Penalties and interest about payroll remittance

As an employer, you have to deduct, remit, and report payroll deductions. You may be liable for penalties and interest for failure to do so.

 Failure to deduct

You can be charged a penalty of 10% of the amount of CPP, EI, and income tax you failed to deduct. The penalty can be 20% for second or later failures in a calendar year.

Failure to remit and late remittance

If you deduct the amounts, but you do not remit them or you remit them late (after due date), the penalty is:

  • 3% if it is 1 to 3 days late;
  • 5% if it is 4 to 5 days late;
  • 7% if it is 6 to 7 days late; and
  • 10% if it more than seven days late, or if no amount is remitted

Generally, the penalty is applied to the part of the amount you failed to remit that is more than $500.

The penalty can be 20% for second or later failures in a calendar year.

You will also be charge interest from the day your payment was due. 

Additional information