What happens if I’m late on a payroll remittance?
CRA charges a graduated penalty on late source deductions — from 3% for a day late up to 10%, and 20% for repeat lateness — plus interest.
When you run payroll, the income tax, CPP, and EI you withhold are trust funds — CRA treats them as the government’s money sitting in your account. That is why the penalties for remitting late are steeper than almost any other filing.
The penalty ladder
CRA’s late-remittance penalty scales with how late you are: 3% (one to three days), 5% (four or five days), 7% (six or seven days), and 10% (more than seven days, or not remitted at all). If you are assessed this penalty more than once in the same calendar year and the failures were made knowingly or through gross negligence, the rate becomes 20%. Interest at CRA’s prescribed overdue rate (7% for October to December 2026, compounded daily) accrues on top.
One softening detail: CRA generally applies the penalty only to the part of the late amount over $500, unless the lateness was knowing or grossly negligent. A $700 remittance two days late is penalized on $200, not $700. A $7,000 remittance is penalized on $6,500.
Estimate the penalty on a late remittance
- Late-remittance penalty
- $450
- 10% of the amount over $500
- Interest, estimated
- $10
- 7% a year, compounded daily, on the full amount
- Added to what you already owed
- $460
- on $5,000, 10 days late
Estimate only. Uses the prescribed rate for October to December 2026; CRA resets it quarterly and also charges interest on the penalty. The $500 exclusion assumes an honest slip; CRA can penalize the full amount where it finds the lateness was knowing or grossly negligent.
When remittances are actually due
The due date depends on your remitter type, which CRA assigns from your average monthly withholding amount (AMWA) two calendar years back. New employers start as regular remitters. A due date that lands on a weekend or a CRA-recognized public holiday moves to the next business day.
| Remitter type | Average monthly withholding | Remittance due |
|---|---|---|
| Quarterly | Under $3,000 (under $1,000 for accounts open less than 12 months), with a perfect compliance record | April 15, July 15, October 15, January 15 for the quarter just ended |
| Regular | Under $25,000 | The 15th of the month after the month you paid the remuneration |
| Accelerated, threshold 1 | $25,000 to $99,999.99 | Paid on the 1st–15th: the 25th of the same month. Paid on the 16th–end: the 10th of the next month |
| Accelerated, threshold 2 | $100,000 or more | Third working day after the 7th, 14th, 21st and last day of the month, for remuneration paid in each of those periods |
Look up a due date
- Remittance due
- —
- Enter a pay date
Weekend due dates are moved to the Monday here; CRA-recognized public holidays are not, so check the calendar for those. Threshold 2 “working days” are counted as Monday to Friday.
The part owners underestimate
Directors can be held personally liable for unremitted source deductions. Corporate protection does not cover trust funds, which makes payroll remittances the one deadline you never trade against cash flow. CRA also charges a separate penalty for failing to deduct in the first place — 10% of the CPP, EI and tax that should have been withheld, 20% for knowing or grossly negligent repeats in the same year — and a demand-to-file or arbitrary assessment can follow a pattern of silence.
Already late? Do this today
- Remit now, even partially. The penalty tier is set by how late the money arrives; every day past seven is the same 10%, but interest keeps running on the balance.
- Remit through your bank or My Business Account, not a mailed cheque. Payment counts when a Canadian financial institution processes it.
- Get a first-offence penalty cancelled. A one-off slip with an otherwise clean record is exactly what the taxpayer relief provisions (Form RC4288) exist for. Ask, in writing, with the remittance already made.
If you are incorporated: take the remittance off your calendar
Remittances are late for one reason: someone had to remember them. When payroll and books run on one system, the remittance goes out with the payroll run, the PD7A is reconciled against the books, and the director never carries the trust-fund risk in their head.
taxifi payroll is $49 a month plus $10 per employee: CPP, EI and income tax calculated, remittances sent to CRA on schedule, T4s at year-end, Records of Employment when someone leaves. Not registered yet? Start with opening a CRA payroll account, and see how remittances work for the mechanics. Ottawa-based, serving all of Ontario — see our small business accountant in Ottawa page or published prices.
This is general information, not tax advice for your situation. Get started and a Canadian accountant will give you the answer for your business.
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Common questions
I missed one remittance by two days. Will CRA really penalize me?
The penalty structure starts at 3% for one to three days late, though CRA sometimes shows flexibility on a first slip. Do not build a habit on that hope; the repeat penalty is 20%.
Can CRA come after me personally for payroll amounts?
Yes. Unremitted source deductions are trust funds, and directors can be personally assessed for them. It is the sharpest edge in Canadian small business tax.
When is my payroll remittance due?
For a regular remitter, the most common type for small employers, on the 15th of the month after the month you paid your staff. Quarterly remitters pay by the 15th of the month after each quarter ends. Accelerated remitters have two or four due dates a month depending on their threshold. If the date falls on a weekend or a CRA public holiday, the next business day counts as on time.
Does the penalty apply to the whole amount?
Generally CRA applies the late-remittance penalty only to the part of the amount over $500. That protection disappears if the lateness was knowing or grossly negligent, in which case the penalty applies to the full amount.
Can CRA cancel a late-remittance penalty?
Yes, under the taxpayer relief provisions. A single late remittance with an otherwise clean record, remitted as soon as it was noticed, is the strongest case. Make the remittance first, then request relief in writing on Form RC4288; the request can be made up to ten years later.
Sources
Want the remittances handled instead? See payroll services, how remittances work, or outsourced payroll.