Payroll remittance is the process by which employers send the income tax, CPP, and EI that they've withheld from employee paychecks to the Canada Revenue Agency (CRA). Employers aren't keeping this money for themselves; they're holding it on behalf of the government and must remit it by a specific deadline each month. Missing a remittance deadline can result in penalties, interest charges, and potential legal consequences. Understanding payroll remittance requirements helps you know whether your employer is handling deductions correctly and on time. When you receive your paycheck, several amounts are deducted before you see your take-home pay. These deductions include: - Income tax withholding based on your tax bracket and Form TD1 information - Canada Pension Plan (CPP) contributions (both employee and employer portions) - Employment Insurance (EI) premiums - Voluntary deductions like RRSP contributions or union dues Your employer collects all these amounts and holds them temporarily. Rather than remitting money for each individual employee separately, employers bundle their deductions and send one lump payment to CRA. This is the payroll remittance. The deadline for remitting payroll deductions depends on the size of your employer's payroll account.
A payroll remittance includes income tax withholding, CPP contributions (both employee and employer portions), and EI premiums that were deducted from employees' paychecks. These amounts are bundled together and sent to CRA by the employer.
Most employers must remit payroll deductions by the 15th of the month following the month in which payroll was issued. For example, January payroll must be remitted by February 15. Employers remitting by cheque should mail payments by the 10th to allow for delivery time.
Late payroll remittances are subject to a penalty of 3%, 5%, or 10% of the amount owing, depending on how late the payment is. Interest also accrues daily on the outstanding amount until it's paid in full.
You can verify remittance by checking your T4 slip at tax time, which shows all deductions for the year. You can also review your pay stubs to confirm amounts were withheld correctly.
Self-employed individuals don't remit payroll deductions like employees do, since there's no employer withholding. However, they must remit their own CPP contributions (both portions) by the tax return deadline each year.