Payroll Remittance Frequency: What Changes as Your Company Grows

Payroll Remittance Frequency: What Changes as Your Company Grows

If you are an incorporated business owner in Northern BC and you have been adding staff, there is a CRA rule worth understanding before it catches you by surprise. It is not about your revenue, your profit, or how big your company looks on paper. It is about how much you are withholding from employee paycheques each month, and it determines how often you have to send that money to the CRA.

What Determines Your Remittance Schedule

Every business that runs payroll withholds three things from each paycheque: income tax, Canada Pension Plan contributions, and Employment Insurance premiums. Your business also matches a portion of the CPP and EI amounts. All of this gets bundled together and sent to the CRA on a schedule.

That schedule is not something you choose. The CRA assigns it based on your average monthly withholding amount, calculated from your total remittances over the prior two calendar years.

The Thresholds

There are four remitter categories, and the difference between them is significant.

If your average monthly withholding is under $3,000 and you have a clean compliance record, you may qualify to remit quarterly. Most established small businesses fall into the regular category, with an average monthly withholding under $25,000, remitting monthly by the 15th.

Once your average monthly withholding reaches $25,000, you move into accelerated remitting. Between $25,000 and just under $100,000, you remit twice a month. At $100,000 or more, you are remitting within a few business days of every pay date.

Why This Catches Growing Companies Off Guard

Here is the part that matters most for expanding businesses. This threshold has nothing to do with your revenue or profitability. It is tied directly to your payroll withholding, which means it moves in lockstep with your headcount and wage levels.

A company that hires a wave of new employees in a single quarter, or brings on a few higher-paid roles, can cross the $25,000 threshold without any change in how the business is performing overall. The company looks the same from a revenue standpoint, but the remittance obligation has doubled in frequency.

Because the calculation is based on the two prior calendar years, the shift can also lag behind your current reality. You might already be well past a threshold based on this year’s payroll, while the CRA is still working from an earlier, smaller number, or the reverse can happen as growth catches up to you.

The Cost of Missing a Change

Remittance penalties escalate quickly and apply regardless of whether the miss was intentional. A late remittance can trigger a penalty that increases the longer it goes unpaid, plus daily compounding interest. A second late remittance in the same calendar year can double the penalty.

Because these are amounts withheld from your employees’ pay, the CRA treats them as funds held in trust on the government’s behalf, not as a standard business expense. This is also why directors can be held personally liable for unremitted amounts, separate from the protection a corporation normally provides.

What Growing Businesses Should Do

If your team has grown this year, or you are planning to add several positions, it is worth checking where your current average monthly withholding sits relative to these thresholds. This is especially important if you are close to the $25,000 line, since crossing it changes your remittance frequency going forward.

This is also a good moment to review your internal payroll processes. A monthly remittance schedule and a twice-monthly one require different attention to deadlines, and building that into your calendar ahead of time is far easier than adjusting after a missed payment.

Kermode Can Help You Stay Ahead of It

For incorporated businesses across Terrace, Kitimat, Smithers, and the broader Skeena region, growth is the goal, but it comes with compliance obligations that shift quietly in the background. Kermode Accounting & Advisory works with growing incorporated businesses to keep payroll compliance ahead of the curve, not catching up to it.

If your team has grown recently or you are planning to scale up, reach out to Kermode to confirm where your business stands and what to expect next.

Kermode Accounting & Advisory is a CPA-led, fully virtual accounting firm based in Terrace, BC, serving incorporated business owners across Northern BC and the Skeena region.

If you are an incorporated business owner in Northern BC and you have been adding staff, there is a CRA rule worth understanding before it catches you by surprise. It is not about your revenue, your profit, or how big your company looks on paper. It is about how much you are withholding from employee paycheques each month, and it determines how often you have to send that money to the CRA.

What Determines Your Remittance Schedule

Every business that runs payroll withholds three things from each paycheque: income tax, Canada Pension Plan contributions, and Employment Insurance premiums. Your business also matches a portion of the CPP and EI amounts. All of this gets bundled together and sent to the CRA on a schedule.

That schedule is not something you choose. The CRA assigns it based on your average monthly withholding amount, calculated from your total remittances over the prior two calendar years.

The Thresholds

There are four remitter categories, and the difference between them is significant.

If your average monthly withholding is under $3,000 and you have a clean compliance record, you may qualify to remit quarterly. Most established small businesses fall into the regular category, with an average monthly withholding under $25,000, remitting monthly by the 15th.

Once your average monthly withholding reaches $25,000, you move into accelerated remitting. Between $25,000 and just under $100,000, you remit twice a month. At $100,000 or more, you are remitting within a few business days of every pay date.

Why This Catches Growing Companies Off Guard

Here is the part that matters most for expanding businesses. This threshold has nothing to do with your revenue or profitability. It is tied directly to your payroll withholding, which means it moves in lockstep with your headcount and wage levels.

A company that hires a wave of new employees in a single quarter, or brings on a few higher-paid roles, can cross the $25,000 threshold without any change in how the business is performing overall. The company looks the same from a revenue standpoint, but the remittance obligation has doubled in frequency.

Because the calculation is based on the two prior calendar years, the shift can also lag behind your current reality. You might already be well past a threshold based on this year’s payroll, while the CRA is still working from an earlier, smaller number, or the reverse can happen as growth catches up to you.

The Cost of Missing a Change

Remittance penalties escalate quickly and apply regardless of whether the miss was intentional. A late remittance can trigger a penalty that increases the longer it goes unpaid, plus daily compounding interest. A second late remittance in the same calendar year can double the penalty.

Because these are amounts withheld from your employees’ pay, the CRA treats them as funds held in trust on the government’s behalf, not as a standard business expense. This is also why directors can be held personally liable for unremitted amounts, separate from the protection a corporation normally provides.

What Growing Businesses Should Do

If your team has grown this year, or you are planning to add several positions, it is worth checking where your current average monthly withholding sits relative to these thresholds. This is especially important if you are close to the $25,000 line, since crossing it changes your remittance frequency going forward.

This is also a good moment to review your internal payroll processes. A monthly remittance schedule and a twice-monthly one require different attention to deadlines, and building that into your calendar ahead of time is far easier than adjusting after a missed payment.

Kermode Can Help You Stay Ahead of It

For incorporated businesses across Terrace, Kitimat, Smithers, and the broader Skeena region, growth is the goal, but it comes with compliance obligations that shift quietly in the background. Kermode Accounting & Advisory works with growing incorporated businesses to keep payroll compliance ahead of the curve, not catching up to it.

If your team has grown recently or you are planning to scale up, reach out to Kermode to confirm where your business stands and what to expect next.

Kermode Accounting & Advisory is a CPA-led, fully virtual accounting firm based in Terrace, BC, serving incorporated business owners across Northern BC and the Skeena region.