Question

What is the purpose of reconciling the Canada Revenue Agency account?

Answer 1

Canada Revenue Agency (CRA) issues a Statement of Account for all the Current Source Deductions. This Statement of Account is issued in a form that is then, used to remit the payments made and, to track the payments made to the CRA. The Statement of Account reviews any payments that have been made since the previous statement. Any discrepancies in the payments between the employer’s records and the Canada Revenue Agency’s statement are reviewed and resolved. The discrepancies that cannot be resolved internally are reported to the tax services office or tax centers immediately.

The total balances of the payroll register or the balances of a summary spreadsheet that has been prepared internally are used to verify that all the statutory deductions withheld from the employees’ pay, along with any employer portion, have accurately been remitted to the Receiver General. It is further verified that the remittances have been made by the appropriate due dates and that the correct business number or payroll program account number has been used. As per the employer’s records, the amounts received that are reported in the account summary and the remittance account balance sections should be the same as the amounts contributed for the CPP, EI premiums and the remitted income tax for the calendar year-to-date. The totals are then further used to match the year-end information slips and summary balance sheets.

The total payroll remittance of an organization is reconciled with the monthly statements or the statements prepared at the end of each remitting period. If the employers find any discrepancy, they try to resolve them promptly. Further, the statement is reconciled to be checked for errors in the date of posting to avoid a late payment charge.