Pre-authorized debit

Pre-authorized debit (PAD) is an online self-service payment option. Through this option, you agree to authorize the CRA to withdraw a pre-determined payment amount directly from your bank account on specific date(s) to pay your taxes. You can set up a PAD agreement using CRA's secure My Account service.

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  1. Is the PAD service secure?
  2. When I sign up for the PAD service, does the CRA then have unlimited access to my bank account and information?
  3. How do I sign up for the PAD service?
  4. How can I be sure my PAD has been put in place?
  5. Why is there a 5 business day delay in creating or managing my PAD agreement?
  6. What payment types are available through the PAD service?
  7. Can I sign up for the PAD service over the phone?
  8. Can I cancel or modify my PAD after I have set it up?
  9. For the "Individual income tax (T1)" payment type, when should I use "payment on filing" versus "balance owing / arrears"?
  10. What happens if I make a mistake when setting up my PAD?
  11. Will I be penalized or have to pay interest if I file an income tax return and set up a PAD in time for the April 30th tax deadline, but my income tax return is not processed until later?
  12. Who can use the PAD service?
  13. I am a non-resident or have to remit Non-resident (part XIII) taxes, and I have a bank account in Canada. Can I sign up for the PAD service?
  14. What are the advantages of a PAD?
  15. Is the PAD service available for businesses?

1. Is the PAD service secure?

Yes. At the CRA, we continually monitor our systems and upgrade our technology to ensure they are secure and that the privacy of personal information is safeguarded at all times. The PAD service is only accessible through My Account. The terms of the authorization you agree to when signing up for the PAD service are strictly governed by the Canadian Payments Association. All financial institutions and the CRA must strictly adhere to their Rule H1, Pre-Authorized Debits.

2. When I sign up for the PAD service, does the CRA then have unlimited access to my bank account and information?

No. When you sign up for the PAD service, the CRA and your financial institution can only process debits against your account for the purposes of paying your taxes as per your instructions.

3. How do I sign up for the PAD service?

The steps are as follows:

  1. Log in to My Account.
  2. Select the "Pay by pre-authorized debit" link on the left side bar of My Account. Note: To set up a PAD agreement, you first have to register for My Account. For information on all the features of My Account and for information on how to register, see the My Account for Individuals webpage.
  3. Once in the service, select the "Create new agreement" button on the main page; then select a payment type.
  4. Select a payment allocation from the drop down lists provided (exception: for Child and family benefits there is no payment allocation required).
  5. Press Continue. This will bring you to the agreement details page.

4. How can I be sure my PAD has been put in place?

Immediately after successfully completing the agreement you will be taken to a confirmation screen advising you of the details of your agreement. You can print or save this confirmation for your records. A copy will be available to you in your agreement history. In the unlikely event that a PAD transaction is not correctly reflected on your account, a CRA representative can trace your payment and correct any problem that may have occurred.

5. Why is there a 5 business day delay in creating or managing my PAD agreement?

Five business days are required to process the creation of a PAD agreement. For more information, see the PAD service help page, within My Account.

6. What payment types are available through the PAD service?

Through a PAD agreement you can pay tax owing, make tax instalment payments, pay child and family benefits owing, and more. For more information on the types of payments you can make through a PAD agreement, see the PAD service help page, within My Account.

7. Can I sign up for the PAD service over the phone?

No. Your PAD must be set up through My Account on the CRA website.

8. Can I cancel or modify my PAD after I have set it up?

Yes. This can be done within the PAD service through the "Manage active PAD agreements" option.

9. For the "Individual income tax (T1)" payment type, when should I use "payment on filing" versus "balance owing / arrears"?

If you are making a one-time payment at the time of filing your yearly income tax return, you should choose the "Individual income tax (T1) - payment on filing" payment type on the PAD set-up screens. If you are making a one-time payment after your return has been assessed, you should choose the "Individual income tax (T1) - balance owing / arrears" option on the PAD set-up screen. For additional information regarding payment types, see the PAD service help page, within My Account.

10. What happens if I make a mistake when setting up my PAD?

If you make a mistake when setting up your PAD, you can:

  • Log in to My Account to modify, cancel, or recreate your agreement. See the "Manage active PAD agreements" option within the PAD service.
  • Contact the CRA to have the mistake corrected if it has already been processed, as you would for any misallocated transaction.

11. Will I be penalized or have to pay interest if I file an income tax return and set up a PAD in time for the April 30th tax deadline, but my income tax return is not processed until later?

No. If you file a return and set up a PAD in time for the April 30th tax deadline, the payment will be withdrawn from your account at your financial institution on the appropriate date, even if your income tax return is not processed until later.

12. Who can use the PAD service?

Any taxpayer can sign up. The service is particularly useful if you pay your taxes in instalments. It is also useful if you want to file your income tax return early, but make your payment closer to your payment deadline.

13. I am a non-resident or have to remit Non-resident (part XIII) taxes, and I have a bank account in Canada. Can I sign up for the PAD service?

Yes, as long as you have the following:

  • a social insurance number;
  • the proper security credentials to access My Account;
  • a Canadian funds account at any bank, trust company, credit union, or other financial institution in Canada.

14. What are the advantages of a PAD?

Here are some advantages of a PAD:

  • Set it up and forget it: your post-dated electronic withdrawals are made automatically on the due date(s) you select. You don’t have to remember to mail your payment.
  • Keep your money by setting up your PAD now, but arranging for the withdrawal to be made closer to your payment deadline.
  • Based on the payment type you select, you choose the frequency of withdrawal (for example, one-time, weekly, bi-weekly, monthly, quarterly, or annually).
  • Save time: no envelopes to stuff and no trips to the bank or waiting in line to pay.
  • PADs are flexible and managed by you: to view historical records, or modify, cancel, or skip a payment, log in to My Account.

15. Is the PAD service available for businesses?

The CRA is working to offer the PAD service to businesses in the near future.

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