Federal garnishments

Federal garnishments (also referred to as Requirements to Pay) do not require court intervention. CRA can issue garnishments directly to employers.

Federal garnishments are usually issued for:

  • Failure to pay income tax
  • Overpayment of Employment Insurance benefit
  • Overpayment of CPP benefit

CRA can claim up to 100% of an employee’s pay. If the garnishment letter fails to mention the percentage to be withheld, contact CRA to clarify.

Note: Percentage of “net” pay means Gross pay – CPP/QPP – EI/QPIP – Federal/Quebec Tax and union dues if applicable.

If an employer fails to obey a garnishment (Requirement to Pay) notice, the employer can become fully liable for the full amount of the money owing. A garnishment (Requirement to Pay) notice remains in effect until the amount is paid in full, or until CRA dismisses the employer from its responsibility.

Being served with multiple garnishments can create some difficulty. If served with multiple garnishments, call CRA and any agency that issued other garnishments to determine the best solution. Make sure to obtain any updated orders in writing.

Employers have 3 responsibilities when dealing with Federal Garnishments:

  1. Compliance - The employer becomes liable for full amount of garnishment for failure to comply.
  2. Notification - The employer must notify CRA if no wages are paid to an employee for a given period.
  3. Termination - The employer must notify CRA if the employee terminates employment.