Unlike when you have to physically visit a financial institution or your tax office to pay your tax, today, there are tons of channels you can use. These channels are swift and easy to navigate. This article will be recommending and reviewing three ways to pay CRA in Canada.
1. Online Banking
You can make your tax payment effortless online by logging in to the CRA website. This payment method is similar to how you pay your phone bill. Below are the steps on how to pay your tax online:
- Log in to your financial institution’s app.
- Navigate to “Add a payee.”
- Search for the payment option you want to make
- Input your business number as your CRA account number – this is a 15-digit number.
- Click on send
Once you click on send, your financial institution will process your payment and send it to the CRA’s account. Ensure to have enough money in your bank account before initiating the transaction. Note that your financial institution will charge you a processing fee. The amount varies per financial institution in Canada.
2. Card Payment
Another way to pay CRA in Canada is using your card via the My Payment portal. You can make payment using your Visa Debit, Debit MasterCard, or Interac Online debit card.
The My Payment portal is an online payment service designed by the CRA. It is a direct payment channel to the CRA using your bank access cards. Unlike the online banking channel, the CRA does not charge a service fee for using the My Payment portal. Note that the CRA does not accept credit cards for this service.
Using the My Payment portal is easy; below is a guide on how to make payment using this channel:
- Get a card with a Visa Debit logo, a Debit MasterCard logo, or an Interac Online logo from any eligible financial institution in Canada.
- Use the debit option if your bank access card has both a Visa Debit logo and an Interac logo.
- However, if your access card has both a Debit MasterCard logo and an Interac logo, use the Debit MasterCard option to pay.
It is advisable to note your daily/weekly transaction limit and any transaction fees for making online payments before initiating your payment.
3. Cheque/Pre-Authorized Debit (PAD)
You can make payment via your financial institution using a cheque or a pre-authorized debit (PAD). To make payment using a cheque, you will need to issue an original copy of the remittance voucher stating the amount you want to pay.
A remittance voucher is a payment slip that informs the CRA of the specific payment details you are making. It guides the CRA on the exact payment you are making, and the voucher is accessible online or by phone.
Note that financial institutions do not accept photocopies of remittance vouchers or payment forms (a payment form is a document that guides you on how to calculate a payment amount).
If you are transacting outside Canada, you must factor in the exchange rate. The exchange rate you will get will depend on the financial institution you are using. Also, any transaction fee incurred is on you.
Pre-Authorized Debit (PAD)
With a pre-authorized debit system, you do not need to send a postdated cheque to your financial institution. A PAD is an online self-service payment method available for both individuals and businesses. It is safe, secured and allows users to set their preferred payment amount.
The set amount is what your financial institution will authorize the CRA to withdraw from your chequing account. All you need to do is confirm the amount and date(s) you want your financial institution to disburse the funds. Note that you can only set a PAD agreement online.
Alternatively, you can create a PAD agreement within MyCRA by clicking on the ‘Proceed to pay’ button and the Pay later option. Here you will be able to access and pay for any amount due. Also, you can use the ‘pay by pre-authorized debit’ option via the GST/HST net file to access the amount you are owing.
It is advisable to set the payment date to at least 5-business working days from your tax due date. This is because PAD processing takes a while due to communication between the CRA and the financial institution.
Setting a PAD for Individual
Setting up an individual account is easy;
- First, register for My Account or sign in if you already have an account.
- Once you sign in, click on the Proceed to pay button.
- Click on the ‘Pay later’ option to create a PAD agreement.
- Once you are signed in, you can have access to the ‘Manage pre-authorized debit.’
- Navigate to Related services within the Accounts and payments section; you will have access to view, modify, cancel, or skip a payment.
Setting a PAD for Businesses
Below are steps on how to set up a pre-authorized debit for your business;
- First, you must register for My Business Account.
- Navigate the webpage and click on ‘CRA register’ if you do not have an account and complete the steps
- ‘Continue to Sign-In Partner’ if you already have an account and the steps.
- Once you complete the steps, the CRA will send an official access code to you by mail.
- Input the generated access code into My Business Account,
- Once your access code is verified, you can access the entire portal – you can create, modify, cancel, or skip a payment.
Note that PAD has a payment limit and service fee attached to it.
We recommend that you make timely payment of your taxes regardless of the payment method you are using. The CRA will not be responsible for any late fees or penalties that come with late payment.
Once you make a payment arrangement, ensure that the CRA receives it by the due date(s). Remember to read and understand the terms and conditions of the payment channel you are using before initiating any payment.