Entrepreneurship & Small Business

Took over Business from family member, question about PAYROLL

  • Last Updated:
  • Oct 13th, 2017 9:03 am
[OP]
Sr. Member
User avatar
Jun 24, 2015
590 posts
56 upvotes
Woodbridge, ON

Took over Business from family member, question about PAYROLL

Hello,

Let me introduce myself, my name is GoodFellaz, I am self Employed, we are a family owned small business in the restaurant industry here in Ontario. I have a question pertaining to CRA PAYROLL. The family member was doing the payroll and remittance but because he has some health issues, he had to step down and I had to take over. I had to file the quarterly remittance before the deadline which I did, but after that I had some time to go over the books and noticed my family member accidentally made an overpayment last time to our Payroll CRA account due to accounting errors. After my audit we determined that our employees got paid appropriately but due to the clerical error, we overpaid in a previous quarter, the overpayment is not small its significant, and due to forecasting, It might cover the next remittance payment, and change. If my calculations are correct and I have an overpayment, will I get dinged if I omit a remittance payment for Q4? or do I still need to report the Gross amount and remit $0 back to the CRA? how would I do such without getting penalized? I can not contact them cus theyre closed for the weekends and holidays. Any one have experience?
5 replies
Deal Addict
Feb 29, 2012
2324 posts
1173 upvotes
Richmond
The CRA goes by what you tell them. If you file a payroll report showing that you paid $x in salaries and you owe $y in payroll taxes according their mandated calculation, then that's what you need to pay them to avoid a penalty. Typically they don't redo your calculations unless something unusual raises a flag on your account.

So I would say no, you can't just decide that you overpaid them in the past and you're going to skip a payment. You need to revise the incorrect payroll report, re-submit it to the CRA, and wait for them to correct your account.
[OP]
Sr. Member
User avatar
Jun 24, 2015
590 posts
56 upvotes
Woodbridge, ON
Got clarification by Amanda from CRA this afternoon, and unfortunately, you were incorrect. I am good, the quarterly remittance does not have to be spot on, its just they want to collect as much money thru the year instead of getting it all at one shot, because they do periodic audits on it throughout the year. When I file my Employees T4's my math should add up, anything I've remitted that is extra or over-payment, will be credited back to me via a cheque within 2 weeks after the filing deadline
Jr. Member
User avatar
Jun 18, 2017
178 posts
57 upvotes
Vancouver
Apropos of nothing, I'd go to a goodfellas themed restaurant. "Hey that's a nice spaghetti dish there, be a real shame if somethin happened to it knowudimean? Tip your servers thank you"
That's my name...
Deal Addict
Feb 29, 2012
2324 posts
1173 upvotes
Richmond
GoodFellaz wrote:
Oct 10th, 2017 10:04 pm
Got clarification by Amanda from CRA this afternoon, and unfortunately, you were incorrect. I am good, the quarterly remittance does not have to be spot on, its just they want to collect as much money thru the year instead of getting it all at one shot, because they do periodic audits on it throughout the year. When I file my Employees T4's my math should add up, anything I've remitted that is extra or over-payment, will be credited back to me via a cheque within 2 weeks after the filing deadline
I think you are misinterpreting what they said. Can you imagine if every employer decided that they only have to match up on payroll deductions at the end of the year, and in between they were free to submit whatever they thought was appropriate to the CRA? Every business in Canada would treat it as a windfall interest-free loan.
Deal Addict
Feb 5, 2009
2322 posts
518 upvotes
Newmarket
Faith24 wrote:
Oct 12th, 2017 8:44 pm
I think you are misinterpreting what they said. Can you imagine if every employer decided that they only have to match up on payroll deductions at the end of the year, and in between they were free to submit whatever they thought was appropriate to the CRA? Every business in Canada would treat it as a windfall interest-free loan.
You are blowing it way out of proportion. If every business was purposefully shortchanging the remittances during the year they would be dinged with huge penalties. In this case OP's company made an error and remitted too much money, so his understanding of what cra told him is spot on for his situation..

OP, you are correct that if you have a refund for the overpayment when you file T4, however cra very often issues pier review for T4 with balances, owing or receivable, Bit of a hassle to provide forms and explanations, to avoid this, if you have owner on payroll you can increase the owners tax deducted on the t4 slip for the amount of overpayment, and have a NIL balance when filing the tax return. It will only work if you have large enough shareholder credit balance to absorb bit without creating issues there.

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