Remitting your CRA source deductions doesn’t need to be a lengthy or complicated process. Here are some tips on how to streamline your CRA remittances, and what to do if you need to make a correction.
Overview of remitting CRA source deductions
Here’s some information that will help you understand more about CRA remittances.
- If you pay remuneration, you need to remit deductions to the CRA. This includes employers, administrators, trustees, and financial institutions.
- Remuneration is simply money paid for work or a service and includes everything from salary, wages, commissions, taxable benefits, and pension income. EI benefits, some withdrawals from registered plans, and some other types of payments are also remuneration.
- There is a complete index of deductions on the Government of Canada website. Check it out here.
- There are different types of remitters. To find out which type your business or your client’s business is, check out the Government of Canada website.
- If you do not remit your source deductions and employer shares of CPP and EI, the CRA can take action against you.
How to make your CRA remittance payments easy
There are several ways to submit a payment to the CRA, but some are more convenient than others. The CRA has, in recent years, added a few new ways to make payments, which helps to make sure that your payment arrives on time.
1. Pay through your online banking system
If you bank with a major financial institution, you can likely pay your CRA remittances through your online banking portal. You add the CRA to your list of payees, choose the payment type, such as “Federal – Corporation Tax Payments – TXINS” and enter your business number as your CRA account number. However, be aware that financial institutions often require you to set up online CRA remittances and may have a set-up fee. Most also charge a fee for filing your remittances so the costs can add up.
2. Use a third-party payment provider
You can also use a third-party payment provider for your CRA remittances. Plooto offers this service, and you can find out how to send your CRA remittances using Plooto here. Third parties provide different types of payment services, which means you must ensure that the solution you select is enabled for all of the remittance payment types you need. Most third parties streamline the process and eliminate the paperwork, but be sure to demo the solution to ensure that it will indeed make your CRA payments easier.
3. Make payments through CRA My Payment
The last online option for paying CRA remittances is My Payment, a service created by the CRA. You will need to use Interact, Visa Debit, or Debit MasterCard to use this option. You also need to be aware of any daily or weekly transaction limits through Interac or your Debit credit card, as you may exceed these when paying your full remittance. My Payment is also available only 21 hours per day (though the downtimes are at night) – find the schedules here. While My Payment does give you the option to pay your CRA remittances online, the experience using the site is rather clunky, so you’ll save more time using another online payment option.
4. Use the mail or visit your bank branch
The list wouldn’t be complete without these options, but sending a cheque through the mail and visiting your bank branch are neither convenient nor efficient methods to make your CRA remittance payments. You can make a payment to the CRA in person at any financial institution using your original remittance voucher. You can also mail a cheque with your business number in the memo line, and include the remittance voucher if you have it. With these options, you will successfully pay the CRA, but the process will take longer than necessary.
Did you make a mistake? Here’s how you fix it.
Despite your best efforts, you might make an error when remitting your payments. If that happens, here’s what you can do:
Did you send the CRA less than you should have? Luckily, you can simply remit any shortages using electronic payment with a remittance error form. You can also write a letter outlining the pay period that the shortage applies to and your account number. It’s important to correct this error as soon as possible - pay by the 15th of the following month to avoid a late payment.
If you’ve sent the CRA more than you should have, this error also needs to be corrected. If you over-paid in the current year, you need to reduce your next payment to the CRA by the amount that you overpaid. If you over-remitted in a previous year, you need to request a transfer or refund. You’ll have to explain the over-payment, which you can do online or through the mail using your paper information return.
3. Payment to the wrong account
If you’ve accidentally made a payment to the wrong account, this requires immediate attention. You can use your business account to transfer payments to your various accounts, and the CRA can help you if you have any questions (1-800-959-5525).
Find out how Plooto can help you streamline your CRA remittances and manage all of your business payments.