Canada Pension Plan

Marginal note:Amount to be deducted and remitted by employer

• 21 (1) Every employer paying remuneration to an employee employed by the employer at any time in pensionable employment shall deduct from that remuneration as or on account of the employee’s contribution for the year in which the remuneration for the pensionable employment is paid to the employee such amount as is determined in accordance with prescribed rules and shall remit that amount, together with such amount as is prescribed with respect to the contribution required to be made by the employer under this Act, to the Receiver General at such time as is prescribed and, where at that prescribed time the employer is a prescribed person, the remittance shall be made to the account of the Receiver General at a financial institution (within the meaning that would be assigned by the definition financial institution in subsection 190(1) of the Income Tax Act if that definition were read without reference to paragraphs (d) and (e) thereof).

• Marginal note:Exception — remittance to financial institution

  (1.1) For the purpose of subsection (1), a prescribed person referred to in that subsection is deemed to have remitted an amount to the account of the Receiver General at a financial institution referred to in that subsection if the prescribed person has remitted the amount to the Receiver General at least one day before the day on which the amount is due.

• Marginal note:Liability for failure to deduct and remit

  (2) Subject to subsection (3), every employer who fails to deduct and remit an amount from the remuneration of an employee as and when required under subsection (1) is liable to pay to Her Majesty the whole amount that should have been deducted and remitted from the time it should have been deducted.

• Marginal note:Subsequent decision — limit on liability

  (3) An employer is not liable for any amount that the employer fails to deduct as required by this Act from the remuneration of an employee, or for any interest or penalties for that failure, if

  • (a) the employer is informed in writing in a ruling under section 26.1 that the employer is not required to make the deduction;

  • (b) the ruling is not based on information provided by the employer to the Minister that was incorrect in a material particular; and

  • (c) it is subsequently decided under subsection 27.2(3) or section 28 that the deduction should have been made.

• Marginal note:Subsequent decision — other consequences

  (3.1) Once the decision under subsection 27.2(3) or section 28 is communicated to the employer, the employer is liable without interest or penalties under this Act to pay the contribution required to be paid by the employer with respect to the employee. On payment by the employer of any amount as or on account of that contribution, the employee is deemed to have notified the Minister as required by paragraph 15(1)(b) of the employer’s failure to deduct the amount of that contribution from the remuneration of the employee.

• Marginal note:Deduction from subsequent payment of remuneration

  (4) Any employer who fails to deduct an amount that is required by subsection (1) to be deducted from a payment of remuneration to an employee may deduct an amount equal to the amount from any subsequent payment of remuneration made to the employee within 12 months after the making of the payment from which the amount was required to be deducted, but no employer may deduct from a payment of remuneration made to an employee, in addition to the amount required by subsection (1) to be deducted therefrom, any amount with respect to more than one such amount that the employer previously failed to deduct.

• Marginal note:Amount deducted deemed received by employee

  (5) Where an amount has been deducted under subsection (1), it shall be deemed for all purposes to have been received at that time by the employee to whom the remuneration was payable.

• Marginal note:Interest on amounts not remitted

  (6) Where an employer has failed to remit to the Receiver General an amount that the employer was required to remit at the time when he was required to do so, the employer shall pay to the Receiver General interest on that amount at the prescribed rate computed from the day on which the employer was so required to remit the amount to the day of remittance of the amount to the Receiver General.

• Marginal note:Penalty for failure to remit

  (7) Every employer who in a calendar year fails to remit to the Receiver General an amount that the employer is required to remit at the time when he is required to do so is liable to a penalty of

  • (a) subject to paragraph (b), if

    • (i) the Receiver General receives that amount on or before the day it was due, but that amount is not paid in the manner required, three per cent of that amount,

    • (ii) the Receiver General receives that amount

      • (A) no more than three days after it was due, three per cent of that amount,

      • (B) more than three days and no more than five days after it was due, five per cent of that amount, or

      • (C) more than five days and no more than seven days after it was due, seven per cent of that amount, or

    • (iii) that amount is not paid or remitted on or before the seventh day after it was due, ten per cent of that amount; or

  • (b) where at the time of the failure a penalty under this subsection was payable by the employer in respect of an amount that the employer was required to remit during the year and the failure was made knowingly or under circumstances amounting to gross negligence, twenty per cent of the amount.