What happens if you miss a payroll tax remittance deadline?

Managing payroll is one of the most important responsibilities for any business owner. But what happens if you miss a payroll remittance deadline? The Canada Revenue Agency (CRA) takes payroll deductions seriously, and late or missed payments can result in costly penalties and interest.

Let’s break down the consequences of missing a payroll remittance and how you can stay compliant.

What Are Payroll Remittances?

As an employer, you’re responsible for withholding and remitting:
✔️ Income tax
✔️ Canada Pension Plan (CPP) contributions
✔️ Employment Insurance (EI) premiums

These amounts must be sent to the CRA by specific deadlines, depending on your remittance schedule (monthly, quarterly, or accelerated).

Penalties for Late or Missed Payroll Remittances

If you miss a payroll tax (remittance) payment deadline, the CRA charges penalties based on how late the payment is:

• 3% penalty – 1 to 3 days late
• 5% penalty – 4 to 5 days late
• 7% penalty – 6 to 7 days late
• 10% penalty – More than 7 days late or repeated late payments within 12 months

📌 Tip: If your payment is late more than once in the same calendar year, the CRA may charge an additional 20% penalty for repeated failures to remit.

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Interest Charges on Late Payments

On top of penalties, the CRA charges daily compound interest on any outstanding payroll amounts. This interest is based on the prescribed rate and continues to accumulate until the full balance is paid.

How to Avoid Payroll Remittance Penalties

✅ Know Your Due Dates – Set reminders for remittance deadlines based on your CRA-assigned schedule.

✅ Submit Payments Electronically – Use CRA My Business Account or online banking to process payroll remittances quickly and avoid mailing delays.

✅ Use a Payroll Service – Automating payroll through a provider can help ensure deductions are made and remitted on time.

✅ Plan for Statutory Holidays & Weekends – If a due date falls on a weekend or holiday, make your payment before the next business day.

✅ Keep Records – Always track payroll transactions, remittance confirmations, and CRA correspondence to avoid disputes.

Final Thoughts

Payroll remittances aren’t just a routine business task—they’re a legal obligation. Missing deadlines can lead to costly penalties, interest charges, and unwanted stress. By staying organized and using automation where possible, you can keep your business compliant and avoid financial setbacks.

For more information, consult Canada.ca and if you’re looking for a CPA in Ottawa, please don’t hesitate to reach out.

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This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

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