, address, date of hire, pay rate, pay frequency, and completed federal and provincial TD1 forms. TD1 information affects the amount of income tax withheld, so using an outdated or incomplete form can lead to avoidable errors.

Classifying workers correctly matters as well. An employee and an independent contractor are treated differently for payroll purposes. Paying a contractor does not automatically remove payroll obligations if the actual working relationship reflects employment. When the classification is unclear, it is wise to get professional guidance before making payments.

Calculate Deductions Accurately Each Pay Period

Payroll calculations begin with gross pay, which may include wages, salary, overtime, vacation pay, commissions, taxable benefits, bonuses, and certain allowances. From there, deductions are calculated according to the employee's earnings and the current CRA payroll tables or approved payroll software.

The main deductions are income tax, CPP, and EI. Income tax withholding depends on the employee's earnings, pay frequency, TD1 claims, and applicable province of employment. CPP and EI have annual maximums, which means deductions may stop later in the year once an employee reaches the required maximum contribution.

Do not assume every payment is handled the same way. A bonus, retiring allowance, taxable vehicle benefit, or reimbursement may have different tax treatment. Similarly, vacation pay can be paid on each check or accumulated and paid later, but it must be tracked consistently. When payroll has special payments or benefits, reviewing the treatment before processing is much easier than correcting it after year-end.

Know Your CRA Remittance Due Date

Your remittance schedule is assigned by the CRA and is generally based on your average monthly withholding amount. New employers are commonly regular remitters, but your schedule can change as payroll grows. The CRA may classify employers as quarterly, regular, accelerated threshold 1, or accelerated threshold 2 remitters.

For regular remitters, deductions for a month are generally due by the 15th day of the following month. Accelerated remitters have more frequent deadlines, often requiring payments twice per month or within days after a pay period ends. Quarterly remitters have different requirements and should confirm their assigned schedule carefully.

The practical rule is simple: do not base your deadline only on payday. Base it on the CRA remitter type assigned to your payroll account. A business that moves from a small monthly payroll to frequent or higher-value payments may be assigned a faster remittance schedule.

If a due date falls on a weekend or public holiday, the CRA generally accepts payment on the next business day. Still, it is better not to rely on the last possible day. Processing times and payment entry errors can turn a planned on-time payment into a late one.

How to Make a Payroll Remittance

Employers can remit through online banking, the CRA's online services, pre-authorized debit, or another accepted payment method. The right option depends on your bank, internal approval process, and payment frequency. Online methods are often the easiest choice because they create a clear payment record and reduce the risk of mailing delays.

Before submitting a payment, compare the remittance amount to your payroll register. Confirm that it includes every payroll run in the reporting period, the correct employer contributions, and any adjustments. It is also smart to confirm that the payment is being sent to the correct CRA payroll account, especially if the business has multiple program accounts.

Keep proof of payment with your payroll records. A bank confirmation, transaction number, and copy of the payroll summary can save time if a payment is later questioned or posted incorrectly.

Keep Records That Support Every Number

Good payroll records make remittances easier to review and year-end reporting far less stressful. Employers should retain payroll registers, employee TD1 forms, hours worked, pay statements, taxable benefit calculations, remittance confirmations, Records of Employment when applicable, and T4 information.

CRA record-retention requirements can extend for several years, so organized digital files are useful. Save documents by pay period and keep a year-to-date payroll summary for each employee. This helps you spot whether CPP or EI deductions are approaching their annual maximums and makes it easier to reconcile totals before T4 slips are prepared.

Reconciliation is one of the most valuable monthly payroll habits. Compare gross wages, deductions, employer contributions, and remittances to your bookkeeping records. If payroll expense in the books does not match the payroll reports, investigate promptly. Small discrepancies are easier to resolve before multiple pay periods pass.

Common Payroll Remittance Mistakes to Avoid

The most common issue is remitting late. Even when the amount is correct, a late payment can result in penalties and interest. Scheduling the payment in advance and assigning clear responsibility for approval can reduce this risk.

Another frequent mistake is forgetting the employer portion of CPP and EI. The employee deduction is visible on the pay stub, while the employer amount may be missed if calculations are handled manually. Payroll software can help, but it still needs correct setup and periodic review.

Businesses also run into trouble when they pay taxable benefits without adding them to payroll, use the wrong province of employment, or treat a worker as a contractor without reviewing the facts. These situations are not always straightforward, particularly for startups, family businesses, and companies with remote staff. The right approach depends on the details of the payment and employment relationship.

When Professional Payroll Support Helps

Some businesses can manage a simple payroll internally, especially with a small, stable team and consistent wages. But payroll becomes more demanding when you add commissions, benefits, multiple pay rates, new hires, terminations, shareholder compensation, or employees working in different provinces.

Professional payroll support can provide accurate calculations, timely remittances, organized records, and year-end reporting while giving business owners more time to focus on operations. For employers in London, Ontario and surrounding communities, Ayad Accounting can help make payroll administration clear, dependable, and manageable.

A payroll remittance is not just another bill to pay. It is a regular compliance responsibility tied directly to your employees and your business records. Build a repeatable process, review it often, and ask for help before a small payroll question becomes an expensive correction.