You can pay GST/HST to the Canada Revenue Agency using several methods, including online banking, the CRA's My Payment service, pre-authorized debit, and third-party providers. The method you choose depends on whether you are an individual or a business, the amount you owe, and your preferred payment type. It is crucial to remit these taxes on time to avoid interest charges and penalties. The CRA provides specific remittance vouchers and account details to ensure your payment is correctly applied.
Understanding Your GST/HST Payment Obligations
Businesses and individuals who are registered for the Goods and Services Tax/Harmonized Sales Tax must remit the tax they have collected to the CRA on a regular reporting period. The frequency of your remittance is determined by your annual taxable supplies and can be monthly, quarterly, or annually. It is your responsibility to calculate the net tax, which is the GST/HST collected on sales minus the GST/HST paid on purchases, and submit this amount along with your return. Failing to remit the correct amount by the due date will result in the CRA charging compound daily interest and potentially imposing penalties. You must use a personalized remittance voucher, which you can request online or by phone, to help the CRA properly apply your payment to your specific GST/HST account. Keeping accurate records of all your sales and input tax credits is essential for filing an accurate return and determining your remittance amount.
Electronic Payment Methods for GST/HST
The CRA strongly encourages electronic payments for all amounts, as they are processed faster and reduce the risk of lost or misapplied payments. For corporations, effective January 1, 2024, any tax payment exceeding $10,000 must be made electronically. Electronic methods include online banking, the CRA's My Payment service, and pre-authorized debit agreements. Using online banking is one of the most common methods, where you add the CRA as a payee and select the correct account type, such as GST-P for GST/HST payments. The CRA's My Payment service is a secure portal that allows direct payments using a Visa Debit or Debit MasterCard from a participating Canadian financial institution. It is important to note that My Payment does not accept credit cards and the CRA does not charge a fee for using this service. You should always check with your financial institution regarding any daily transaction limits or fees they may impose for online payments.
Setting up a pre-authorized debit agreement is another electronic option available through your CRA My Business Account or My Account. This allows you to authorize the CRA to withdraw funds directly from your Canadian chequing account on a date you choose. Due to processing requirements between the CRA and financial institutions, your selected payment date must be at least five business days from the date you create or modify the agreement. This method is secure and eliminates the need for mailing cheques. A PAD agreement can only be set up online, not over the phone, and requires full access to your CRA account, which involves receiving an access code by mail after initial registration.
Using Third-Party Payment Service Providers
If you wish to pay using a credit card, PayPal, or Interac e-Transfer, you must use an authorized third-party service provider. These providers act as intermediaries, receiving your payment and remittance details and then forwarding them electronically to the CRA. Different providers offer different payment methods, so you can choose one that accepts your preferred card or service. It is critical to initiate your payment well in advance of the due date, as the delivery time to the CRA is determined by the third-party provider and is not immediate. All third-party service providers charge a fee for their services, which varies by provider and payment method. You can find a full list of authorized providers on the CRA website. This option is useful for individuals or businesses that do not have a suitable Canadian debit card for My Payment or prefer the convenience of using a credit card to earn rewards, though the service fee must be factored in.
Paying by Cheque, Money Order, or Cash
You can still remit GST/HST by mailing a cheque or money order, though electronic methods are preferred for speed and security. If you choose this method, make the cheque or money order payable to the Receiver General for Canada. You must include your personalized remittance voucher with the payment. Financial institutions will not accept photocopies of remittance vouchers or payment forms. It is vital to mail your payment early, as the CRA considers the payment received on the date they physically receive the cheque, not the date it is postmarked. The mailing address for GST/HST payments is Canada Revenue Agency, PO Box 3800 STN A, Sudbury ON P3A 0C3. For cash payments, you can pay at any Canada Post outlet using cash or debit. You will need to bring your remittance voucher to the counter to complete the transaction.
Special Circumstances and Important Details
There are specific rules for payments made in foreign currency or for very large amounts. If you make a payment in foreign funds, your financial institution will convert it to Canadian dollars at the exchange rate on the day of the transaction. You are responsible for any conversion fees charged by your institution. For payments exceeding $25 million, you must make arrangements directly with your financial institution prior to the transaction. Non-residents who do not have a Canadian bank account can make payments to the CRA via wire transfer in Canadian dollars. However, wire transfers are not currently available for submitting non-resident GST/HST security deposits. Always ensure you provide accurate account information and use personalized remittance vouchers to prevent the CRA from misapplying your payment, which could lead to unnecessary interest charges.
Key Steps to Ensure a Successful Payment
Following a clear process will help you pay your GST/HST correctly and on time. First, calculate your net tax owing by completing your GST/HST return for the reporting period. Second, ensure you have your remittance voucher, which contains your specific account information. Third, choose a payment method that suits your needs, considering factors like amount, due date, and convenience. Fourth, initiate the payment well in advance, especially if using mail or a third-party provider, to account for processing delays. Fifth, always keep a record of your payment confirmation, such as a receipt number from online banking or a copy of a cashed cheque. Finally, verify in your CRA account after a few business days that the payment has been posted correctly to your GST/HST account. This proactive approach minimizes errors and helps you maintain good standing with the CRA.
- Calculate your net GST/HST owing from your completed return.
- Obtain and use your personalized remittance voucher.
- Select a payment method (online banking, My Payment, third-party, cheque).
- Initiate payment well before the deadline to account for processing time.
- Keep detailed records and proof of payment.
- Verify the payment is applied correctly in your CRA account.
Common Mistakes to Avoid When Remitting
Several common errors can delay your payment or result in penalties. One major mistake is mailing a cheque without a personalized remittance voucher, which can cause the CRA to misapply the funds. Another error is assuming the postmark date is the payment date. The CRA only counts the date they receive the cheque. Forgetting to account for the five-business-day lead time when setting up a pre-authorized debit payment can mean your payment is late. Using an incorrect CRA payee account in your online banking, such as selecting an income tax account instead of the GST-P account, will send the money to the wrong place. Not checking your financial institution's daily debit card limits before using My Payment can prevent a large payment from going through. Finally, waiting until the due date to use a third-party service often results in a late payment because the funds take time to reach the CRA.
Frequently asked questions
Can I pay my GST/HST with a credit card?
Yes, you can pay GST/HST with a credit card, but not directly through the CRA. You must use an authorized third-party payment service provider. These providers accept credit cards, as well as PayPal and Interac e-Transfer, and will forward your payment to the CRA. Be aware that all third-party providers charge a fee for this service, and you should initiate the payment well before your due date as processing is not immediate.
What is the CRA My Payment service?
My Payment is a secure electronic payment service offered directly by the CRA. It allows you to make payments using a Visa Debit or Debit MasterCard from a participating Canadian financial institution. The CRA does not charge a fee for this service. It is important to note that My Payment does not accept credit cards. Before using it, you should confirm your daily transaction limits and any potential fees with your bank.
How do I set up a pre-authorized debit (PAD) for GST/HST?
You can set up a pre-authorized debit agreement online through your CRA My Business Account or My Account. You cannot set up a PAD over the phone. After signing in, you can authorize the CRA to withdraw funds from your Canadian chequing account on a date you select. You must schedule the payment date at least five business days from the date you create or modify the agreement to allow for processing between the CRA and your bank.
When is a GST/HST payment considered received if I mail a cheque?
The CRA considers a payment received on the date they physically receive the cheque at their processing centre, not the postmark date. You must make the cheque payable to the Receiver General for Canada and include your personalized remittance voucher. The mailing address is Canada Revenue Agency, PO Box 3800 STN A, Sudbury ON P3A 0C3. To avoid interest for late payment, you should mail your cheque well before the due date. The CRA encourages electronic payments as they are processed faster and reduce the risk of lost payments.
Is there a fee to pay the CRA through online banking?
The CRA does not charge a fee for payments made through your financial institution's online banking bill payment service. You can pay the CRA the same way you pay a utility bill by adding them as a payee. However, you are responsible for any fees that may be charged by your own financial institution for this transaction. It is advisable to check with your bank about their specific fees and any daily transaction limits before making a payment.
What is the rule for electronic payments over $10,000?
Effective January 1, 2024, legislation requires any tax payment from a corporation exceeding $10,000 to be made electronically. Corporations should no longer use cheques for amounts over this threshold. The CRA strongly encourages electronic payments for all amounts as they are processed quicker and reduce the risk of lost or misapplied payments. Electronic payments also make it easier for the CRA to trace a payment if needed. This rule applies specifically to corporate remittances.
Sources and further reading
- Pay CRA taxes with credit card, Interac e-Transfer, cash ... paysimply.ca
- How to Make a Payment with Canada Revenue Agency ... - DJB djb.com
- How to Pay the CRA (Income Tax or HST), Step-by- ... toroaccounting.ca
This article explains how things work and is not financial, tax or legal advice. Rules, limits and rates change, so check the current figures with the Canada Revenue Agency, your province or your financial institution before you act.