Payroll Remitter Type and Threshold Change Calculator
The CRA has moved you to accelerated remitting and the due dates changed. Work out your average monthly withholding amount, which type applies, how far you are from the next threshold, and what one missed remittance now costs.
average monthly withholding
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The Four Remitter Types
| Type | AMWA | When You Remit | You |
|---|
Your Due Dates
| Pay Date Falls | Remittance Due |
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What One Late Remittance Costs
| How Late | Penalty Rate | On Your Current Remittance |
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Points That Decide This
What to Do Next
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Disclaimer: An employer’s remitter type is determined by its average monthly withholding amount, being the total of CPP contributions, EI premiums and income tax remitted for the calendar year divided by the number of months in that year for which the employer had to remit, and the type for a given year is based on the second preceding calendar year. A quarterly remitter has an AMWA of less than $3,000 with a perfect compliance history over the preceding twelve months; a regular remitter has an AMWA of less than $25,000 and remits by the 15th day of the month following the month of payment; a Threshold 1 accelerated remitter has an AMWA of $25,000 to $99,999.99; and a Threshold 2 accelerated remitter has an AMWA of $100,000 or more. For Threshold 1, amounts paid in the first fifteen days of a month are due by the 25th of that month and amounts paid from the 16th to the end of the month are due by the 10th of the following month. For Threshold 2, remittances are due within three working days after the end of each of the four periods in a month ending on the 7th, 14th, 21st and last day. Associated employers may be required to aggregate their withholding amounts in determining the AMWA. The failure to remit penalty under subsection 227(9) is 3% where the amount is one to three days late, 5% for four or five days, 7% for six or seven days, and 10% where more than seven days late or where no amount is remitted, rising to 20% for a second failure in the same calendar year made knowingly or through gross negligence. Amounts withheld are held in trust for the Crown and directors may be personally liable under section 227.1. Figures here are indicative for planning; the CRA’s notice of remitter type governs. This page is general information, not tax advice.
Your Type Comes From Two Years Ago
This is the detail that catches everyone. Your remitter type for this year is based on the average monthly withholding amount from the **second** preceding calendar year, not last year and not this one.
So a business that grew sharply two years ago gets reclassified now, often at a moment when nothing in the current payroll feels different. And a business that has shrunk still remits on the old faster schedule until the lag catches up.
The lag also works in your favour. A payroll that spikes this year does not change your remitting frequency until two years from now, which gives real time to prepare the cash flow rather than being caught by a letter.
The Four Types
| Type | AMWA | Remit By |
|---|---|---|
| Quarterly | Under $3,000, clean 12-month record | 15 days after quarter end |
| Regular | Under $25,000 | 15th of the following month |
| Threshold 1 accelerated | $25,000 to $99,999.99 | 25th, and 10th of next month |
| Threshold 2 accelerated | $100,000 or more | 3 working days after each quarter-month |
AMWA Is Not Your Annual Total Divided by Twelve
It is the total divided by the number of months in which you actually had to remit. For a year-round employer those are the same thing. For a seasonal one they are not.
A landscaping company remitting three hundred thousand dollars across seven months has an AMWA of about forty-three thousand, not twenty-five. That difference decides whether it is a regular or an accelerated remitter, and seasonal employers are routinely surprised by it.
Seasonal employers land in accelerated remitting far more easily than they expect. Concentrating the same annual payroll into fewer months raises the monthly average, and the calculation does not care that you had no payroll in February.
Threshold 2 Changes How You Run the Business
At Threshold 2 you remit within three working days of each of the four periods ending the 7th, 14th, 21st and last day of the month. That is four remittances a month, every month, on a three-day clock.
It is no longer something a bookkeeper does when they get to it. It needs a calendar, a backup person and enough float in the account, because a three working day window does not survive somebody being away.
- Diarise every date for the full year, not month by month
- Give a second person access to make the payment
- Set up online banking payments rather than relying on mail or in-person
- Fund the account ahead, since the timing no longer flexes
- Reconcile monthly so an error surfaces in weeks rather than at year end
The Penalty Scales With How Late You Are
Being one day late and being ten days late are different amounts, which surprises people who assume any lateness costs the same.
| How Late | Penalty |
|---|---|
| 1 to 3 days | 3% |
| 4 or 5 days | 5% |
| 6 or 7 days | 7% |
| More than 7 days, or not remitted | 10% |
| Second failure in the same year, knowing or grossly negligent | 20% |
If you have missed a date, remit today rather than waiting for the next scheduled one. Moving from eight days late to three days late is a real saving on a large remittance, and the gap between three and ten percent on a nineteen thousand dollar payment is meaningful money for a small business.
These Are Trust Funds
Source deductions are money withheld from employees and held in trust for the Crown. That is a different character from ordinary tax debt.
Directors are personally liable under section 227.1, and the CRA’s collection posture on trust funds is markedly more aggressive than on corporate tax arrears. Using source deductions as working capital during a cash flow squeeze is the single most dangerous thing a struggling business does.
Associated Employers Are Aggregated
Where corporations are associated, their withholding amounts may need to be combined in working out the AMWA. Three related companies each remitting fifteen thousand a month are not three regular remitters.
Owners running several corporations frequently assume each is assessed on its own. Worth checking before a letter arrives rather than after.
The change takes effect from January, so a letter arriving in the autumn is giving you notice, not a deadline. Our payroll compliance service handles the remittances, the calendar and the CRA correspondence.
What This Calculator Does Not Cover
- The actual source deduction calculation per employee
- Whether workers are employees at all, which is a separate question
- Quebec employers, who remit to Revenu Quebec on their own schedule
- New employers, who start as regular remitters with no history
- Taxpayer relief applications on penalties already assessed
- Director liability, which is assessed separately
Frequently Asked Questions
Common questions on remitter types and thresholds.
Related Calculators and Guides
More tools for employers.
Do Not Miss the First Accelerated Date
Send us the CRA letter and your pay calendar. We will confirm the type, build the remittance schedule for the year, and take over the filing so the dates stop being your problem.