Payroll Remittance Frequency

Definition

Remittance frequency is the CRA-assigned schedule that determines when an employer must send payroll source deductions to the government. The schedule is driven by the Average Monthly Withholding Amount (AMWA), calculated from the remitter's second prior calendar year. Higher AMWA means faster remittances because CRA is collecting a larger portion of federal revenue through that employer.

Key rules

• AMWA is the total income tax, CPP, and EI the employer remitted two calendar years ago divided by the number of months it had an RP account active.
• New employers are assigned regular (monthly) status by default until they build a two-year AMWA history.
• Quarterly status is granted only on request and only to employers with a perfect 12-month compliance record and AMWA under $3,000 (Regulations s.108(1.4)).
• Late-remittance penalties under Income Tax Act s.227(9) follow a graduated scale based on how late the payment is.

• Interest runs in addition to the penalty at CRA's daily prescribed rate.
• A remitter can request a change in frequency. CRA adjusts the classification every year based on the new AMWA calculation.

Example

A BC corporation had total source deductions (income tax + CPP + EI, employer and employee portions combined) of $180,000 in 2024 and was active for 12 months.

1. AMWA for 2026 = $180,000 / 12 = $15,000.
2. Because AMWA is below $25,000, the corporation is a regular (monthly) remitter in 2026.
3. April 2026 payroll is remitted by May 15, 2026.

If AMWA had instead been $40,000, the corporation would be Accelerated Threshold 1: source deductions from pays dated March 1 to 15 are due March 25, and pays dated March 16 to 31 are due April 10.

Common mistakes

• Using the prior calendar year's AMWA instead of the second prior year. CRA uses a two-year lag so that employers know their classification well in advance.
• Assuming quarterly eligibility continues automatically. A single late remittance in the trailing 12 months disqualifies the employer.
• Paying monthly when assigned accelerated. Even a one-day miss on an accelerated deadline triggers the 3% penalty.
• Skipping the statutory holiday adjustment. When a deadline lands on a holiday or weekend, the payment is due the next business day.
• Treating penalties as capped. Repeated failures with gross negligence escalate to 20% under s.227(9.1).

Related concepts

The remittance frequency determines the rhythm of PD7A payments under the RP account. Deduction amounts come from the three source-deduction streams: CPP, EI, and income tax.