Canadian Payroll Remittance Deadlines Explained
Every time you run payroll in Canada, a clock starts. The Canada Revenue Agency sets firm deadlines for remitting deductions , CPP contributions, EI premiums, and income tax withheld from your employees' pay. Miss one, and penalties start the next business day. There is no grace period, no warning letter first. This guide walks through who owes what, when it's due, and the common slip-ups that catch even experienced business owners off guard.
On this page
- What Payroll Remittance Means
- Which Remitter Type Are You?
- Deadline Breakdown by Category
- How CRA Penalties and Interest Stack Up
- The penalty tiers
- What this looks like in practice
- The Mistakes That Catch Businesses Off Guard
- Misclassifying workers
- Confusing pay dates with remittance dates
- Staying on Top of It
- When Managing This In-House Stops Making Sense
What Payroll Remittance Means
Every time you pay an employee in Canada, three deductions come off their gross wages before the money lands in their account. The first is their share of Canada Pension Plan contributions, the second is Employment Insurance premiums, and the third is federal and provincial income tax. These amounts belong to the government, not to your employee, and your job as the employer is to collect them and forward them to the Canada Revenue Agency on a set schedule. You also add your own employer portion on top of the CPP and EI your employee contributes, which is why the total remittance is always larger than what you withheld from the paycheque.
The reason the employer sends the money rather than the employee is straightforward. The CRA holds you responsible for accurate collection at source, meaning the obligation transfers to you the moment you run payroll. If a remittance is short or late, the agency looks to the business, not to the worker, to make it right. Think of yourself as the government’s collection agent for every pay period. Getting that transfer to the CRA on time and for the correct amount is what Canadian payroll remittance comes down to.
Which Remitter Type Are You?
The CRA places every business into one of four remitter categories, and the dividing line is your average monthly withholding from two calendar years ago. Regular remitters send payroll deductions once a month and account for the majority of Canadian employers. Quarterly remitters get an even longer runway, but only if your average monthly withholding is under $3,000 and your compliance record is clean. Accelerated Threshold 1 remitters, whose average monthly withholding runs between $25,000 and $99,999.99, must remit twice a month. Accelerated Threshold 2 remitters, sitting at $100,000 or more, face a much tighter schedule tied to actual pay dates, sometimes requiring remittance within days of each payroll run.
What catches many business owners off guard is that the CRA reassesses your category each year based on a prior reference period. A strong hiring year or a few sizeable bonuses can push you into a faster-moving tier without any direct notification you’d think to act on. A company that ran payroll for ten people for years as a regular remitter might add a handful of staff mid-year and find itself bound by accelerated deadlines it never planned for come January. Staying on top of your payroll deduction obligations means checking your assigned category at the start of each year, not assuming last year’s schedule still applies.
Deadline Breakdown by Category
The deadline attached to each category depends on how much payroll tax you submitted in the previous year. New employers and small businesses with an average monthly withholding amount below $3,000 are classed as regular remitters, with source deductions due by the 15th of the month following the pay period. Quarterly remitters, a group available to businesses with a strong compliance history and low monthly withholdings, get more breathing room and submit four times per year. The table below lays out where each category sits.
| Remitter Type | Average Monthly Withholding | Due Date |
|---|---|---|
| Quarterly | Under $1,000 (and CRA-approved) | 15th of month after each quarter ends |
| Regular | Under $25,000 | 15th of the following month |
| Accelerated Tier 1 | $25,000 to $99,999.99 | Within 3 banking days of the 15th and last day of the month |
| Accelerated Tier 2 | $100,000 or more | Within 3 banking days of each Wednesday payroll |
The gap between regular and Tier 2 is material. A regular remitter paying staff on the 30th has until the 15th of next month to settle up, a window of roughly two weeks. A Tier 2 employer running that same payroll on a Wednesday has three banking days. Miss that window and Canadian payroll penalties start at 3% and climb to 10% depending on how late the payment lands. Knowing which category applies to your business is not a detail you can leave until year-end.
How CRA Penalties and Interest Stack Up
The penalty tiers
Missing a remittance deadline does not produce a flat fine you pay and move on from. The CRA applies a tiered penalty structure that gets progressively worse the later you are. A first offence typically triggers a 3% penalty on the amount owing if you remit between one and three days late, rising to 5% at four to five days, 7% at six to seven days, and 10% if you are more than seven days late or fail to remit at all. Miss a deadline for the second time in a calendar year and that top rate climbs to 20%.
On top of the penalty itself, the CRA charges prescribed interest that compounds daily, calculated from the due date until full payment is received. Depending on the quarter, that rate has historically sat between 7% and 10% annually, which is not trivial when you factor in the daily compounding.
What this looks like in practice
Consider a company with a monthly payroll remittance obligation of $18,000 that slips nine days past the due date on a first offence. That is a $1,800 penalty before a single day of interest is counted. If the same business misses again in the same year, the penalty doubles to $3,600 on a comparable remittance. The CRA can also assess these penalties per payroll period, so a pattern of late payments compounds the exposure fast. Getting the dates right from the start is far cheaper than managing the fallout.
The Mistakes That Catch Businesses Off Guard
Misclassifying workers
One of the most common errors I see is miscategorising a new hire. A worker brought on as an independent contractor who should have been classified as an employee means no CPP or EI was withheld from day one. When the CRA reviews the arrangement and disagrees with your classification, you can be on the hook for both the employee and employer portions of those contributions going back to the start date, plus penalties that have been accumulating the whole time.
The employer share of CPP and EI catches people off guard repeatedly because it sits outside the amounts on the paycheque, and it’s easy to lose track of in a busy period. If you’re managing Canadian payroll without dedicated support, build a separate line item for that employer-side obligation so it never gets absorbed into general cash flow.
Confusing pay dates with remittance dates
The timing trap is subtler and probably generates the most avoidable penalties. Pay date and remittance due date are not the same thing, and treating them as interchangeable is a real problem. You might run payroll on the 28th and deposit wages the same day, but your remittance could be due on the 15th of the following month, or sooner if you’ve crossed into accelerated remitter thresholds. Missing that window by a single day triggers a penalty.
Threshold changes happen automatically once your average monthly withholdings hit the CRA’s trigger levels. A business that grew its headcount through the year can find itself on a tighter schedule than it was in January without ever receiving a formal notice about it.
Staying on Top of It
The most reliable system is also the least glamorous one. Calendar reminders set to fire a week before each deadline, paired with a payroll schedule that maps directly to your CRA remitter category. Register for CRA My Business Account if you haven’t already. It lets you view your payroll account balance, submit remittances electronically, and confirm receipt without mailing a cheque and hoping it lands on time. Electronic payments through My Business Account or your bank’s bill payment portal typically post the same day, which removes the guesswork around processing delays.
Where businesses tend to get into trouble is not negligence but growth. A company that was comfortable running payroll manually at ten staff finds itself at thirty, straddling an accelerated remitter threshold, managing more complex deductions and a harder deadline window. That’s the point where the administrative load stops being manageable as a side task. Handing remittance responsibility to a specialist, whether through a payroll provider or an employer of record arrangement, is a straightforward risk calculation. Missed remittances attract penalties starting at three percent and compound quickly, so the cost of getting support is almost always lower than the cost of getting it wrong.
When Managing This In-House Stops Making Sense
For a business with a handful of staff, handling remittances internally is manageable, if time-consuming. The problem tends to surface gradually. Someone on a small team takes on payroll as a secondary responsibility and for a while it holds together. Then a new hire changes the frequency threshold, a statutory holiday falls mid-period, or a province-specific rule gets missed, and suddenly you’re looking at a penalty that far outweighs whatever you saved by keeping it in-house. The administrative load rarely stays flat. It grows with every hire, every rule change, and every quarter where something doesn’t quite line up.
The honest tipping point for most small and mid-sized businesses isn’t a crisis. It’s the slow realisation that the hours spent tracking due dates, calculating CPP and EI splits, and filing on time are hours pulled away from things that move the business forward. An employer of record arrangement changes that equation entirely because the compliance obligation transfers to the EOR, not just the task. If you’re at the point where Canadian payroll administration is eating into time your team should be spending on growth, map out what that overhead actually costs before assuming in-house is the cheaper option.
