One of the most common questions we hear from our clients is “how do I make my tax payment”?
Canada Revenue Agency (“CRA”) offers a number of options for making payments, allowing you to choose the payment method that best suits your immediate needs. In the past, the only options available to taxpayers (individuals or businesses) would have been to use a remittance form provided by CRA to pay at the bank teller or through Canada Post. The remittance forms had magnetic ink encoding so the payment would be applied to the correct taxpayer and tax year. These old-school remittance forms are still provided by CRA but they are certainly moving toward more electronic options. We believe these new options are actually easier for taxpayers.
The two most common electronic options are making payments using your financial institution’s online banking bill payment service or via CRA’s My Payment service. Let’s look at these options.
Payment using online banking is as simple as setting up a new payee, like a utility bill or credit card. For individuals, you simply enter your SIN for your account number and select the payment option (e.g., payment on filing, arrears balance or installment). Businesses typically have to select “Business Tax Payment” or a similar option within bill payments to get to the CRA payments. Once there, you select the type of payment (GST, corporate tax or payroll). Most banks also allow you to file your GST or payroll remittance at the same time as payment.
CRA’s My Payment service is relatively new and uses the same online banking login information (so you don’t have to remember another dreaded password). Unlike online banking which can take a day to process, with My Payment you get an immediate confirmation; great for those late minute tax payments. The steps for My Payment are very similar to online banking: first, select your payment type, account number, payment period and amount. Once you are happy with the payment to be made, confirm and click “Pay Now” to proceed to select the bank to pay from.
Of course, we would be remiss if we left out credit card payments, we all love the points! The option is available, but it’s not free. Two third-party providers, PaySimply and Plastiq, accept credit cards for a fee of about 2.5%.