CRA Payroll Remittance | Complete Guide for Canadian Employers

CRA payroll remittance is the amount a Canadian employer must send to the Canada Revenue Agency every month covering CPP contributions, EI premiums, and income tax deducted from employee pay. The deadline is the 15th of the month following the pay period. Missing the deadline attracts penalties of 3–10% of the amount owed. Employers remit through CRA My Business Account, online banking, or at a financial institution. The remittance amount is calculated using CRA’s Payroll Deductions Online Calculator (PDOC).

In This Guide:

• 1. What is CRA Payroll Remittance?
• 2. What Payroll Deductions Must Canadian Employers Remit?
• 3. Payroll Remittance Deadlines — By Remitter Type
• 4. How to Calculate Your Payroll Remittance
• 5. How to Remit Payroll to CRA — Step by Step
• 6. CRA Payroll Remittance Penalties & Interest
• 7. Payroll Remittance for Small Businesses in BC & Ontario
• 8. Common Payroll Remittance Mistakes
• 9. How DKP Global Manages Payroll Remittance for You
• 10. Frequently Asked Questions (10 Q&As)

1. What is CRA Payroll Remittance?

Every time a Canadian employer runs payroll, they are required by law to deduct specific amounts from each employee’s pay and send those amounts to the Canada Revenue Agency. This process is called payroll remittance or more formally, remitting source deductions.

Think of it this way: when you pay an employee, a portion of their gross salary never actually belongs to the employee it belongs to the government. CPP contributions, EI premiums, and income tax withheld are collected by the employer on CRA’s behalf and must be forwarded to CRA by a specific deadline every month. The employer also contributes their own share of CPP and EI on top of the employee’s deductions.

For new Canadian business owners particularly Indian immigrants and newcomers unfamiliar with the Canadian payroll system this is often the most confusing compliance obligation. Unlike India where TDS (Tax Deducted at Source) is filed quarterly, Canada requires monthly remittances with strict deadlines and immediate penalties for non-compliance. Getting this wrong from your first hire can result in significant penalties that accumulate quickly.

DKP Global handles the complete payroll remittance process for our clients calculation, remittance, and CRA account management so you never have to worry about missing a deadline.

2. What Payroll Deductions Must Canadian Employers Remit?

Every payroll remittance to CRA consists of three components: employee CPP, employee EI, employee income tax plus employer’s own share of CPP and EI. Here is a detailed breakdown:

Deduction	Who Pays	2026 Rate	Annual Maximum (Employee)	Notes
CPP (Canada Pension Plan) — Employee	Employee	5.95% of pensionable earnings	$4,034.10	On earnings between $3,500 and $71,300 (basic exemption applies)
CPP2 (Second Additional CPP)	Employee	4.00% on earnings $71,300–$81,900	$428.00	Second tier of CPP introduced 2024
CPP — Employer Match	Employer	5.95% matches employee exactly	$4,034.10	Employer pays same amount as employee double the employee CPP cost
EI (Employment Insurance) — Employee	Employee	1.66% of insurable earnings	$1,077.48	On earnings up to $64,900 maximum insurable earnings
EI — Employer Contribution	Employer	2.324% (1.4x employee rate)	$1,508.47	Employer pays 1.4x the employee EI can be reduced with private plan
Federal Income Tax	Employee	Based on TD1 + federal tax brackets	No cap	Withhold per CRA tables varies by province and TD1 claim
Provincial Income Tax	Employee	Based on provincial TD1 + brackets	No cap	Remit to CRA for most provinces (Quebec remits separately to Revenu Quebec)

Total employer cost per employee: For every $1 of gross employee wages, an employer pays approximately $1.12–$1.15 when you include the employer’s share of CPP and EI. This is the true labour cost of hiring in Canada a critical figure for financial planning and budgeting. DKP Global includes employer payroll cost analysis in every payroll engagement.

Quebec is the exception: Quebec operates its own pension plan (QPP instead of CPP) and employment insurance fund, and employers remit provincial income tax to Revenu Quebec, not CRA. DKP Global advises Quebec-based clients on both CRA and Revenu Quebec obligations.

3. Payroll Remittance Deadlines By Remitter Type

Not all Canadian employers have the same remittance deadline. CRA assigns a remitter type based on your average monthly remittance amount over the past two calendar years. Your remitter type determines how often and by when you must remit.

Remitter Type	Who Qualifies	Remittance Frequency	Deadline
New Small Employer	New employers in first year of payroll AND average monthly withholding < $1,000	Quarterly	15th of month following each calendar quarter (Apr 15, Jul 15, Oct 15, Jan 15)
Regular Remitter	Average monthly withholding $0–$24,999.99 (most small businesses)	Monthly	15th of the month following the pay period month
Accelerated Remitter — Threshold 1	Average monthly withholding $25,000–$99,999.99	Twice monthly	By 25th for 1st–15th pay periods; by 10th of next month for 16th–end of month
Accelerated Remitter — Threshold 2	Average monthly withholding $100,000+	Weekly (next business day)	Within 3 business days of each payroll run

Most Canadian small businesses fall into the Regular Remitter category meaning your payroll remittance is due by the 15th of the month following the pay period. For example: if you pay your employees on January 31, your CPP + EI + income tax remittance is due February 15.

New employers in their first year with average monthly deductions under $1,000 qualify as New Small Employers and can remit quarterly a significant cash flow advantage when starting out. DKP Global confirms your remitter type at payroll setup and updates it annually as your payroll grows.

4. How to Calculate Your Payroll Remittance

Calculating payroll remittance correctly is one of the most technically demanding parts of Canadian payroll compliance. The calculation involves federal and provincial tax tables, CPP pensionable earnings thresholds, EI insurable earnings limits, and TD1 personal tax credit amounts. Here is the process:

Step	What to Calculate	How	Tool
Step 1	Determine gross pay	Hours × hourly rate OR annual salary ÷ pay periods	Payroll records
Step 2	Calculate CPP deduction	(Gross pay − $3,500/26 or /52 basic exemption per pay period) × 5.95%	CRA PDOC calculator
Step 3	Calculate EI deduction	Gross pay × 1.66% (up to maximum insurable earnings)	CRA PDOC calculator
Step 4	Calculate income tax	Apply federal + provincial tax tables based on TD1 claim codes and pay period	CRA PDOC calculator
Step 5	Calculate net pay	Gross pay − CPP − EI − Income Tax = net pay to employee	Payroll software
Step 6	Calculate employer CPP	Same as employee CPP exact match	CRA PDOC calculator
Step 7	Calculate employer EI	Employee EI × 1.4	CRA PDOC calculator
Step 8	Total remittance	Employee CPP + Employer CPP + Employee EI + Employer EI + Employee Income Tax	Sum of above

CRA provides a free Payroll Deductions Online Calculator (PDOC) at canada.ca that handles all of this automatically when you input the employee’s gross pay, province, pay period frequency, and TD1 claim code. DKP Global uses both PDOC and certified payroll software (Xero Payroll, QuickBooks Payroll) to calculate every pay run with a manual cross-check for accuracy before remittance.

How to Remit Payroll to CRA — Step by Step

There are four ways to remit payroll deductions to CRA. Here is a step-by-step breakdown of the most common method CRA My Business Account (recommended):

Step	Action	Details
1	Log in to CRA My Business Account	Go to canada.ca → My Business Account → log in with your CRA credentials. If not registered, register your business using your Business Number (BN) and CRA security code.
2	Navigate to Payroll	From the dashboard, select “Payroll” → “Make a payroll remittance”
3	Select your RP account	Your payroll account number is your Business Number + “RP0001” (e.g. 123456789RP0001). Select it from the dropdown.
4	Enter remittance period	Select the month (or period) the remittance covers e.g. January 2026 for pay runs processed in January
5	Enter remittance amounts	Enter: Employee CPP, Employer CPP, Employee EI, Employer EI, Employee Income Tax. The total is your remittance amount.
6	Choose payment method	Pay directly from your business bank account via online banking, or by pre-authorized debit set up in My Business Account
7	Confirm and submit	Review the amounts and submit. CRA will send a confirmation number save it for your records.
8	Record in your books	In Xero or QuickBooks, record the remittance as a payment against your payroll liabilities account clearing CPP payable, EI payable, and income tax payable.

Alternative remittance methods: (1) Online banking add “Receiver General for Canada” as a payee and use your RP account number as the account number; (2) At your financial institution — bring your PD7A remittance form (available in My Business Account); (3) Pre-authorized debit CRA pulls the remittance from your account automatically on the due date.

DKP Global manages the complete remittance process on behalf of our clients calculation, submission, and reconciliation in your accounting software. Our clients never have to log in to CRA My Business Account for payroll remittance we handle it as part of every monthly payroll engagement.

6. CRA Payroll Remittance Penalties & Interest

The CRA takes payroll remittance compliance extremely seriously. These are government funds you are holding on trust and the penalty structure reflects that. Here is exactly what happens when you miss or underpay a remittance:

Scenario	Penalty	Additional Consequences
Remittance 1–3 days late	3% of the amount due	Interest charged at prescribed rate + 4% on unpaid balance
Remittance 4–5 days late	5% of the amount due	Interest charged at prescribed rate + 4%
Remittance 6–7 days late	7% of the amount due	Interest charged at prescribed rate + 4%
Remittance 8+ days late	10% of the amount due	Interest charged at prescribed rate + 4%
Second late remittance in same year	20% of the amount due	CRA considers this a repeat offence penalty doubles
Failure to deduct (not withholding at all)	10% of amount that should have been deducted	Director liability directors personally liable if company cannot pay
Knowingly failing to remit	Up to 20% + possible criminal prosecution	Personal liability for directors and officers no corporate shield

⚠ Director Liability Warning: If a corporation fails to remit payroll deductions and cannot pay, CRA can hold directors personally liable for the unpaid amount plus penalties and interest. This is one of the few situations in Canadian law where the corporate shield does not protect you. Directors of small companies should treat payroll remittance as their highest-priority financial obligation. DKP Global has never missed a payroll remittance deadline for any client.

7. Payroll Remittance for Small Businesses in BC & Ontario

While federal CRA payroll remittance rules apply across Canada, there are province-specific payroll obligations layered on top. Here is what small businesses in BC and Ontario need to know:

British Columbia Payroll Obligations

• WorkSafeBC: Register before hiring your first employee. Premiums are calculated as a percentage of gross payroll based on your industry classification. Premium rates vary typically 0.5%–5% of gross payroll. WorkSafeBC premiums are remitted quarterly.
• No provincial payroll tax in BC for most businesses (unlike Ontario’s EHT).
• PST on benefits: Some taxable employee benefits may be subject to BC PST DKP advises on benefits structuring to minimize PST exposure.
• BC payroll remittance: All CPP, EI, and income tax remitted to CRA no separate provincial remittance required (unlike Quebec).

Ontario Payroll Obligations

• WSIB (Workplace Safety and Insurance Board): Mandatory for most Ontario industries before first hire. Premiums calculated on insurable earnings rates vary by industry (typically 0.7%–8% of payroll). File and remit quarterly.
• Employer Health Tax (EHT): Ontario businesses with total Ontario payroll exceeding $1,000,000 annually must pay EHT at up to 1.95% of total payroll. Businesses under $1M are exempt. Growing businesses should monitor this threshold.
• Ontario payroll remittance: CPP, EI, and income tax all remitted to CRA Ontario income tax included in federal remittance (Ontario is not Quebec).

DKP Global manages both CRA payroll remittance AND province-specific obligations (WorkSafeBC, WSIB, EHT) for clients across BC and Ontario one point of contact for all payroll compliance.

Common Payroll Remittance Mistakes Canadian Employers Make

Mistake	Consequence	How to Avoid
Remitting based on net pay instead of gross pay	Underpayment CRA assessed difference plus penalties + interest	Always calculate remittance on gross pay, not net pay issued to employee
Forgetting employer CPP and EI	Chronic underpayment employer contributions are equal to employee CPP and 1.4x employee EI	Use payroll software that auto-calculates both employee and employer shares
Missing the 15th deadline	3–10% penalty immediately no grace period	Set calendar reminders; DKP clients have remittance scheduled automatically
Using wrong remitter type frequency	Accelerated remitters filing monthly = late remittances for 2nd period each month	Confirm remitter type annually with DKP type changes as payroll grows
Not getting TD1 from every new employee	Using wrong personal amounts = wrong income tax withholding = CRA assessment	Collect federal TD1 + provincial TD1 from every employee on Day 1
Remitting for wrong period	CRA applies payment to wrong month creates arrears in correct month	Always specify the period in My Business Account or on PD7A form
Not registering RP account before first payroll	Cannot remit CRA has no account to receive payment	Register RP account immediately after incorporation before first hire

How DKP Global Manages Payroll Remittance for Canadian Employers

Payroll remittance is one of those compliance obligations where getting it wrong is far more expensive than getting it right. DKP Global builds a structured payroll remittance process around every client engagement to ensure zero late filings and zero penalties.

Here is exactly what our payroll remittance service includes:

• Payroll setup: Register your CRA RP account, confirm remitter type, set up employee profiles with TD1 forms, configure payroll frequency
• Every pay run: Calculate gross pay, CPP, EI, and income tax for each employee using CRA-certified calculations cross-checked manually for accuracy
• Payslips: Issue payslips to each employee showing gross pay, all deductions, and net pay
• Remittance calculation: Calculate total employer remittance employee deductions plus employer CPP and EI contributions
• CRA remittance: Submit remittance to CRA via My Business Account by the 15th or earlier for accelerated remitters
• Record in books: Reconcile payroll liabilities in Xero or QuickBooks CPP payable, EI payable, income tax payable all cleared
• WorkSafeBC / WSIB: Calculate and remit provincial workers compensation premiums quarterly
• T4 slips: Prepare and file T4 slips for every employee by February 28 annually
• CRA queries: Respond to any CRA payroll-related correspondence on your behalf

Our clients across BC, Ontario, and Alberta run payroll with complete confidence knowing every deduction is calculated correctly, every remittance is filed on time, and every CRA deadline is managed by a qualified ACCA-UK professional. For Indian immigrant business owners especially, this removes one of the most anxiety-inducing compliance obligations in the Canadian business environment.

Unlike a generic payroll software that calculates and reminds DKP Global actually submits the remittance, reconciles the CRA account, and maintains all payroll records in your accounting software. If CRA sends a query or assessment related to payroll, we handle the response. You focus on your business; we handle the CRA.

Need Help with CRA Payroll Remittance? DKP Global manages your complete payroll cycle — calculations, CRA remittances, T4 filing, WorkSafeBC/WSIB, and year-end. ACCA-UK & CS certified. Zero late remittances on record. 250+ businesses served. 📅 Book Free 30-Min Consultation  |  📞 +1-672-833-4342  |  📧 info@dkpglobal.org  |  💬 WhatsApp → DKP Accounting & Payroll Services in Canada

Frequently Asked Questions — CRA Payroll Remittance