Corporate Tax, Tax

CRA: Business Tax Payments Explained

Posted on by UpSide Accounting

The times they are a-changin’.

Those words transcend the preoccupations of the time in which Bob Dylan wrote them.  What used to be mere science fiction is our current day reality, particularly in the case of ever-evolving technologies. The Canada Revenue Agency is taking advantage of technological advances, including CRA business tax payments.

With the old way of paying business taxes, the CRA used to mail a letter with a businesses’ notice.  A representative would detach the stub on the notice and take it to the bank where the bank teller would enter this information and pay CRA directly. Nowadays, the CRA no longer automatically mails these vouchers.

CRA business tax payments are now paid online.

  Here are your options:

1. Set up a CRA My Business Account. Within an estimated 2 days by email or 5-10 days via mail, your account will be confirmed. You’ll be okay if the payment is made on the due date, as payments will post that very day. If you have multiple businesses, you can toggle between the business numbers and select company you want to pay for.

  • Go to CRA website, click on ‘My Payment Option’ or ‘My Business Account’ > payment
  • Lists HST/GST, payroll deductions, source deductions

2. If you don’t have a CRA My Business Account you still can make a payment, simply sign in to your financial institution’s online banking service.

  • Go to ‘Make Payment’.  It will post the next business day as banks post payments at the end of the business day
  • You have two options to pay via credit card – PaySimple and Plastiq – but it costs an extra 2.5% as the fees and expenses are on you. Warning that this option takes 3 business days, so you can’t do it on the day its due or your payment will be late.

3. You can still pay in person, just like the old days, but you will need a voucher to do so. Request these to be mailed to you from CRA well ahead of time. Give yourself at least ten business days. Once you have the vouchers, you can:

  • Pay at Canada Post using a QR code, although this can be complicated.
  • Mail a cheque, which will need to arrive before the due date or have Canada Post stamp the envelope before or on the due date.

But be careful! Sometimes the CRA receives and cashes your cheque, but doesn’t apply it to your account. You may get a call to tell you that your payment is late and incurring interest. It will be up to you to prove that you made the payment. 

The CRA staff can have difficulty following a payment and which account it belongs to, so make sure you keep records of cheque being cashed and keep a copy of your voucher.  Online payments really are the best option, as they are quicker and safer and tied directly to your business account.

When are CRA business tax payments due?

There are three major payments to keep track of:

  1. Corporate Tax for Canadian Control Private Corporations (CCPC), which is most common for small businesses, is due three months after yearend. So if yearend is November 31st, then tax is due the last day of February.
  2. Source Deductions, the 15th of following month they were withheld.  Of all paychecks issued in February, the amounts withheld (employee portions and the company portions) are then due on the 15th of March.
  3. HST/GST – most typlical is the quarterly remittance… 1 month after quarter ends the payment is due . CRA will also do yearly remittances, but this isn’t recommended as you’ll need to come up with the whole amount of money at the end of year.

At Upside Accounting, we always suggest using the Canada Revenue Service’s secure digital services to pay your business tax online and on time. They make it fast and easy, so you can avoid late penalties and charges and get back to business.