How to Use Online Banking to File and Pay Your Business Sales Tax, Payroll DAS and Corporate Tax

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As business owners and employees are increasingly working remotely, often from their home offices, it helps to set up an infrastructure where business functions can be handled online.  This includes tax payments, which tax agencies have tried to make as easy as possible by offering several options. The benefit of making tax payments online is that they allow businesses reduce the hassle of manually transcribing information onto forms that then have to be mailed in along with a cheque, before a certain due date.  Often payments that are made by mail are received late that can then result in late filing penalties and interest even though, on your side, they were sent on time. And, unfortunately, telling them (or anyone) that the “cheque is in the mail” is a statement with limited credibility.

The major Canadian banks including RBC,CIBC, TD, BMO and Scotiabank as well as some regional banks such Caisse Desjardins Access D’Affaires conveniently have business tax filings service which replicate the forms that have to be submitted to the government for:

• Sales tax (GST/HST and QST) ei,

• Payroll tax (deductions at source payable to Revenue Canada and Revenue Quebec) and

• Corporate taxes payable to Revenue Canada (CRA) and Revenue Quebec (RQ). 

• Business tax instalment payments (including GST-QST instalments)

This means that instead of entering the data on the forms that are available via my business account at CRA and RQ and then going to your bank to make payment, either online or via mail, it can all be done at one time through one form that serves as both tax filing and payment.

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How To Sign Up for Business Tax Payments:

All businesses, including sole proprietorships, partnership and corporations that have a separate business bank account with a CRA approved bank, can make payments through the government tax payment and filing service.  Signing up for this service can usually be done online – when you log in to your business portal, the service can usually be found in the “bill payments (pay bills”) section.  Once you have agreed to the terms and completed the registration, you are ready to pay businesses taxes online. Each type of payment is represented by a different form which has to be “added” before payment can be made. 

Payroll Deductions at Source Payments to CRA and RQ:

Before setting up the DAS payments online, make sure that you have registered for payroll and have the breakdown of deductions at source for salaries paid. This can either be from your payroll or accounting software, or spreadsheet/forms (if you have chosen to it manually) where the totals for each pay period are indicated.

Federal DAS Payments:

From the “add payment types” menu select the payroll deduction schedule that applies to your business, which is most commonly “Federal Payroll Deductions - Monthly/Quarterly -- EMPTX -- (PD7A)” for most small businesses.  Once you have chosen this payment type you will have to enter your federal payroll number which can be found on any payroll notices received from CRA or from CRA My Business Account (where you can also find your payment frequency).   The number, which is the same as your other federal business numbers, except for the suffix which usually ends in RP000? Once you have added this payment type, you would then go to make payment and click on it.  You are required to enter:

• Date payment made to employees: This is the last day of the month for which the payroll period applies.  If you are a monthly remitter, the date would be the end of the month for which you are paying the deductions at source.  For quarterly remitters, it would be the end of the quarter.

• Gross period Payroll is the gross amount (before deductions) that were paid to employees

• Number of employees that you paid for the period being reported on.

• Amount paid which is the total of payroll taxes including EI, income tax and CPP

Quebec DAS Payment:

Similar to the Federal DAS payment described above, you would add the payment type relating to Quebec corresponds to your remittance frequency (RQ sends a letter annually letting you know if your payment frequency has changed).  The form number TPZ 1015 for all payroll types and R14.1 if you are a monthly or yearly remitter. The Quebec payroll number is the Quebec identification number usually ending in RS000? and can be found and RQ my account for business or on any documents you received from RQ relating to payroll.

After selecting the form for RQ Deductions at source, you will need to enter the following separately:

• Quebec Income Tax

• QPP (RRQ) – Quebec Pension Plan

• QHSF (FSS) – Health Services Fund

• QPIP (RQAP) – Quebec Parental Insurance Plan

• CNESST – this is entered if your business is registered for CNESST

Comments:

• The payment due date when paying through online banking is always one business day before the actual due date since it takes the bank a day to process the payment.  Late payments result in penalties and therefore it is important to keep this in mind and pay at least one business day before the payment due date .

• When entering the payroll number sometimes the “RP” or “RS” is not required. Just the number and the suffix.

• Federal payment types that are referred to as arrears, payment due and payment on filing (i.e. a form other than the PD7A) mean that you have already filed the actual return elsewhere (eg. online through My CRA account) and are only making a payment.  This is important to note to avoid duplication of the actual return which can result in a bureacratic conundrum that is difficult, and time consuming, to fix.

GST/HST and QST Payments and Instalments

In order to file and pay the federal GST/HST payment, the first step is to add the relevant payment type.  The GST/HST number can be found on any of the GST forms received or through CRA My Business Account. Similarly the QST number can be found through correspondence or RQ Clic Sequr (My Account for  Business).  The GST/HST and QST numbers only needs to be added one time, when setting up the payment type. 

Below are a list of forms and description:

Federal - GST/HST  Return and Payment -- GST34 -- (GST34)

• When you want to complete the entire GST/HST return online, this is the form that would be selected

• You are required to enter the period to which the return applies, whether annual, quarterly or monthly.

• The due date is the date the return is due. Note that the filing should always be done at least one day prior to the due date as it takes one day to process. The due date reflected on the return can also be an earlier date (this will not make a difference to the due date that CRA or RQ have on file).

• Line 101 is total sales for the period being reported on

• Line 105 is the GST/HST tax collected on the sales from line 101

• Line 108 is the GST/HST tax paid on purchases/expenses also referred to as input tax credits

• Line 110 allows you to enter instalments paid, if any during the year

Federal - GST/HST Balance Due -- GST-B -- (RC177)

This is the form to use when you have received a notice of assessment for GST/HST and need to pay the amount due.  This can be for interest and penalties or relate to a form that was filed but payment has not yet been made.

Federal - GST/HST Payment only -- GST-P -- (GST-P)

This form can be used to make instalments for those who have annual filing periods, but their GST/HST exceeds $3k and are therefore required to make quarterly instalments.

For those businesses that are registered in Quebec, both GST and QST are administered by Revenue Quebec.  Only one “Combined” form is required to pay both taxes.

QUEBEC COMBINED GST/HST + QST REMITTANCE -- G-QST -- (FPZ-500.IF)

This is similar to the “Federal - GST/HST  Return and Payment -- GST34” explained above.  The information required is the same as the federal form GST34. Additionally you will require the QST collected on sales in Quebec (line 205) and QST paid on expenses or Input Tax Refunds (line 208) which are reflected on line numbers 205 and 208 respectively.

Quebec Combined GST + QST Instalment -- TXIN -- (FPZ-558)

This form, similar to the Federal payment only form above, can be used to make instalments for those who have annual filing periods but their GST/HST and QST each (individually) exceed $3,000 and are therefore required to make quarterly instalments.  The quarterly instalment amounts are 1/4 of the amount of GST and QST paid for the year prior to the one that you are filing.

The tutorial below explains to how to pay GST/QST instalments using online banking

Corporate Tax Payments and Instalments:

When adding the corporate tax payment types (reflected below), you will need the federal business number, which ends In RC while the Quebec business number ends in IC.  The actual business numbers are the same as the payroll and GST/HST-QST numbers except with a different suffix.

Federal - Corporation Tax Payments – TXINS:

This form allows you to enter the year end to which the payments relate.  A payment can be made upon filing of the corporate tax return (payment on filing), upon receipt of a notice of assessment (balance due) and interim payments (instalment payments). 

See video below for step by step instructions on how to pay your corporate taxes payable or instalments to CRA using online business banking.

Quebec Corporate Remittance Income Tax -- DECOR -- (COZ-1027.R):

Similar to the federal form, this form only allows you to enter the year to which the payments relate and an amount.

Quebec Specific Payments using the Revenue Quebec (RQ) download code

RQ has it made it even easier to make payments online by issuing a payment code on each notice of assessment as well as on instalment notices.  To make the payment using the payment code, you would go to the tax filing service specific to the bank you use, and locate the payment type “Revenu Québec-Payment code – PCRQ” . Add this payment type once. When you are ready to pay, simply enter the code indicated on the notice of assessment or the GST-QST filing that you have obtained when you filed a return online via Clic Sequr (RQ my account for business) along with the amount payable.  The payment code, as long as it is entered correctly, will be applied directly to the relevant amount payable.

Making payments online is straightforward once the payment types have been set up, supporting reports are generated and you have done it enough times.  It removes uncertainty about payments being received and has the added benefit of receiving a payment confirmation which can be very useful when trying to prove to the tax agencies. 

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