How To Pay Your Taxes

“How do I pay my taxes?” This is one of the most common questions that we get asked. Many people believe going through the process to pay your taxes is long-winded and complicated, in truth, it’s actually straightforward and simple! There are multiple options you can choose from when deciding how to go about the process. Let’s review a few options you can choose from. 

Online Banking

To keep things simple, you can pay your taxes –both personal and business–  to the CRA through your financial institution’s online banking app or website. Once you make your payment, it will usually be received by the CRA within 5 business days. This method is a quick, easy 3 step process for both individual and business tax payments. 

Here are the steps to pay your taxes through online banking from the Government of Canada:

Individuals

1. Sign in to your financial institution’s online banking service for individuals.
2. Under “Add a payee” look for an option such as:
   • CRA (revenue) – current-year tax return
     • Use this option to make a payment for your current tax return. You can use this option only once per return.
   • CRA (revenue) – tax amount owing
     • Use this option to pay any amount owing.
   • CRA (revenue) – tax instalment
     • Use this option to make payments toward the future tax year.
   • CRA (revenue) – Canada emergency benefit repayment
     • Use this option to repay a Canada emergency response benefit, Canada emergency student benefit, a Canada recovery benefit, Canada recovery sickness benefit, or a Canada recovery caregiving benefit.
3. Enter your 9-digit social insurance number as your CRA account number.Ensure the number is accurate so that the CRA can apply your payment correctly.

Business

1. Sign in to your financial institution’s online banking service for businesses.
2. Under “Add a payee” look for an option such as:
   • Federal – Corporation Tax Payments – TXINS
   • Federal – GST/HST Payment – GST-P (GST-P)
   • Federal Payroll Deductions – Regular/Quarterly – EMPTX – (PD7A)
   • Federal Payroll Deductions – Threshold 1 – EMPTX – (PD7A)
   • Federal Payroll Deductions – Threshold 2 – EMPTX – (PD7A)
   • Federal – Canada emergency wage subsidy repayment
3. Enter your 15-digit business number as your CRA account number.
   Ensure the number is accurate so that the CRA can apply your payment correctly.

If you’ve already paid your taxes through your online banking in the past, no need to set up a new payee, just double check that the last payee you set up is correct and you can use that payee again!

CRA Payment Service 

Another simple method for making your tax payment is to go through the CRA Payment Service and answer each question that appears on your screen. 

For individuals, select “Make a payment”, then “an individual?” and then “Individual Income tax (T1) including instalments and amounts owing” and away you go. 

For businesses, select “Make a payment, then “business?” and then the tax type you’re looking to pay.  

After making these selections, you will be brought to a window that allows you to choose how you want to pay. CRA now allows you to use your credit card by paying through Plastic, a third-party service provider, but be aware that they will also charge an additional 2.5% fee to use that card. 

PaySimply, another third-party service provider, will accept the following payment methods with the attached fees: 

• Credit cards – 2.5% fee
• Pay with cash or debit at Canada Post – $3.95 – $7.95
• Interact E-transfer – 1% fee
• PayPal – 2.5% fee
• PayBright – fee information not disclosed  

Bank Payment

A third option to pay your taxes is through your Canadian financial institution. This process requires a personalized remittance voucher to ensure the payment is accurately applied to your tax account by the CRA. 

Order your remittance papers.

Or you can use our services and we will provide you with remittance papers with the tax filings we prepare. 

Important Notes

Limits

It’s very important that you are aware that your regular payment limits and restrictions will still apply to your tax payment, so make sure to give yourself enough time to gather the required funds, or make multiple payments, so you don’t miss the deadline.

Short Hands

Below is a list of common short hands and definitions used in forms discussing taxes and finance that you should be aware of:

• RC – Corporate taxes
• RT – GST
• RP – Payroll    
• Installment – Paying taxes for the upcoming year/period
• Amount due – payment relating to the current tax year/period
• Balance owing – paying taxes for prior year/period taxes

We want to make tax season as stress free as possible for our clients and the public. We hope the above methods and corresponding instructions will help you this tax season and allow you to make quick, easy payments.