As an employer, you are required by the Canadian Revenue Agency (the CRA) to remit the Canadian Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax taken from your employee's income, as well as the employer's share of CPP contributions and EI premiums.
The CRA only considers a remittance "made" on the day that it is received by them (the Receiver General) -- be sure to figure in time for the payment to reach them (there can be electronic payment delays).
Now, as the CRA is closed for business on the weekends and public holiday, should your remittance be due on one of those days, it will be due the next business day. This means if your remittance is due on a Sunday and the following business day (Monday) is not a holiday, it will be due on Monday. Again, as it can take time for them to receive your remittance and as many financial institutes are closed on the weekend and on holidays, it would be best to submit your remittances before the weekend.
In the unfortunate event that your business goes bankrupt or otherwise ceases operation, remittances are due at your tax centre within 7 days following closure/bankruptcy.
The CRA handles late remittances with penalties by applying a percentage to your outstanding total based on your lateness.
This penalty is generally only applied to amounts more than $500, but the CRA can choose to apply it to amounts less than $500.
In addition, failing to deduct the correct amount and remit it can be met with a 10% penalty by the CRA.
The CRA will only apply this penalty once in a calendar year: if you are subject to another penalty in the same year, the CRA can apply a 20% penalty on a late remittance or failure to deduct if the CRA deems that the error was made knowingly or was otherwise negligent.
A quarterly remitter remits once a quarter. To qualify, an employer has to:
New employers will be notified by mail of this option. Employers who remain eligible will not be re-notified, but will be notified to the contrary if their status changes. If you believe your status changes to become eligible for quarterly remittance, you can call the CRA at 1-800-959-5525 to apply to remit quarterly.
The quarters are:
Remittances are due on the 15th day of the month following the last month of the quarter. The due dates are:
A regular remitter remits once a month on or before the 15th of the month following the deduction.
If your average monthly withholding amount (AMWA) is less than $14,999.99 (and you aren't a quarterly remitter, as above), you are a regular remitter. You must remit your deductions so that they are received by the CRA on or before the 15th of the month following the month you made the deductions.
To be eligible as a Threshold 1 Accelerated Remitter, you must have had a total average monthly withholding amount (AMWA) of $15,000 to $49,999.99 two calendar years ago. This includes those with associated corporations and multiple payroll accounts.
The CRA needs to receive your deductions by the following dates:
A Threshold 2 Accelerated Remitter remits any week that a deduction is made (as many as 4 times a month).
This group consists of employers who had a total average monthly withholding amount (AMWA) of $50,000 or more two calendar years ago.
Amounts deducted from remuneration paid at any time of the month are due to be received by your Canadian financial institution no later than the third working day (not including Saturdays, Sundays, or public holidays) after the end of the following periods:
Example: if the payday falls on the 5th of the month, the remittance is due three (3) working days after the 7th of that month.
Threshold 2 remitters must remit electronically or in person at their Canadian financial institution, else a penalty could be assessed.
Large employers are required to pay at a financial institution. All payments made to the CRA at least one full day before the due date are considered to have been made at a financial institution and a penalty will not be charged.
Payments made on the due date but not at a financial institution are subject to a penalty of 3% of the amount due.
All payments made after the due date are subject to the graduated penalty rates (as above).
Threshold 1 and 2 accelerated remitters are considered to be "Monthly Accelerated Remitters" if they have a payroll frequency of only once a month.