Payroll Tax Filing in Canada: How to Register, Deduct, Remit, and File T4s
Payroll tax filing in Canada is the full employer workflow for payroll compliance. Payroll tax filing covers setup, employee forms, source deductions, CRA remittances, year-end slips, and recordkeeping. Employers usually follow the same order: register the payroll account, collect employee data, calculate deductions, remit on time, file T4s, and keep records.
What does payroll tax filing mean in Canada?
What are the most common payroll taxes?
Income tax, CPP, CPP2, and EI are the main payroll amounts most Canadian employers handle. Income tax is withheld from the employee. CPP and EI are withheld, too, and the employer adds its own share. Quebec payroll changes the mix because Quebec uses provincial income tax, QPP, and QPIP rules.
CRA and Revenu Québec publish the rates and rules behind the summary below. CRA lists the 2026 base CPP rate at 5.95%, the 2026 CPP2 rate at 4%, and the 2026 basic exemption at $3,500. CRA also lists the 2026 EI employee rate at 1.63% outside Quebec and 1.30% in Quebec, with maximum insurable earnings of $68,900.
| Payroll component | Deducted from employee? | Does the employer also pay? | Key rule | Sent to |
|---|---|---|---|---|
| Income tax | Yes | No | Amount changes by TD1 claims, province of employment, and pay frequency | CRA |
| CPP | Yes | Yes | Base pension deduction on pensionable earnings up to the first annual ceiling | CRA |
| CPP2 | Yes | Yes | Second CPP layer on earnings above the first ceiling and up to the second ceiling | CRA |
| EI | Yes | Yes | Employee premium plus a higher employer premium | CRA |
| Quebec income tax | Yes | No | Quebec uses its own provincial source deduction system | Revenu Québec |
| QPP | Yes | Yes | Quebec pension deduction replaces CPP for Quebec employment | Revenu Québec |
| QPIP | Yes | Yes | Quebec parental insurance deduction applies in Quebec payroll | Revenu Québec |
How do I know how much income tax to withhold for each employee?
What documents do you need for payroll?
Payroll documents include employee setup forms, payroll run records, remittance support, and year-end slips. Payroll documents usually include the SIN record, federal TD1, provincial or territorial TD1, Quebec source deduction forms when relevant, pay rate details, the payroll register, remittance confirmations, ROE support when an interruption of earnings happens, and year-end slips and summaries.
CRA keeps the retention rule clear. CRA generally requires payroll records and support documents to be kept for six years from the end of the last tax year they relate to. CRA and Revenu Québec support the checklist below as a practical payroll file set. Service Canada requires an ROE when an employee has an interruption of earnings.
| Document | When you need it | Who provides it | Why it matters | Retention note |
|---|---|---|---|---|
| SIN record | At hiring | Employee | Identifies the employee for payroll reporting | Keep with payroll records |
| Federal TD1 | At hiring and when claims change | Employee | Sets federal tax credit claims | Keep with payroll records |
| Provincial or territorial TD1 | At hiring and when claims change | Employee | Supports local withholding | Keep with payroll records |
| Quebec source deduction form | At the hiring in Quebec cases | Employee | Supports Quebec income tax withholding | Keep with payroll records |
| Pay rate and employment terms | At hiring and on updates | Employer | Supports gross pay and status records | Keep with payroll records |
| Payroll register | Every pay run | Employer | Tracks gross pay, deductions, employer costs, and net pay | Keep with payroll records |
| Remittance confirmations | Every remittance | Employer or bank | Proves payment timing and amount | Keep with payroll records |
| ROE support | When an interruption of earnings happens | Employer | Supports EI reporting | Keep with payroll records |
| T4 slips and T4 Summary | At year-end | Employer | Completes employee and CRA reporting | Keep with payroll records |
| RL-1 slips and RL-1 summary | At year-end in Quebec cases | Employer | Completes Quebec reporting | Keep with payroll records |
How to remit payroll deductions to the CRA
Employers remit payroll deductions to the CRA by calculating source deductions, identifying the assigned remitter type, and paying by the correct due date. CRA uses four main schedules: quarterly, monthly, threshold 1 accelerated, and threshold 2 accelerated.
CRA also treats two exceptions separately. CRA asks for a nil remittance report when no payroll deductions are due for a period, and CRA asks for a final remittance within 7 calendar days if the business stops, changes legal status, enters bankruptcy or receivership, or is reorganized.
CRA sets the remittance schedule below. Revenu Québec uses its own source deduction schedule for Quebec amounts.
| Remitter type | Frequency | Due date pattern | AMWA trigger |
|---|---|---|---|
| Quarterly remitter | 4 times a year | April 15, July 15, October 15, January 15 | $0 to $2,999.99, plus eligibility conditions |
| Regular remitter | Monthly | 15th day of the next month | $0 to $24,999.99 |
| Accelerated remitter, threshold 1 | Up to 2 times a month | 25th of the same month, then 10th of the next month | $25,000 to $99,999.99 |
| Accelerated remitter, threshold 2 | Up to 4 times a month | 3rd working day after each short remittance period | $100,000 or more |
The payroll example makes the order of operations easier to see.
Payroll example: an Ontario employer pays one employee $2,000 biweekly in 2026 and stays below the CPP2 range for that pay period.
Employee CPP is about $110.99. Employee EI is about $32.60. Employer CPP is about $110.99. Employer EI is about $45.64. Income tax still depends on the TD1 claims and the province of employment, so the employer confirms the final tax amount in PDOC before releasing pay. The employer then remits the deductions and employer shares by the 15th of the next month if CRA has assigned regular monthly remitting.
| Worked example item | Example amount | Note |
|---|---|---|
| Gross pay | $2,000.00 | Biweekly pay |
| Employee CPP | $110.99 | Example based on the 2026 base CPP rate |
| Employee EI | $32.60 | Example based on the 2026 regular EI rate |
| Income tax | PDOC result | Based on TD1 and province |
| Employer CPP | $110.99 | Matches employee base CPP |
| Employer EI | $45.64 | Higher than employee EI |
| Remittance date | 15th of next month | Regular remitter |
Where can I pay my payroll taxes?
CRA offers several payment methods. CRA lists online or telephone banking, My Payment, pre-authorized debit, and payment through a financial institution. Revenu Québec also accepts online financial institution payments, pre-authorized debit, in-person financial institution payments, and mail.
Can you pay payroll tax online?
Employers can pay payroll tax online through CRA-approved payment methods. Employers still need the correct RP payroll account, the correct remittance period, and the correct payment timing. Quebec employers also need the right Revenu Québec payment path for Quebec source deductions and employer contributions.
Quick Method vs regular method: which affects your remittance?
The Quick Method changes how eligible businesses calculate net tax to remit, but it does not change the GST or HST rate charged to customers.
What Quick Method is and who may qualify
The CRA’s Quick Method of Accounting for GST/HST is an election that can simplify remittance for some small registrants. Many users qualify only if annual worldwide taxable supplies, including associates, stay at or below $400,000. Quick Method is not the same as standard ITC treatment. It still requires the normal GST or HST rate to be charged on sales, and it can include a 1% credit on the first $30,000 of eligible supplies each fiscal year.Does Quick Method reduce paperwork or increase risk?
Quick Method can reduce line-by-line complexity, but it can also reduce access to ITCs on most operating expenses. The regular method can be better when operating-expense ITCs are meaningful or when the business needs cleaner, more conventional reporting.The Acctax Approach: Method choice is a calculation question, not a shortcut question. Acctax compares revenue mix, expense mix, and reporting period before advising which fits your remittance profile.
What changes by province, and what is unique to Quebec?
The Province of Employment changes payroll treatment across Canada. The province of employment affects which payroll tables and withholding rules apply, especially for provincial income tax and the Quebec branch.
Quebec is the main exception
Quebec payroll replaces CPP with QPP, adds QPIP, uses Revenu Québec for provincial source deductions and employer contributions, and often requires RL-1 year-end filing.
Ontario: Practical local rule
WSIB says most Ontario businesses with employees must register within 10 calendar days of hiring the first employee.
What do you file at year-end: T4 slips and T4 Summary
Year-end payroll filing gives employees a T4 slip and gives the CRA a full T4 return. CRA says the 2025 T4 filing due date is March 2, 2026, because the normal last-day-of-February deadline fell on a weekend. Employers must give the employee the T4 slip and file the T4 return by that due date.
March 2, 2026
Electronic filing is required if you file more than 5 slips for a calendar year. Web Forms can handle up to 100 slips per submission.
Parallel Track
Quebec employers generally file RL-1 slips and the RL-1 summary by the last day of February, and Revenu Québec extended the 2025 filing deadline to March 2, 2026, because February 28, 2026, falls on a Saturday.
CRA and Revenu Québec use the year-end filing set below.
| Form | Who receives it | What it reports | Normal deadline | Special note |
|---|---|---|---|---|
| T4 slip | Employee | Employment income, deductions, and required boxes | Last day of February | Give the employee a copy by the deadline |
| T4 Summary | CRA | Total T4 return summary for one payroll account | Last day of February | File with the slips, not by itself |
| RL-1 slip | Employee (Quebec) | Quebec employment income and deductions | Last day of February | Quebec year-end slip |
| RL-1 summary | Revenu Québec | Quebec year-end summary | Last day of February | Same filing deadline as RL-1 slips |
How to avoid payroll filing mistakes, penalties, and record issues
Payroll mistakes usually come from late remittances, late slip filing, wrong deduction inputs, and weak records. Payroll mistakes also rise when the employer uses the wrong province of employment or skips employee forms at hiring.
The CRA Penalty Pattern
CRA charges late remittance penalties of 3%, 5%, 7%, or 10% based on how late the remittance is, and the rate can rise to 20% for repeated failures made knowingly or with gross negligence. CRA also says the minimum late T4 filing penalty is $100.
| Remittance Delay | Penalty Rate |
|---|---|
| 1 to 3 days late | 3% |
| 4 to 5 days late | 5% |
| 6 to 7 days late | 7% |
| More than 7 days late | 10% |
| Repeated Failures / Gross Negligence | Up to 20% |
Record discipline lowers risk
Record discipline makes payroll corrections easier, supports audits, and reduces year-end confusion because the remittance trail, payroll register, and employee forms are already in place.
DIY vs payroll software vs accountant, when each makes sense
Manual payroll fits the simplest setup
Manual payroll is often realistic when the business has one or two employees, stable pay, one province, limited benefits, and enough time to verify every pay run with official tools.
Payroll software fits repetitive work
Payroll software becomes more useful when payroll runs happen often, multiple employees work in different provinces, taxable benefits appear, corrections repeat, or the employer wants cleaner reports and easier year-end filing support.
Accountant support fits higher-risk payroll
Accountant support becomes more useful when Quebec payroll applies, year-end corrections pile up, or the owner wants stronger review and a lower chance of missed deadlines.
| Option | Best fit | Main strength | Main limit |
|---|---|---|---|
| Manual payroll | 1 to 2 employees, stable pay, one province | Low cost and full control | Higher risk of setup, deduction, and deadline errors |
| Payroll software | Recurring payroll, growing team, multi-province setup | Faster calculations, cleaner reports, easier filing support | Monthly software cost |
| Accountant or payroll service | Quebec payroll, complex pay, corrections, high compliance risk | Strong oversight and lower error risk | Service cost |
Payroll tax filing checklist for Canadian employers
| Step | Action | Timing | Output | Common failure point |
|---|---|---|---|---|
| 1 | Open the BN and RP payroll account | Before the first remittance due date | Active payroll account | Late registration |
| 2 | Collect the SIN, TD1 forms, and province of employment | Before the first pay run | Complete employee setup | Missing forms |
| 3 | Calculate income tax, CPP, EI, and Quebec deductions if relevant | Every pay run | Correct payroll deductions | Wrong province or outdated inputs |
| 4 | Record gross pay, deductions, employer costs, and net pay | Every pay run | Payroll register | Weak records |
| 5 | Remit source deductions and employer contributions | By the assigned due date | Paid remittance | Late payment |
| 6 | Report a nil remittance if no payroll deductions are due | By the normal due date | CRA nil report | Silence in inactive months |
| 7 | File T4 slips and the T4 Summary, plus RL-1 items in Quebec cases | By the year-end due date | Complete year-end return | Summary filed without slips |
| 8 | Keep payroll records and support documents | Six-year general retention rule | Audit trail | Missing support |
Frequently asked questions
What percentage of payroll taxes are paid by employees?
Employee payroll tax does not use one fixed percentage. Employee payroll tax includes variable income tax, base CPP at 5.95% in 2026, CPP2 when earnings cross the second threshold, and EI at 1.63% outside Quebec or 1.30% in Quebec, all subject to annual limits and payroll taxes.
How do I make a payroll report?
Employers make a payroll report by recording the employee name, pay period, gross pay, employee deductions, employer contributions, and net pay for each payroll run. Employers then tie that record to remittances and year-end slips so the numbers stay easy to trace.
How do I file a nil payroll return with the CRA?
Employers file a nil payroll return by reporting that no payroll deductions are due for the remittance period. CRA says regular and quarterly remitters can report a nil remittance by mail, and CRA tells employers to keep the TeleReply confirmation number and support records after using that method.
Payroll tax filing gets easier with a clean setup and a simple calendar. Payroll tax filing usually becomes harder only when records are weak, deadlines are missed, or payroll rules start changing faster than the business can track them. When that point arrives, software or accountant support is usually cheaper than repeated corrections.
