Remitted payroll deductions late, or not at all? Estimate the CRA penalty and interest on late or missed source deductions: the income tax, CPP and EI you withheld from employees, plus the employer share.
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Rates used: Late remittance tier 1 rate: 3% (source); Late remittance tier 2 rate: 5% (source); Late remittance tier 3 rate: 7% (source); More than tier 3 days late, or not remitted: 10% (source); Second or later failure in the calendar year, knowingly or grossly negligent: 20% (source); Penalty applies only to the part of the amount over this (unless knowing or grossly negligent): $500 (source); CRA prescribed rate on overdue taxes, CPP/EI and GST/HST: 7% (Oct–Dec 2026) (source).
Last updated: October 18, 2026
How the calculator works
Enter the remittance amount and the date it was due.
Say what happened: remitted late (with the date) or not remitted yet.
Answer the repeat question: whether this is a second or later failure this calendar year, made knowingly or through gross negligence.
See the result: the penalty, the interest and the total.
CRA late remittance penalty rates
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How late
Penalty
1 to 3 days
3% of the amount
4 or 5 days
5%
6 or 7 days
7%
More than 7 days, or not remitted
10%
Second or later failure in the same calendar year, made knowingly or through gross negligence
20%
The penalty applies only to the part of the late amount over $500, unless the failure was made knowingly or through gross negligence, in which case it applies to the full amount (Income Tax Act, s.227(9) and (9.1)). Interest on the unpaid amount compounds daily at the prescribed rate for overdue amounts, 7% for October 1 to December 31, 2026.
Source deductions are held in trust for the CRA. If a corporation fails to remit them, its directors can be held personally liable, jointly and severally, for the unremitted amounts plus interest and penalties. Getting remittances on schedule protects you as well as the company.
Want payroll off your plate?
T-Ledgers is a CPA-led accounting firm practising since 2020, led by Wajahat Ajmal, CPA, FCCA. We have worked with 202 clients, with a combined $60 million in client revenue.
We run payroll, calculate and remit source deductions on time, and file T4s, so late remittances stop happening. See our payroll services. If remittances were missed in the past, a voluntary disclosure may help.
Reviewed by Wajahat Ajmal, CPA, FCCA. Official sources checked October 2026.
3% if 1 to 3 days late, 5% if 4 or 5 days late, 7% if 6 or 7 days late, and 10% if more than 7 days late or not remitted. It can be 20% for a second or later failure in the same calendar year made knowingly or through gross negligence.
Yes. The late-remittance penalty applies only to the part of the amount that is more than $500. If the failure was made knowingly or through gross negligence, it applies to the full amount (Income Tax Act s.227(9.1)).
