Paying taxes is an essential responsibility for individuals and businesses in Canada, contributing to the smooth functioning of the country’s various programs and services. The Canada Revenue Agency (CRA) is the government agency responsible for collecting taxes. Whether you’re an individual or a business owner, understanding how to make tax payments to CRA is crucial.

Content : How to make Tax Payments to CRA

1. Pay Online Via CRA My Payment
   1. GST/HST PaymentsPayroll Payments
   1. Corporate Tax Payments
2. Pay Via Online Banking
3. What to do if you can’t pay your taxes
4. Paying Tax Installment Payments

When the time comes to paying your personal or business taxes, CRA offers several ways to pay — paying in person at your bank or any Canada Post outlet across Canada, by sending a cheque or paying online.

Pay Online Via CRA My Payment

Pay by Debit Card: CRA my payment service allows you to pay with your debit card through Interac® online.

To use this service, you need an activated debit card with one or more logos – Interac Debit, Visa Debit, Debit Mastercard. To make a payment:

• Go to CRA my payment and click pay now (the large green option)
• Select the account you would like to pay
• Select the type of payment you are making
• Enter in your business number
• Enter in the period you are paying
• Enter in the amount owing
• Hit next
• Confirm the information is accurate, and hit next
• Select your payment method
• Enter in details and make the payment
• Save the confirmation for your records!

Payments are usually processed by the CRA within 1 to 3 business days. To avoid fees and interest charges, please make sure you pay on time.

GST/HST Payments

Here’s a bit more info on payment types using CRA My Payment for GST Payments

• The amount owing – is a balance due from a CRA Notice of Assessment (NOA) or Reassessment (NOR)  – use this for most payments, either from us filing your return or a CRA notice!
• Balance due – is the balance due from a GST/HST return, before the return has been filed
• Interim – this is for any GST/HST instalment payments
• Payment on filing – this is rarely used but would be if you were filing and paying at the same time

Payroll Payments

Here’s a bit more info on payment types using CRA My Payment for payroll Payments

• Arrears Payment – is a balance due from a CRA Notice of Assessment (NOA) or Reassessment (NOR)  – use this if you are paying a balance due as noted by a CRA letter
• Regular Remittance – for your normal monthly remittances – use Quarterly or Accelerated remittances as the option if you are not a monthly remitter!
• Pensionable and insurable earnings review (PIER) – use if you are paying a balance from a PIER review from the CRA
• Balance Due – use if you are making a current, or previous year payment for an unassessed balance OR if you have a PD4R payment
• Payment on filing – this is rarely used but would be if you were filing and paying at the same time

Corporate Tax Payments

Here’s a bit more info on payment types using CRA My Payment for payroll Payments

• The amount owing – is a balance due from a CRA Notice of Assessment (NOA) or Reassessment (NOR)  
• Balance due – is the balance due from a corporate tax return, before the return has been filed
• Interim – this is for any corporate tax instalment payments
• Payment on filing – this is rarely used but would be if you were filing and paying at the same time

Pay Via Online Banking

Online banking – You can set up an electronic funds transfer to the Canada Revenue Agency (CRA) through your financial institution’s online banking app or website. To set up a payment:

• Sign in to your online banking
• Under “Add a payee” look for a relevant payee depending on the type of your payment. The payee name for each individual and business program can be found here.
• Enter your social insurance number or business number as your CRA account number.

Payments are usually received by the CRA within 5 business days. To avoid fees and interest, we recommend setting up a payment in advance.

What to do if you can’t pay your taxes

Filing Compliance – As late filing penalties can add up very quickly we recommend filing your taxes on time even if you can’t afford to make the tax payment on the same day.

Payment Arrangement – If you cannot pay in full, we recommend paying what you can by the deadline and communicate with the CRA as soon as possible to arrange the payment plan. Please note that for most tax owing, interest compounds daily, at the rate set by law, until you pay the amount you owe in full.

Paying Tax Installment Payments -How to make tax payments to CRA

Sometimes, CRA will request that you pay the current year’s taxes in installments during that year. For example, you may be asked to pay installments towards your expected 2021 taxes owing in 4 quarterly instalments throughout 2021.

Personal Income Tax Instalments – If your net tax owing is more than $3,000 in a given year, you may need to pay instalments towards your next year’s tax bill, payable quarterly – March 15, June 15, September 15 and December 15.

Corporate Income Tax Instalments – Generally, if your corporate last income tax owing is more than $3,000, you may need to pay monthly or quarterly instalment towards your next year’s tax bill.

The instalment payment frequency requirements are generally depending on your corporation type, compliance history and your current or previous year tax due. There are some special situations which CRA outlines that you do not have to pay instalments.

GST/ HST Instalments – If you are filing GST/ HST on an annual basis and your tax owing is more than $3,000 in a given year, you could be required to pay quarterly instalment payments in the following year. The payments are usually equal to one-quarter (¼) of your net tax from the previous year.

Late/ Unpaid Instalments – Interest and possible penalty charges will be applied if you do not pay your required tax instalments or paid insufficient amounts. More information about interest and penalties charges can be found here.

Contact Abdullah CPA for personalized advice.