Payroll Tax Filing
Payroll tax filing is not a once-a-year task. It is a recurring CRA obligation that starts the moment you hire your first employee and continues with every pay run after that.
AccTax handles payroll tax filing for Canadian employers, covering payroll account setup, source deductions, CRA remittances, and year-end T4 preparation.
You May Need This Service If:
- You are hiring your first employee and have not opened a payroll program account yet.
- You are unsure whether your current source deduction remittances exactly match what the CRA expects.
- A T4 or T4 Summary filing deadline is rapidly approaching and your internal payroll records are not organized.
- The CRA has sent an unexpected payroll notice or a PD7A statement, and you need professional explanation and resolution.
- Your business expands out-of-province or operates within Quebec, adding complex, localized labor and tax rules to manage.
What Does Payroll Tax Filing Mean?
Payroll tax filing is the process of deducting income tax, CPP, and EI from employee pay, remitting those amounts plus the employer share to CRA, and reporting everything at year-end through T4 slips and a T4 Summary. The cycle repeats every pay period and closes out annually.
What Are the Most Common Payroll Taxes?
| Deduction | Paid By | Goes To |
|---|---|---|
| Income tax | Employee (withheld) | CRA |
| CPP | Employee and employer | CRA |
| EI | Employee and employer | CRA |
Do Both Employers and Employees Pay Payroll Taxes?
Yes. Employees have income tax, CPP, and EI withheld from their pay. Employers match the CPP contribution and pay 1.4 times the employee EI premium as the employer shares. Both portions are remitted together.
What You Need Before Your First Payroll Run
Before processing payroll, your business needs a Business Number (BN) and a payroll program account (RP) opened with CRA. This must happen before the first pay period, not after. You also need each employee's SIN and a completed TD1 form, which determines how much income tax to withhold based on their personal tax credits.
How Much Income Tax Should You Withhold?
Income tax withholding depends on the employee's pay, pay frequency, province of employment, and the credit amounts claimed on their TD1. CRA payroll deduction tables and online calculator apply these factors automatically. A change in salary, a new TD1, or a move between provinces changes the withholding amount, so AccTax reviews these triggers as part of ongoing payroll support rather than leaving them until year-end.
What Documents Do You Need for Payroll?
- Business Number and payroll program account confirmation
- TD1 federal and provincial forms for each employee
- SIN for each employee
- Pay rates, hours, and pay frequency
- Prior remittance confirmations and PD7A statements
- Year-to-date payroll totals if switching providers mid-year
Ready to Onboard?
Gathering these essential files upfront ensures an error-free, secure deployment of your staff payroll cycle with the CRA.
How to Remit Payroll Deductions to CRA
| Remitter Type | Threshold | Due Date |
|---|---|---|
| Regular | Under $25,000 average monthly withholding | 15th day of the month after the month deductions were made |
| Accelerated remitter, Threshold 1 | $25,000 to $99,999.99 average monthly withholding | Twice monthly: deductions from the 1st to 15th due by the 25th of the same month, deductions from the 16th to month-end due by the 10th of the following month |
| Accelerated remitter, threshold 2 | $100,000 or more average monthly withholding | Up to four times monthly, due within three working days after each weekly period ends (1st to 7th, 8th to 14th, 15th to 21st, 22nd to month-end) |
Regular remitters generally remit by the 15th day of the month after the month deductions were made. Threshold 1 and threshold 2 accelerated remitters do not follow this same schedule. Their accelerated remitter deadlines depend on the employer's assigned remitter type and average monthly withholding amount, and should be confirmed against CRA's official notice rather than assumed from a general schedule. CRA assigns this remitter type based on payroll withholding history over the prior two calendar years, and notifies employers in writing when the type changes.
Where a remittance due date falls on a Saturday, Sunday, or public holiday, CRA treats the payment as on time if it is received on the next business day.
Where Can I Pay My Payroll Taxes?
Remittances go to CRA, not to a provincial body, regardless of where your business operates. CRA assigns your remitter type based on your average monthly withholding amount from two years prior.
Can You Pay Payroll Tax Online?
Yes. Payments can be made through CRA's My Business Account, online banking using CRA as a payee, or pre-authorized debit. A PD7A statement shows the remittance amount CRA expects for the period.
What Changes by Province, and What Is Unique to Quebec?
CPP, EI, and federal income tax rules apply nationally. Provincial income tax rates differ and are reflected in the TD1 calculations and payroll tables for each province. Quebec is the main exception, since Quebec employers remit to Revenu Québec rather than CRA for provincial income tax, QPP instead of CPP, and QPIP in addition to EI. Employers with staff in Quebec manage two separate remittance relationships rather than one.
Multi-Province Rules
Managing cross-border Canadian employees requires strict compliance tracking across both federal frameworks and specific provincial mandates.
What Do You File at Year-End?
| Form | Purpose | Deadline |
|---|---|---|
| T4 Slip | Reports employee income and deductions | Last day of February |
| T4 Summary | Totals all T4 slips for the employer | Last day of February |
T4 slips must be distributed to employees and filed with CRA through Web Forms or Internet file transfer by the same deadline. Paper filing is only available if specifically authorized by CRA.
Worked example:
An employer with average monthly withholding of $18,000 is a regular remitter, paying CRA by the 15th of the following month. At year-end, they prepare one T4 slip per employee plus a T4 Summary totalling all employment income, deductions, and employer contributions for the year, filed by the last day of February.
How to Avoid Payroll Filing Mistakes and Penalties
The most common issues are missed remittance deadlines, incorrect remitter type assumptions, outdated TD1 forms after a raise, and T4s filed without matching the total remittances for the year. A wrong remittance schedule can trigger a late remittance penalty even when payroll itself was calculated correctly, since CRA's penalty structure is tied to how many days late the payment is rather than to the reason for the delay. Penalties generally range from 3% to 10% of the amount that should have been remitted, and CRA can apply penalties of up to 20% for repeated failures that are knowing or grossly negligent. CRA compares T4 Summary totals against remittances received, and mismatches generate follow-up notices. Keeping payroll records organized monthly, rather than reconstructing them in February, prevents most of these issues.
DIY vs Payroll Software vs Accountant
Manual payroll works for very small employers with simple, stable pay structures and the time to track deadlines closely. Payroll software automates calculations and remittance reminders but still requires someone to review TD1 changes, remitter type shifts, and year-end totals. An accountant adds value when you have multiple employees, provincial variations, Quebec employees, or when CRA has already sent a notice about a mismatch. AccTax works alongside whichever payroll software you use and handles the remittance and T4 filing review on top of it.
Payroll Tax Filing Checklist
Open a payroll program account before your first pay period
Collect SIN and TD1 forms from every employee
Confirm your remitter type and remittance deadline
Remit income tax, CPP, and EI plus employer share on schedule
Update TD1 information after raises or province changes
Reconcile year-to-date totals before year-end
File T4 slips and T4 Summary by the last day of February
Distribute T4 slips to employees by the same deadline
What Related Services May You Need?
GST/HST Filing
If your business is also registered for GST/HST alongside payroll obligations.
Explore ServiceMonthly Bookkeeping
Payroll entries need to be reflected accurately in your monthly financial records.
Explore ServiceCRA Notices
Expert intervention if CRA has sent a detailed PD7A or sudden payroll mismatch notice.
Explore ServiceCorporate Tax Filing
Payroll expenses and source remittances feed natively into year-end corporate filings.
Explore ServiceFAQs About Payroll Tax Filing
What percentage of payroll taxes are paid by employees?
Employees have income tax, the full CPP contribution rate, and the EI premium rate withheld from their pay. Employers match the CPP amount and pay 1.4 times the employee EI premium as their share.
How do I make a payroll report?
A payroll report summarizes deductions and remittances for a period, drawn from your payroll software or ledger. AccTax reconciles these reports against CRA remittance confirmations as part of ongoing payroll review.
How do I file a nil payroll return with CRA?
If a payroll account had no activity for a period, CRA still expects confirmation. This is handled through My Business Account or by contacting CRA directly to avoid the account being flagged as non-compliant.
Ready to Get Payroll Filing Sorted?
AccTax reviews your payroll setup, confirms your remitter type, and keeps your remittances and T4 filings on schedule.
Set Up Payroll Filing