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

As recently our corporation received a notice from CRA advising for changing from Accelerated threshold 1 to threshold 2 remittance is because the employees pay frequent of accelerated threshold 2 remittance is based on bi-weekly not semi-monthly.

Applicability of Accelerated Threshold1 Remittance- If the person, as an employer had total average monthly withholding amount (AMWA) of $25000 to $99999.99two calendar years ago. It also includes those with associated corporations and multiple payroll accounts.

Under this approach, Canadian Revenue Agency (CRA) needs to receive the deductions by the following dates-

• For Threshold 1 Accelerated Remitters, remittances for payroll processed within the first 15 days of the month are due on the 25thday of that same month.
• For payroll processed on the 16th day of the month to the endof that same month, remittances are due by the 10th day of thefollowing month.

Applicability ofAccelerated Threshold 2 Remittance- If the person, as anemployer had total average monthly withholding amount (AMWA) of greater than $100000 two calendar years ago.

Under this approach, threshold remitter may remit the deductionsevery week i.e.4 times in a month but amounts deducted fromremuneration paid at any time of the month are due to be receivedby your Canadian financial institution no later than the thirdworking day (not including Saturdays, Sundays, or public holidays)after the end of the following periods:

• from the 1st through the 7th day of the month;
• from the 8th through the 14th day of the month;
• from the 15th through the 21st day of the month;
• From the 22nd through the last day of the month.

Therefore the corporation had remittance up to 99999.99 before, which subsequently changed to remittance above $100000 from last 2years due to which CRA sentnotice to us for changing the remittance method.

Changes in statutory remittance schedule-

Under Threshold 1- Payroll dates Remittance date

Jan.5th Duedate of remittance 25th Jan.

Jan.19th- Duedate of remittance- 10th Feb.

Feb. 2nd- Duedate of remittance- 25th Feb.

Feb.16th- Due date of remittance-10th March

Under Threshold 2- Payrolldates Remittance date

Jan.5th Due after 3 working days after 7th Jan. i.e. by10th Jan.

Jan.19th Due after 3 working days after 21st Jan. i.e.by24th Jan.

Feb.2nd Due after 3 working days after 7th Feb. i.e. by10th Feb.

Feb.16th Due after 3 working days after 21st Feb. i.e. by24th Feb.

(Assuming there is no Saturday, Sunday or public holiday inbetween)

The new remittance schedule as per Threshold 2 Remittance-

Under Threshold 2- Payrolldates Remittance date

Jan.5th Due after 3 working days after 7th Jan. i.e. by10th Jan.

Jan.19th Due after 3 working days after 21st Jan. i.e.by24th Jan.

Feb.2nd Due after 3 working days after 7th Feb. i.e. by10th Feb.

Feb.16th Due after 3 working days after 21st Feb. i.e. by24th Feb.

(Assuming there is no Saturday, Sunday or public holiday inbetween)