Education
What is my remittance frequency with the CRA?
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When should you remit? CRA remittance schedules are based on your average monthly withholding amount over the last two years. If you’re running payroll for employees in Canada a payroll system can automate those payments to reduce the risk of a missed deadline.
CRA remittance schedules are based on your average monthly withholding amount (AMWA) over the last 2 calendar years. Remitters fall into 4 types:
Quarterly remitters who are new small employers, with a monthly withholding amount from $0 to $999.99 (and a perfect compliance record)
Quarterly remitters with an account open 12 months of longer, with a monthly withholding amount $0 to $2,999.99 (and a perfect compliance record)
Regular remitters with an AMWA from $0 to $24,999.99
Accelerated remitters with an AMWA from $25,000.00 to $99,999.99
Accelerated remitters with an AMWA of $100,000 or more
Remitters can also encounter special situations, like having no employees or only seasonal workers (nil remittances) or closing the business (final remittances).
What is my AMWA with the CRA?
Your average monthly withholding amount (AMWA) is calculated by taking the total payroll deductions you were required to remit over the last 12 months, divided by the number of months that required a payroll remittance (to a maximum of 12). This monthly withholding amount includes federal income tax, CPP contributions, and EI premiums.
The CRA remittance schedule is based on your AMWA across the previous 2 years.
When Does a Regular Remitter Become an Accelerated Remitter?
Most small employers are regular remitters, with payments due on the 15th of the following month. Threshold 1 accelerated remitters (with an AMWA between $25,000.00 to $99,999.99) remit twice per month: on the 25th of the month, and the 10th of the following month. For Threshold 2 accelerated remitters (with an AMWA above $100,000), remittances are due on the 7th, 14th, 21st, and the 3rd working day after the last day of the month.
As small employers become larger ones,for example, when they have an AMWA above $25,000 – they tip into Threshold 1 accelerated remitters. As the remittances become larger, the CRA is quicker to collect these funds!
Quarterly remitters who do not have a perfect compliance record will no longer qualify as a quarterly remitter. They will be notified in writing, and assigned a new remitter type for the following calendar year.
CRA Remittance Challenges for Small Businesses
Remember that AMWA is calculated monthly – it is the employee income tax withholdings, employee and employer portion of CPP, and employee and employer portion of EI. All of these withholdings will increase as the business grows in size. The figure is not based on company income.
What you deduct, you must remit – and because these deductions are tied to payroll, not revenue, a change in remittance frequency can sneak up on your small business!
If your AMWA is approaching one of the main thresholds: $3000, or $25,000, or $100,000, you may see changes in how often you must remit.