Question

The organizations’ Controller has received a notice from the Canada Revenue Agency (CRA) advising that the organization will be changing from an Accelerated threshold 1 remitter to an Accelerated threshold 2 remitter effective with the first pay of the new year. The Controller has asked you to provide an explanation of why this change has occurred.

In addition, she wants to understand how this will impact the statutory remittance schedule. Using the Current Year calendar in the course material, provide specifics of when the remittances are due for the January and February bi-weekly payrolls starting with the first pay date of the new year which is Friday January 5^th.

Answer 1

Answer to Question : The Controller has asked you to provide an explanation of why this change has occurred.

The organisation has been reclassified from Accelerated threshold 1 remitter to an Accelerated threshold 2 remitter due to increase in average monthly witholding amount above $ 100000.

Answer to Question : In addition, she wants to understand how this will impact the statutory remittance schedule. Using the Current Year calendar in the course material, provide specifics of when the remittances are due for the January and February bi-weekly payrolls starting with the first pay date of the new year which is Friday January 5th.

The organisation will now have to make payment twice in a fortnight that is 4 times in a month

Period Due date of remittance

1st 7 days of month (1st to 7th) 3rd working day after end of 7th

next 7 days of the month (8th to 14th) 3rd working day after end of 14th day

next 7 days of the month (15th to 21st) 3rd working day after end of 21st day

next 7 days of the month (22nd to month end) 3rd working day after end of the month.

Hence, the company will pay as follows :

Period Date

1st to 7th Jan 10th Jan (Wednusday)

8th to 14th jan 17th Jan ( Wednusday)

15th to 21nd Jan 24th Jan (Wednusday)

22nd to 31st Jan 5th Feb (Monday)

The last payment will be made on 5th feb as 3rd feb is saturday - considered no to be a working day.

Explanation:

Answer to Question : The Controller has asked you to provide an explanation of why this change has occurred.

As per the laws, a remitter is classified as a threshold 2 accelerated remitter when his average monthly witholding amount becomes at least $ 100000 from two years ago (calender years).

A remitter is classified as a threshold 1 accelerated remitter when his average monthly witholding amount becomes at least $ 25000 but it is less than $ 100000 from two years ago (calender years).

Hence, the organisation has been reclassified from Accelerated threshold 1 remitter to an Accelerated threshold 2 remitter due to increase in average monthly witholding amount above $ 100000.

Answer to Question : In addition, she wants to understand how this will impact the statutory remittance schedule. Using the Current Year calendar in the course material, provide specifics of when the remittances are due for the January and February bi-weekly payrolls starting with the first pay date of the new year which is Friday January 5th.

The organisation will now have to make payment twice in a fortnight that is 4 times in a month

Period Due date of remittance

1st 7 days of month (1st to 7th) 3rd working day after end of 7th day

next 7 days of the month (8th to 14th) 3rd working day after end of 14th day

next 7 days of the month (15th to 21st) 3rd working day after end of 21st day

next 7 days of the month (22nd to month end) 3rd working day after end of the month.

Hence, the company will pay as follows :

Period Date

1st to 7th Jan 10th Jan (Wednusday)

8th to 14th jan 17th Jan ( Wednusday)

15th to 21nd Jan 24th Jan (Wednusday)

22nd to 31st Jan 5th Feb (Monday)

The last payment will be made on 5th feb as 3rd feb is saturday - considered no to be a working day.