Remit by the 15th Every Month

CRA payroll compliance requires source deductions for CPP, EI, and income tax remitted by the 15th of the month following payment. First-time late payroll remittances trigger a 3% penalty; repeat offences escalate to 10% plus daily compound interest. Meeting your payroll compliance remittance deadline every month is the simplest penalty to avoid.

Know Your Remitter Frequency

CRA assigns your payroll compliance remittance frequency — regular, accelerated threshold 1, or threshold 2 — based on your average monthly withholdings. Remitting on the wrong payroll compliance schedule triggers penalties even if the total annual amount is correct. We verify your remitter type annually so your payroll compliance remittance timing matches CRA's assignment.

Reconcile PD7A Statements Every Period

CRA sends PD7A statements confirming payroll compliance remittances received for each period. Your payroll records must match every PD7A balance exactly. Discrepancies between your payroll compliance books and CRA's trust account trigger compliance reviews and additional assessments. We reconcile each PD7A against your payroll records before the next cycle runs.

Calculate Source Deductions Accurately

Payroll compliance depends on precise CPP, EI, and income tax calculations using current CRA payroll tables. Manual spreadsheets frequently miscalculate provincial rates and annual maximums. Automated payroll compliance systems apply the correct deduction tables every pay cycle, preventing the under-remittance errors that result in CRA trust account assessments and interest charges.

Report Taxable Benefits for Compliance

Company vehicles, employer-paid insurance, parking, and employee loans must be included in your payroll compliance calculations and reported on T4 slips. CRA auditors review T4s for missing taxable benefits and reassess both employer and employee. Proper payroll compliance reporting of all taxable benefits avoids these reassessments and the penalties that follow.

File T4 Summary by February Deadline

Payroll compliance requires your T4 Summary and individual T4 slips filed with CRA by the last day of February. Late payroll compliance year-end filings trigger penalties of $100 per day up to $7,500 for each failure. We prepare and file all payroll compliance year-end slips so this deadline is never missed.

Classify Workers to Maintain Compliance

Misclassifying employees as independent contractors to bypass payroll compliance deductions is a top CRA audit trigger. If CRA reclassifies the worker, you owe all unremitted CPP, EI, and income tax retroactively with penalties and interest. Correct worker classification from the first paycheque is fundamental to payroll compliance.

Issue ROEs Within Five Days

Payroll compliance requires a Record of Employment filed electronically via ROE Web within five calendar days of an employee's last day or earnings interruption. Late ROE submissions flag your payroll compliance account with CRA and delay former employees' EI benefits. We generate and file every ROE as part of standard payroll compliance processing.

Deduct Employer Costs for Tax Savings

Your corporation's share of CPP, EI, WSIB premiums, and Ontario employer health tax are fully deductible on your T2 corporate tax return. Many businesses undercount these payroll compliance employer costs at year-end, leaving legitimate deductions unclaimed. Complete payroll compliance records ensure every employer contribution reduces your corporate tax bill accurately.

Integrate Remittances With Bookkeeping

Your payroll compliance remittances must sync with QuickBooks Online or Xero so every deduction, employer contribution, and CRA payment posts to the general ledger automatically. Disconnected payroll compliance records create discrepancies between your bookkeeping and CRA trust accounts that surface during T2 corporate tax filing and year-end reconciliation.