Remittances are often referred to as source deductions although the proper term is Remittances.
When an employer pays wages, the employer is responsible to hold back (deduct) from the employee(s) wages the following deductions; EI, CPP and taxes all determined by RC’s rules.
Not only is the employer responsible to deduct EI, CPP and tax from the employee(s), the employer is also responsible to pay the employer’s share of CPP and EI. The employer does not pay an additional amount for taxes to what was deducted from the employee(s).
The employer’s share is calculated as 2 times for CPP and 2.4 times for EI. For example if an employee is held back $100 for CPP, the employer needs to pay Revenue Canada (RC) the $100 held from the employee plus $100 from the employer for a total of $200. Example 2, in the case of EI, if an employee was held back $60.00 for EI; the employer needs to pay the $60.00 held back from the employee plus $84 from the employer for a total amount of $144.
All employee(s) taxes deducted from the employee’s pay must be paid to RC. The employer in the case of taxes does not have to pay an employer’s share. In other words if $300 of tax was deducted off the wages, the employer must pay $300 to RC and no more from the employer.
Deductions made from payroll in one month are due to be paid to RC on or before the 15th of the following month. Example deductions made in month A must be paid on or before month B. RC considers the money deducted from the employee(s) to be the government’s money and not the employer’s money and not to be used to finance the employer. Therefore RC is not too kindly if you are late in paying. You may be allowed one day late but two or more you will be faced with a late payment penalty.
If the 15th falls on a stat or weekend than you are allowed to pay without penalty on the first business day after the stat or weekend; paying early will make the Government happy and your you’re life less stressful.
