Transcript

Host: Welcome to the segment called Remitting payroll deductions and choosing a payroll payment option part of the Payroll Information for a New Small Business video.

I'm your host Janice Novak.

With me is Frank Stewart who will share with us, in this segment, information that he has obtained from the CRA on what you need to know about remitting payroll deductions and choosing a payroll payment option.

Host: Welcome Frank. What happens after an employer has made CPP, EI, and income tax deductions?

Subject matter expert: Thank you Janice.

Once you have calculated and deducted CPP, EI, and income tax from your employee's pay, you must hold the funds in trust for the Receiver General, including the employer's portion of CPP and EI, until you remit, or send, those amounts to the CRA.

More information is available in the following publication:

T4001, Employers' Guide - Payroll Deductions and Remittances.

Host: What do you mean by "in trust"?

Subject matter expert: When the CRA says "hold funds in trust," it means that these funds must be held separate and apart from the operating funds of your business.

Think of it this way—you've paid your employees, but you've held back the CPP, EI, and income tax, plus employer portions. That money is no longer yours, and it shouldn't be treated like it is.

Host: How often should payments be made to the CRA?

Subject matter expert: It depends. Most small employers and all new employers are considered "regular" remitters.

This means they would send their payments to the CRA once a month.

In this case, they would have to remit their deductions so the CRA receives them on or before the 15^th day of the month following the month they withheld the deductions from their employee's pay.

Host: Is there an option to pay less often if you are a very small employer?

Subject matter expert: Yes, quarterly remitting gives small employers the option of remitting source deductions once every three months instead of monthly.

To qualify for quarterly remitting, an employer has to:

• have average monthly payments of less than $3,000, either last year or the year before; and
• have a perfect compliance history over the last 12 months.

Host: What are the quarterly due dates?

Subject matter expert: Quarters are based on the calendar year.

• Your January to March remittances are due on or before April 15^th.
• Your April to June remittances are due on or before July 15^th.
• Your July to September remittances are due on or before October 15^th, and
• Your October to December remittances are due on or before January 15^th.

Host: What happens if you miss a due date?

Subject matter expert: No matter what your remitter type is, if you make a payment late, there may be penalties and interest applied.

For more information, please see the Employer penalties segment of this video.

Host: Do larger employers have to pay more often?

Subject matter expert: Yes, if your average monthly payment exceeds $25,000, you may be considered an accelerated remitter, which means you have to pay more often.

Host: Where do I go for more information?

Subject matter expert: The most up-to-date resource is the payroll webpage, www.cra.gc.ca/payroll.

More information is also available in the following publication:

Guide T4001, Employer's Guide - Payroll Deductions and Remittances. Specifically, Chapter 8 deals with payment due dates, including information on accelerated remitters.

Host: Frank, if I'm a new employer, and I've deducted CPP, EI, and income tax for the first time, how do I get it to the CRA?

Subject matter expert: As an employer making your first payment, you should send a cheque or money order to your tax centre.

Make the cheque or money order payable to the Receiver General, and print your BN on your cheque. Include a letter stating:

• that you are a new remitter;
• the period your remittance covers;
• your complete employer name, address, and business telephone number; and
• your payroll account number.

Host: What happens after I send the first remittance?

Subject matter expert: After you make your first remittance, the CRA will send you a remittance form, Form PD7A, in the mail for your next remittance, and will continue to send you one each time they receive a payment.

If you do not receive a form in time for your next payment, send in the payment with all your company details and BN as described for your first payment. In your letter, be sure to state that you did not receive your remittance form.

Host: What if I prefer using electronic banking whenever I can?

Subject matter expert: My Payment is an electronic payment service offered by the CRA that uses Interac Online to allow individuals and businesses to make payments directly to the CRA from their online bank account.

You need an account at a participating Canadian bank or financial institution to use My Payment. As long as you have your business number, or BN, and your Interac limit on your debit card covers the current payment, you can use My Payment to make your payroll remittance.

For more information on participating Interac Online banks and financial institutions, go to www.cra.gc.ca/mypayment.

Host: And what if my Interac limit doesn't cover the amount of the remittance?

Subject matter expert: Then you wouldn't be able to use My Payment; however, you may also be able to remit your deductions electronically through your bank or financial institution's telephone or Internet banking service.

For more information on electronic remittances, go to www.cra.gc.ca/electronicpayments or contact your bank or financial institution.

Host: So we've touched on first-time remitters and electronic options.

Are there any other ways to make a payment once you've received a remittance form?

Subject matter expert: You can make a payment at your bank or financial institution or by mail.

If you're making your payment at your bank or financial institution, present the payment with your remittance form.

One point to note here is that if you make a payment at an automated teller machine or ATM, you should allow time for the financial institution to process the payment, and for the CRA to receive the payment. You should note that an ATM receipt is not proof of payment by the due date.

If you're mailing your payment, include the remittance form with your cheque and mail it to the address on the remittance form. If you're sending your remittance by mail, also allow sufficient mailing time to ensure the CRA receives the payment by the due date.

Host: So what happens if you open a payroll account but you don't have employees right away or if there's a period of time when you don't have employees?

Subject matter expert: Any time you do not have employees whose pay is subject to deductions for a period, you have to let the CRA know.

There are three ways you can do this:

• through My Business Account at www.cra.gc.ca/mybusinessaccount;
• through the TeleReply service at www.cra.gc.ca/telereply or by calling 1-800-959-2256;
• by mailing in your Form PD7A, indicating you don't have a remittance to send.

Host: What's a good resource for more information on payroll deductions and remittances?

Subject matter expert: You can go to www.cra.gc.ca/payroll.

More information is also available in the following publication;

Guide T4001, Employer's Guide - Payroll Deductions and Remittances, Chapter 8.

Host: Thank you Frank.

This concludes the segment on Remitting payroll deductions and choosing a payroll payment option, part of the CRA's Payroll Information for a New Small Business video.

Thank you for watching.