Payroll Remittance: Step-By-Step
Here is the step-by-step process to make a payroll remittance to Canada Revenue Agency (CRA) from the RBC online business banking system. Most Canadian banks and credit unions have a similar system in their business chequing accounts and most of them follow similar procedures. Therefore, the steps shown below should work for most financial institutions.
Step 1: Choose “Tax Filing Service”
Find the “Pay Bills and Transfer Funds” section from the online banking system, then click on the “Tax Filing Service” button.
Step 2: Add Payroll Program Account
If this is the first time you make the remittance, you probably need to first add your payroll program account as the payee. Carefully review your existing options. If you cannot find “Federal Payroll Deductions – Regular/Quarterly — EMPTX — (PD7A)” option, or you find the option but the program account number is not yours, you need to add a new one.
Click on the “Add payment type” button to add your payroll account. If you are unsure about your payroll account number, please go to Questions section at the end of this article.
Step 3: Add “PD7A” as the Payment Type
Find the payment type which contains “PD7A”. You should set the filter as “Federal tax” to reduce the displayed options. For most small businesses, they are either a regular (meaning monthly) or a quarterly remitter.
Step 4: Select Payment Type (PD7A)
Once the correct payment type and account number is established, go back to the main menu and choose the payroll account you just established. Then, click “Pay” button to initiate a payment.
Step 5: Enter Payment Details
There are several items the bank will request you to enter:
- A. Payment Periods: Which month or quarter’s remittance are you trying to pay? In our example, the client is trying to remit the payroll deduction from January’s pay cheques. (If you are a quarterly remitter, enter March, June, September or December.)
- B. Gross payroll: What is the sum of the gross wages on those pay cheques (in the corresponding period)? In our example, the total wage in January 2023 is $19,167.
- C. Amount paid: How much are you remitting to CRA. This is probably the most important line on this page. You should get the number from your bookkeeper or your payroll software.
- D. Payment Date: When should RBC deduct the money from your bank account? RBC will suggest the due date as the payment date. You could pay earlier but should never pay late because CRA charges hefty fines on any late payments. In our example, we use the suggested due date (Feb 15)
- E. Number of employees: How many employees were still working on the end of the most current payment period?
Step 6: Verify and Submit
After entering all the needed information, RBC will display all information for you to confirm. Click “Submit” and you’re done!
Congratulations! You’ve now scheduled your remittance.
Questions:
1. What is my Payroll Account Number?
Your payroll program account number should be in the following format: “12345-6789-RP–1234“. The first 9 digits is your Business Number. “RP” is the CRA program identifier for all payroll accounts. The last 4 digits is the sequence number, which is “0001” for most taxpayers.
If you are still not sure about what your payroll account number is, look for the correspondences from CRA or call the CRA service centre at 1-800-959-5525.
2. When is Payroll Remittance Due?
Most businesses are required to remit payroll deductions on a monthly basis. For these businesses, the due date for payroll remittance is the 15th day of the the following month. For example, the due date for remitting the pay cheques issued in the month of July, the remittance due date is Aug 15, 2023. If the due date falls on a weekend, it is extended to the next business day.
IMPORTANT: For the payment to be processed on Aug 15, it has to be entered in the online banking system by the end of Aug 14.
3. Alternative Method?
You could use CRA MyPayment to make payments – if you have a RBC VISA Debit card though. The old Interact Debit card no longer works after May 30, 2023.
You could also set up a pre-authorized debit from CRA MyBusiness service. Your chequing account number will be needed. We recommend having a void cheque or bank deposit form next to you. However, it takes about a week to set up a payment; it is not suitable for the last-minute efforts.
Automatic Payroll Remittance
Still having issues? TaxWise Service provides comprehensive bookkeeping service to small businesses. We can help you set up automatic payroll remittance from your QBO account so that you don’t even have to walk through the process each month.
Speak to an Accountant