A client called us last spring. Small manufacturer, about 90 employees. They’d been a day late on one payroll remittance to the CRA. One day. The penalty was just over $1,400.

Payroll remittance to the CRA is the process of sending withheld CPP contributions, EI premiums, and income tax to the Canada Revenue Agency on a set schedule. Your remitter type (regular, quarterly, or accelerated threshold 1 or 2) determines your deadlines, and the CRA’s penalty structure starts at 3% for being even one day late, escalating to 10% past seven days.

The penalties are not proportional. They’re punitive. And they hit small businesses hardest, because a 90-person company doesn’t have a dedicated compliance team watching the calendar. They have a payroll person who also does benefits, onboarding, and half the HR admin.

What You’re Actually Remitting (and Why It’s Three Things, Not One)

Every payroll remittance to the CRA bundles three separate obligations into a single payment. People talk about it like it’s one thing. It’s not.

1. Canada Pension Plan contributions. You withhold the employee’s share of CPP and CPP2, then match it dollar for dollar. For 2026, that’s up to $4,230.45 in regular CPP plus $416.00 in CPP2 per employee, and you’re paying the same amount on top. If you have staff in Quebec, it’s QPP instead, at a higher rate. Same concept, different math.

2. Employment Insurance premiums. The employee pays their share (1.63% of insurable earnings, max $1,123.07), and you pay 1.4 times that. Your employer EI cost can run up to $1,572.30 per employee for 2026. Quebec employees pay a reduced EI rate because QPIP covers parental benefits separately.

3. Income tax withheld. Federal plus provincial, based on each employee’s TD1 form and province of employment. This is typically the largest portion of your remittance. For a deeper breakdown of all the rates and thresholds, see our complete guide to Canadian payroll deductions for 2026.

All three get bundled into one payment. One cheque. One electronic transfer. But the CRA tracks each component separately, and your year-end T4 filing needs to reconcile against every dollar.

The Four Remitter Types (and How the CRA Decides Yours)

The CRA doesn’t let you pick your remittance schedule. They assign it based on your average monthly withholding amount, or AMWA. That’s the average of your total payroll deductions (CPP + EI + income tax) over the previous two calendar years.

Here’s where it breaks down.

Quarterly Remitter

AMWA under $3,000 and a perfect compliance history. You remit four times a year: by April 15, July 15, October 15, and January 15. This is mostly very small employers. If you’re reading a guide this detailed, you’ve probably graduated past quarterly.

Regular Remitter

AMWA under $25,000. This covers the majority of Canadian small and mid-size businesses. Your remittance is due by the 15th of the month following the month you made the deductions. Pay employees in March, remit by April 15.

Simple enough. Until you realize the 15th falls on a weekend or holiday about four times a year. When that happens, the deadline extends to the next business day. But “I thought the 15th was a Monday” is not a defence the CRA entertains.

Accelerated Remitter, Threshold 1

AMWA between $25,000 and $99,999.99. Now you’re remitting twice a month:

• Deductions from the 1st through the 15th of the month: due by the 25th of the same month
• Deductions from the 16th through the end of the month: due by the 10th of the following month

This is the threshold that catches growing companies off guard. You hire 30 people in Q3, your AMWA crosses $25,000, and suddenly your remittance schedule doubles. The CRA will notify you by letter. Not by phone. Not by email. By letter, to the address on file. If your mailing address is wrong or your office admin tosses it, you won’t know until the penalty notice arrives.

Accelerated Remitter, Threshold 2

AMWA of $100,000 or more. This is the big one. You must remit within three working days of each pay date. Not three calendar days. Three working days.

For a company running biweekly payroll, that’s roughly 26 remittances per year, each with a three-day window. Miss one by a single day? Penalty. Miss it by a week? Bigger penalty. The math on this gets ugly fast, which we’ll cover in a minute.

The Penalty Structure Is Genuinely Punitive

I’m going to be direct about this. The CRA’s late remittance penalties are designed to hurt.

Here’s the schedule, per the CRA’s own penalty guidelines:

• 1 to 3 days late: 3% penalty on the amount due
• 4 to 5 days late: 5%
• 6 to 7 days late: 7%
• More than 7 days late: 10%

And for repeat offenders within the same calendar year? The penalty doubles to 20%. On the full amount. Plus compound daily interest at the CRA’s prescribed rate.

Let’s do the math on a real scenario. A regular remitter owes $18,000 for the month. They’re four days late. That’s a $900 penalty. If they’d been eight days late, it jumps to $1,800. If it happens again that same year, the second offence costs $3,600.

For what? Being a few days behind on a payment you were already going to make.

The CRA treats a five-day-late remittance from a 90-person manufacturer the same as it treats one from a multinational. The percentage doesn’t scale. The dollar amount does.

And here’s what really gets under my skin. There’s no grace period. No courtesy call. No “hey, we noticed you’re a day late, please submit by Friday.” The penalty is automatic. The interest starts accruing the day after the deadline. By the time you get the notice, you already owe it.

If your payroll system isn’t flagging these deadlines automatically, you’re relying on someone’s calendar reminder. That works until it doesn’t.

How to Actually Make the Payment

You know what you owe. You know when it’s due. Now, how do you get the money to the CRA? There are three methods, and they each have quirks.

My Business Account (CRA Online Portal)

Log into your CRA My Business Account, navigate to payroll, and submit your remittance electronically. You’ll need your payroll account number (your 15-character business number with the RP extension). The payment processes same-day if submitted before the cutoff, but give yourself a buffer. “I submitted it at 11:58 PM on the due date” is a gamble nobody should take.

Online Banking (Pre-Authorized Debit or Bill Payment)

Most Canadian banks let you set up the CRA as a payee. You enter your payroll account number, the payment amount, and submit. Processing time varies by institution, typically one to two business days. This means if your deadline is the 15th and you submit on the 14th through online banking, it might not clear until the 16th. The CRA counts the date they receive it, not the date you sent it.

That detail has cost more employers more penalties than I can count.

At a Canadian Financial Institution

You can walk into a bank with a completed PD7A remittance form and make the payment in person. This method gives you a receipt with a timestamp, which is useful if there’s ever a dispute about timing. It’s also the slowest and most inconvenient method, which is why most companies have moved away from it.

Your PD7A: The CRA’s Report Card on Your Remittances

Every quarter, the CRA sends you a PD7A, the Statement of Account for Current Source Deductions. Think of it as a reconciliation report. It shows what the CRA thinks you owe versus what they’ve received.

If those numbers match, you’re fine. If they don’t, you have a problem.

Common reasons for PD7A discrepancies:

• Payment was applied to the wrong payroll account number (you might have multiple RP accounts)
• Online banking payment didn’t include the correct reference number
• You adjusted an employee’s pay retroactively but didn’t adjust the remittance
• Taxable benefits were added to T4s at year-end but not remitted during the year

When the PD7A shows a balance owing, the CRA doesn’t wait for you to sort it out. Interest starts immediately. If you think there’s an error, you need to call the business enquiries line and reconcile it yourself. The burden of proof is on you.

Keep every remittance confirmation number. Every bank receipt. Every My Business Account transaction record. The CRA can audit payroll records going back six years, and “our old system didn’t save confirmations” won’t help.

Year-End Reconciliation: Where Everything Has to Add Up

February is the month that tests every payroll team. By the last day of February, you need to file your T4 information return, and every number on it needs to reconcile with what you remitted throughout the year.

Total CPP deducted across all employees? Must match total CPP remitted plus your employer match. Total EI withheld? Must match remittances at 1.4x the employee total. Total income tax? Must align with what you sent in each period.

If there’s a shortfall, the CRA will issue an assessment. If there’s an overpayment, you can request a refund, but that process takes weeks. Sometimes months.

The companies that have the smoothest year-ends are the ones whose payroll system handles remittance tracking in real time, not the ones scrambling to reconstruct 12 months of payment records from bank statements in January.

A Calendar You Can Actually Follow

Here’s what a regular remitter’s year looks like, stripped down to what matters:

• Monthly (by the 15th): Remit all CPP, EI, and income tax deducted in the previous month
• Quarterly (PD7A review): Compare your records against the CRA’s statement of account. Fix discrepancies immediately.
• December: Final remittance for the year. Double-check taxable benefits are included in the last pay run.
• February 28: T4/T4A filing deadline. RL-1 for Quebec employees. Everything reconciles or everything unravels.

For accelerated remitters, the calendar is tighter. Threshold 1 has two deadlines per month. Threshold 2 has a deadline within three working days of every single pay run. If you’re running weekly payroll on a Threshold 2 schedule, that’s roughly 52 remittances per year with razor-thin windows.

At some point, this stops being a process problem and becomes a systems problem.

The Part Nobody Talks About

Here’s what frustrates me about payroll remittance in Canada. The system is designed for large employers. Threshold 2 accelerated? Those companies have payroll departments. Plural. They have compliance officers and treasury teams and automated ERP systems that handle remittance as a background process.

But the small manufacturer with 90 people? The nonprofit with 120 staff across three provinces? They’re held to the same penalty percentages. The same interest rates. The same documentation requirements.

The CRA doesn’t grade on a curve.

So if you’re running payroll for a company in that 50 to 500 employee range, this is the compliance risk that deserves your attention. Not because remittance is complicated in theory. It’s not. But because the margin for error is exactly zero, and the cost of a single missed deadline is disproportionate to the offence.

Get the system right. Automate the deadlines. Keep your confirmations. And if your current setup relies on anyone remembering a date, fix that first.