How to Pay CRA Online

How to Pay CRA Online

Hugh Faloon, CPA, CA, TEP, Partner

Gone are the days of having to send your cheques to Canada Revenue Agency (CRA) by snail mail or having to go to the bank and pay in person. Paying CRA is now as easy as paying the cable bill. You can pay CRA using your online banking or the “My Payment” option on CRA’s Website.

In the interest of full disclosure, I am not a fan of CRA’s “My Payment” option, especially for businesses. Some of my clients have told me stories about having issues with the “My Payment” option for their businesses because the service requires the Interac limit on their debit card to be able to cover the payment they planned on making. Because of those stories, I always recommend using online banking as the source of payment.

I have assisted clients who use BMO Bank of Montreal, Scotiabank, RBC Royal Bank, and TD Canada Trust for their online payments. According to CRA, these are the only four financial institutions currently set up for online CRA payments.

There is something to be aware of when paying online. For some reason, the payee online is CRA, even though if you were to write a cheque it would be to the Receiver General for Canada. I can remember calling TD Canada Trust on a client’s behalf because I was looking for the Receiver General in the “add a payee” list and being very surprised to learn they were supposed to select CRA.

To pay using your online banking, just follow this easy step-by-step process.

  1. Log into your online banking profile
  1. Add a payee

Individuals should look for one of CRA (revenue) (2014) tax owing, CRA (revenue) past tax owed, CRA (revenue) tax instalment, or something similar under the “add a payee” tab. Take care to ensure you select the correct year for which you are making a payment.

Businesses can use the online banking at their financial institution to pay GST/HST (BN code “RT”), Payroll Source Deductions (BN code “RP”), Corporation Income Tax (T2) (BN code “RC”), Ontario Employer Health Tax, and more.

  1. Enter the account number

For individuals, this would be your social insurance number (SIN). For businesses, this would represent your business number (BN).

  1. Making the payment

Once I have the installments calculated for my corporation, I input each monthly payment for the fiscal period. You can post date each payment and make any necessary adjustments in the future whenever you want. TD Canada Trust’s online service makes monthly payroll remittance look and feel like the old forms CRA would mail to you.

You will be presented with a screen to review the details before you proceed and confirm the payment. This gives you an opportunity to correct any errors you may have made.

Once you confirm the payment, you will see a summary of the payment with a confirmation number. I recommend printing this screen and keeping it in your physical records, or creating a PDF and filing it electronically. This is the online version of the old fashioned cancelled cheque you need if something goes wrong.

  1. Confirm payment on your next online bank statement

Your processed payment will be clearly identified on your next bank statement. I recommend confirming it went through as soon as possible.

GGFL has WIFI for all clients making it easy to come to our office with your laptop or tablet for use to walk through and set up the online payments with you.

I have found the online help line to be very helpful any time I have run into problems. I recommend sitting down with someone at your bank if your problems persist.

Using CRA’s “My Payment” option is just as easy but comes with the caveat I mentioned earlier about the Interac limit.

CRA will walk you through a step-by-step process that ends with a receipt being issued for your payment.

The online payment option was available for payments starting last year, but is starting to become a more well-known option.

Check with your bank to find out what the administrative costs are for paying online. TD Canada Trust charges $2, but think of that compared to the cost of an envelope, postage, or your time to go and pay in person. These fees are deductible for businesses.

More changes are on the way. CRA announced they are transitioning to direct deposits and are beginning to phase out the use of mail for sending cheques to Canadian tax payers. According to CRA, this will take effect permanently in 2016.

Remember to print out your payment confirmation and keep it for your records.