What are CRA payroll remittances and when are they due?

I want to pay myself a monthly wage or salary. What are payroll remittances?

Paying yourself in wages

When you pay yourself in wages, you get paid as an employee of your own business by being put on payroll or declaring a one-off bonus. Get on payroll and have the company pay income tax and CPP for you. Monthly payroll remittances are due 15 days after the month when the owner/employee got paid. 

These are the three components of payroll remittances:

  1. Your personal income taxes - This amount should be withheld at a rate in line with your personal income tax bracket. 
  2. Canada Pension Plan (CPP) - Every employee between the age of 18 and 65 has to contribute to the Canada Pension Plan. 
  3. Employment Insurance (EI) - Owners are exempt from paying EI premiums, but they can opt in. For other employees, EI is paid into for unemployment or when unusual circumstances cause employment to stop. 

Deadlines for payroll remittances

If no payroll was paid, you are still required to submit a nil remittance. Most are required to make monthly payments; some may qualify for quarterly or annual filing. 

1- Monthly - The payroll remittance is generally due the 15th of the following month after payroll was made. 

2 - Quarterly - Q1 is due April 15th, Q2 is due July 15th, Q3 is due October 15th and Q4 is due January 15th.

3- Annually - January 15th is the unofficial deadline, but you can elect to advise the CRA about a lump-sum payment.

The corporation issues a T4 slip showing the amount of wages. These must be filed by February 28 to avoid penalties of $10 a day per slip.

When to pay remittances (CRA)

Calculating your payroll remittances

Income taxes are withheld for each employee on payroll based on their individual tax brackets. The company sends this money to the government each month and it's applied to your annual tax owing. Ideally, you won't owe and will possibly receive a refund if you have other deductions. 

For CPP, there is a table showing the CRA CPP rates. The rate for 2020 is 5.25% and the employer matches this amount.

For EI, there is a table showing the CRA EI rates for 2020. The rate is 1.58% and the employer pays 1.4 times the calculated amounts.

Please note that CPP and EI both have maximum amounts that cap the amount payable based on income. 

All remittances are reported when T4s are prepared and filed at the end of the calendar year. 

CRA payroll calculator