Bookkeeping Basics · Edmonton
Payroll remittances to CRA, start to finish.
Every time you pay an employee, you hold back money that belongs to CRA and add your own share on top. Here's what goes in a remittance, when it's due, and exactly how to record it.
By the Plum team- Updated Oct 2026
- 10 min read
- A remittance is employee CPP, EI and income tax withheld, plus your employer CPP and EI.
- Employer CPP matches the employee's. Employer EI is 1.4 times the employee's.
- Most small employers remit by the 15th of the following month.
- The withheld money is held in trust for CRA. Never use it for cash flow.
- Late remittances get a penalty starting at 3% on day one.
The day you hire your first employee, your business takes on a new job: collecting tax on CRA's behalf. Every paycheque has amounts held back for CPP, EI and income tax, and you add your own employer contributions on top. Sending that money to CRA is called a payroll remittance, and for a small business it's one of the deadlines CRA takes most seriously.
This guide explains payroll remittances to CRA for small business owners from first principles: what's in them, how to calculate them, when they're due, and how they flow through your books, with a fully worked example. It's written for owners in Edmonton and across Alberta, where there's no provincial payroll tax beyond WCB.
1What's in a payroll remittance
CRA calls these amounts source deductions. There are five pieces, three from the employee and two from you:
| Piece | Who pays | How it's worked out |
|---|---|---|
| CPP (employee) | Employee, withheld from pay | A percentage of pensionable earnings above the basic exemption, up to an annual maximum |
| CPP (employer) | You | Equal to the employee's CPP |
| EI (employee) | Employee, withheld from pay | A percentage of insurable earnings, up to an annual maximum |
| EI (employer) | You | 1.4 times the employee's EI |
| Income tax | Employee, withheld from pay | Federal and Alberta tax, based on pay and their TD1 forms |
Higher earners may also have second additional CPP (CPP2) on earnings above the regular maximum, which works the same way: employee portion withheld, employer matches. CRA updates rates and maximums every January, so always calculate with CRA's Payroll Deductions Online Calculator (PDOC) or payroll software that's current for the year.
2A worked payroll example
Say you own a small salon in Old Strathcona and pay one employee, a receptionist, $4,000 gross for the month. The figures below are rounded and for illustration only. Use PDOC or your payroll software for real amounts.
| Item | Amount |
|---|---|
| Gross pay | $4,000.00 |
| Employee CPP withheld | $220.65 |
| Employee EI withheld | $65.20 |
| Income tax withheld | $520.00 |
| Net pay to the employee | $3,194.15 |
| Employer CPP (matches employee) | $220.65 |
| Employer EI (1.4 x $65.20) | $91.28 |
| Total remittance to CRA | $1,117.78 |
Notice the total cost to you is not $4,000. It's $4,000 of wages plus $311.93 of employer contributions, or $4,311.93. When you budget for a hire, budget for that number.
Entry 1: on payday
On payday you record the full wage expense, your employer contributions, the cash going to the employee and the amount you now owe CRA:
| Account | Debit | Credit |
|---|---|---|
| Wages expense | $4,000.00 | |
| Employer CPP expense | $220.65 | |
| Employer EI expense | $91.28 | |
| Bank (net pay) | $3,194.15 | |
| Payroll liabilities: CRA source deductions | $1,117.78 | |
| Total | $4,311.93 | $4,311.93 |
The employee's CPP, EI and tax aren't separate expenses. They're part of the $4,000 wage expense, because they come out of the employee's gross pay. Only the employer share is an extra cost. If debits and credits are new to you, our journal entry examples walk through the basics first.
Entry 2: when you remit
By the 15th of the next month you pay CRA, which clears the liability:
| Account | Debit | Credit |
|---|---|---|
| Payroll liabilities: CRA source deductions | $1,117.78 | |
| Bank | $1,117.78 | |
| Total | $1,117.78 | $1,117.78 |
After both entries, the payroll liability account should be back to zero. At any month end, its balance should equal exactly what you'll remit next. If it doesn't, something is off.
3When payroll remittances are due
CRA assigns your remitting frequency based on your average monthly withholding amount (AMWA) from two years earlier. For most small businesses, it's one of these:
| Remitter type | Who it applies to | Due date |
|---|---|---|
| Quarterly | Some small employers with AMWA under $3,000 and a perfect compliance history | 15th of the month after each calendar quarter: April 15, July 15, October 15, January 15 |
| Regular | Most small employers | 15th of the month after the month you paid employees |
| Accelerated, threshold 1 | AMWA of $25,000 up to $100,000 | Twice a month |
| Accelerated, threshold 2 | AMWA of $100,000 or more | Up to four times a month |
The due date follows the date you paid employees, not the period they worked. Wages for the last week of March paid on April 3 belong to April's remittance, due May 15. If a due date falls on a weekend or public holiday, CRA treats the next business day as on time.
You can pay through online banking (look for the CRA payroll deductions payee), My Business Account, or at your bank with a PD7A remittance voucher. Large remittances generally have to be made electronically, so most employers simply pay online.
4Setting up payroll the right way
Alberta's employment standards add a few more pieces your payroll has to respect, including vacation pay of at least 4% (6% after five years of employment), overtime and statutory holiday pay. Our post on WCB Alberta for small business covers the WCB side, which is paid separately from CRA.
Paying yourself as an owner
If you're a sole proprietor, you don't run payroll for yourself; you take draws, and pay income tax and both halves of CPP on your profit at tax time. If you're incorporated and pay yourself a salary, it goes through payroll like anyone else's. One difference: if you own more than 40% of the voting shares, your employment generally isn't insurable, so EI usually isn't deducted. Dividends don't go through payroll at all. Our guide to salary or dividends in Alberta explains the trade-off.
5Payroll remittances in QuickBooks Online
QuickBooks Online Payroll for Canada calculates CPP, EI and income tax on each paycheque, posts the expense and liability entries for you, and keeps a running total of what you owe CRA. It also prepares T4 slips at year end. What it can't do is make you pay on time: you still send the money through your bank or CRA, then record the payment in QuickBooks so the liability clears.
If you run payroll somewhere else, such as a separate payroll provider, the pattern is the same. Post one summary journal entry per pay run (like Entry 1 above) and record each remittance against the payroll liabilities account. Then reconcile that account every month.
6Common payroll remittance mistakes
Forgetting the employer share. Remitting only what you withheld leaves you short by the employer CPP and EI, and CRA will assess the difference with penalties.
Using the work period, not the pay date. Remittances follow the date you paid. A pay run on the 1st belongs to the month it was paid.
Treating withheld amounts as cash flow. It's tempting in a slow month. It's also the most expensive money you'll ever borrow.
Calling workers contractors to skip payroll. Whether someone is an employee is decided by the working relationship, not what you call it. CRA can reassess years of CPP and EI if it decides a "contractor" was really an employee.
Old rates. CPP and EI rates and maximums change every January. Out-of-date software means wrong deductions all year.
Liability account never reconciled. If your payroll liability balance creeps up month after month, a remittance was missed or posted wrong. Catch it before the T4s are due.
Payroll is unforgiving of small mistakes but very manageable with a monthly routine. If you'd rather hand it off, Plum handles payroll and remittances for small employers across Edmonton, Sherwood Park and Spruce Grove. Book a free 15-minute call and we'll look at your setup with you.
7Questions people ask
What is included in a payroll remittance to CRA?
Three things: the CPP, EI and income tax you withheld from employees, plus your employer share of CPP (equal to the employee's) and EI (1.4 times the employee's). They're remitted together to CRA.
When are payroll remittances due for a small business?
Most small employers are regular remitters and must have the payment to CRA by the 15th of the month after the month they paid employees. Some new small employers qualify to remit quarterly, and larger employers remit more often.
What happens if I remit payroll late?
CRA charges a penalty of 3% if you're one to three days late, 5% for four or five days, 7% for six or seven days and 10% after that, plus interest. Repeated failures can bring a higher penalty.
Do I deduct EI from my own salary as a business owner?
If you own more than 40% of the voting shares of your corporation, your employment generally isn't insurable, so EI usually isn't deducted. CPP and income tax still are. Confirm your situation with CRA or your accountant.
Is Alberta WCB part of my CRA payroll remittance?
No. WCB Alberta premiums are paid to WCB, not CRA, and run on their own schedule. Track them separately in your books.
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Book a free 15-min callThis article is general information for Alberta businesses and isn't tax or legal advice. Rules and thresholds change, so confirm your situation with your accountant or CRA.