(Canada) CRA remitter types explained: regular, quarterly, and accelerated thresholds for growing companies
Emmanuel Amegah
September 10, 2026
One of the most operationally consequential aspects of Canadian payroll compliance is remitter category. The CRA assigns every employer a remittance frequency based on payroll size, and that frequency determines how many remittances must be made per month. Getting it wrong — specifically, remitting less frequently than required — generates late-remittance penalties even when the total amount remitted is correct.
The Four Remitter Categories
| Category | Trigger (AMW) | Frequency | Deadline |
|---|---|---|---|
| New employer | N/A (first calendar year) | Monthly | 15th of the following month |
| Regular remitter | Under $25,000 AMW | Monthly | 15th of the following month |
| Accelerated Threshold 1 | $25,000 to $99,999.99 AMW | Twice monthly | 25th of current month (days 1-15) and 10th of following month (days 16-end) |
| Accelerated Threshold 2 | $100,000+ AMW | Per pay date | Within 3 business days of each pay date |
AMW = Average Monthly Withholding from the second preceding calendar year (total source deductions remitted divided by months with employees).
How AMW Is Calculated
Example: An employer remitted $480,000 in total source deductions across all 12 months of 2024. AMW = $480,000 / 12 = $40,000 — placing them in Accelerated Threshold 1 for 2026.
If the employer only had employees for 8 months in the reference year, AMW = $480,000 / 8 = $60,000 — still Threshold 1, but note that partial-year operations produce a higher AMW.
New Employer Rules
Employers in their first calendar year default to Regular remitter (monthly, 15th deadline) regardless of payroll size. From the second year, the CRA calculates AMW from year one and assigns the appropriate category. Fast-growing startups can move directly to Threshold 1 or 2 at the start of year two.
How the CRA Notifies You
The CRA sends an annual letter at the start of each calendar year indicating the current category. It is also visible in the payroll account on My Business Account. The legal obligation to remit at the correct frequency exists regardless of whether the employer received or read the notice.
Threshold 1: The Split Remittance
Threshold 1 employers make two remittances per month — not one:
First remittance: Source deductions from pay dates 1st to 15th of the month. Due by the 25th of that same month.
Second remittance: Source deductions from pay dates 16th to end of month. Due by the 10th of the following month.
Each remittance covers only deductions from pay dates within its window. Employers who treat Threshold 1 as a single monthly remittance are late on the first half-month payment every month — 12 late filings per year.
Threshold 2: Per Pay Date Remittance
Threshold 2 employers must remit within 3 business days of each pay date. For a bi-weekly payroll, approximately 26 remittances per year. The 3-day window runs from the actual date salaries are deposited — not from the date payroll was processed. Threshold 2 remittances must be made electronically.
What Triggers a Category Change
Categories are assessed annually on January 1 based on AMW from the second preceding year.
- Regular to Threshold 1: AMW crosses $25,000
- Threshold 1 to Threshold 2: AMW crosses $100,000
- Downward transitions: AMW falls below a threshold; category decreases the following year
A company that grew significantly in 2025 will not see their category reflect that growth until 2027 (based on 2025 AMW assessed for the 2027 year).
Quarterly Remitter Option
Small Regular remitters may apply for quarterly remittance (due April 15, July 15, October 15, January 15) if they have: a perfect compliance record for the prior 12 months, consistent monthly withholding under $3,000, and at least 12 months as a Regular remitter. Apply to CRA — not automatic.
Penalties
| Days late | Penalty |
|---|---|
| 1 to 3 days | 3% of amount due |
| 4 to 5 days | 5% |
| 6 to 7 days | 7% |
| 8 or more days | 10% |
| Second or subsequent failure in same year (8+ days) | 20% |
A Threshold 1 employer remitting monthly generates a late remittance every month. By the second occurrence in the calendar year, the 20% penalty applies to every subsequent late remittance.
Common Mistakes
1. Not checking category at the start of each calendar year. The CRA notification arrives and is filed without action. A company that crossed $25,000 AMW in the reference year continues on the prior schedule — generating 12 months of Threshold 1 penalties before the error surfaces.
2. Treating the Threshold 1 25th deadline as optional. Batching both half-month remittances and paying on the 10th is late on the first remittance every month.
3. Not understanding that the category is based on the second preceding year. In 2026, the AMW that determines the category comes from 2024 — not 2025.
4. Assuming the new employer monthly default continues indefinitely. It only applies in the first calendar year. From year two, actual AMW determines the category.
5. Missing the quarterly option for small payrolls. Qualifying employers making 12 monthly remittances when 4 quarterly ones suffice is unnecessary overhead — not a penalty risk, but worth addressing.
How Cadana Supports Canadian Payroll Compliance
Monitoring AMW thresholds, flagging category transitions at year-start, splitting Threshold 1 remittances correctly, and scheduling Threshold 2 remittances within 3 business days of each pay date — Cadana's global payroll tax engine automates remitter category logic at the API layer.
Book a demo at cadanapay.com/book-demo to see how it works in practice.
Sources and References
- Canada Revenue Agency — Remittance schedules and frequencies
- CRA — Determine your remitter type
- CRA — Payroll penalties and interest
Emmanuel Amegah