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 5th.

Answer 1

The reason that she was advised by the CRA that she will have to change from Accelerated threshold 1 remitter to an Accelerated threshold 2 remitter is because the employee’s pay frequent of Acceleratd threshold 2 remitter is based on bi-weekly not semi-monthly

There are two categories of accelerated remitters:

• Threshold 1 — Employers with two-year AMWA of $25,000 – $99,999.99

Remittances/payments for Threshold 1 remitters are due the 25th day of the same month for payroll processed in the first 15 days of the month. For payroll processed after the 16th day of the month, remittances/payments are due by the 10th day of the following month.

• Threshold 2 — Employers with a two-year AMWA greater than $100,000

Remittances/payments for Threshold 2 remitters are due no later than the third working day (not counting Saturdays, Sundays, or public holidays) after the 1st-7th, 8th-14th, 15th-21st and 22nd-last day of the month. In other words, no later than the 3rd business day after the week in which the payroll was processed.

Threshold 2 remitters are also required to make remittances/payments through a financial institution at least one full day before the due date in order to prevent fines.

We have to receive your deductions from your Canadian financial institution by the third working day after the end of the following periods:

■ the 1st through the 7th day of the month;

■ the 8th through the 14th day of the month;

■ the 15th through the 21st day of the month;

■ the 22nd through the last day of the month.

Changes for Threshold 2 remitters

As of February 26, 2008, for remittances due on or after that date, we will consider all payments made to the CRA at least one full day before the due date to have been made at a financial institution and a penalty will not be charged. Payments made on the due date but not at a financial institution, are subject to a penalty of 3% of the amount due.