Pre-authorized debit

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

Eligibility and general information

Who can use the PAD service?

Any taxpayer or owner of a business can use the PAD service. The service is particularly useful if you pay your tax by instalments / interim payments. It is also useful if you want to file your return early, but make your payment closer to your payment deadline.

Non-residents or those remitting non-resident (Part XIII) tax with a Canadian bank account may also use the PAD service if they have the following:

  • social insurance number;
  • proper security credentials to access My Account or My Business Account; and
  • Canadian funds account at any bank, trust company, credit union, or other financial institution in Canada.
What payment types are available through the PAD service?

Through a PAD agreement you can pay tax owing, make tax instalment / interim 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 at My Account or My Business Account.

Individual income tax:

  • Balance owing / arrears
  • Instalment fixed amount
  • Instalment no-calculation option
  • Payment on filing
  • Tax-free savings account amount owing

Child and family benefits

Non-resident withholding tax – Part XIII

  • Regular remittance
  • Assessed arrears

Nova Scotia workers' compensation board

  • Current
  • Amount owing

Corporation income tax and GST/HST

  • Interim
  • Balance due
  • Amount owing

Payroll source deductions

  • Regular remittance
  • Quarterly remittance
  • Accelerated threshold 1
  • Accelerated threshold 2
  • Balance owing
  • Pensionable and insurable earnings review (PIER)
  • Payment on filing
  • Arrears / penalty / interest remittance

Excise duty / Excise tax / Air traveller's security charge / Excise tax on insurance premiums / Softwood lumber products export charge

  • Balance due
  • Amount owing

Information returns

  • Amount owing
Is the PAD service secure?

Yes. At the CRA, we continually monitor our systems and upgrade our technology to make sure they are secure and that the privacy of personal information is safeguarded at all times. The PAD service is only accessible through My Account and My Business Account. The terms of the authorization you agree to when signing up for the PAD service are strictly governed by the Canadian Payments Association.

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 tax debt according to the details in your PAD agreement.

What are the advantages of using the PAD service?

Here are some advantages of using the PAD service:

  • Set it 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, modify, cancel, or skip a payment, log in to My Account or My Business Account.

Creating and managing PAD agreements

How do I create a PAD agreement for individual accounts?

Your PAD agreement must be created through My Account on the CRA website. You cannot create a PAD agreement over the phone.

To set up a PAD agreement, you first have to register for My Account. For information on all the features of these services and for information on how to register, see the My Account webpage.

The steps for My Account 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. Once in the service, select the "Create new agreement" button on the main page.
  3. Select a payment type followed by a payment allocation from the drop-down lists provided (Exception: For child and family benefits there is no payment allocation required.). Select "Continue." This will bring you to the agreement details page.
  4. Enter your agreement details in the fields provided. Select "Continue."
  5. Review and confirm all your PAD agreement details; then read and accept the terms and conditions; then read the important information about pre-authorized debit.

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. As well, 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.

How do I create a PAD agreement for business accounts?

Your PAD agreement must be created through My Business Account on the CRA website. You cannot create a PAD agreement over the phone.

To set up a PAD agreement, you first have to register for My Business Account. For information on all the features of these services and for information on how to register, see the My Business Account webpage.

The steps for My Business Account are as follows:

  1. Log in to My Business Account.
  2. Select the "Pre-authorized debit" link on the left side bar. Once in the service, select the "Create new agreement" button on the main page.
  3. Select a program account followed by a payment allocation from the drop-down lists provided. Select "Continue." This will bring you to the agreement details page.
  4. Enter your agreement details in the fields provided. Select "Continue".
  5. Review and confirm all your PAD agreement details; then read and accept the terms and conditions; read the important information about pre-authorized debit.

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. As well, 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.

Why is there a five-business-day delay in creating or managing my PAD agreement?

Five business days are needed to process a payment for a PAD agreement. For more information on this, go to the PAD service help page at My Account or My Business Account.

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 or My Business 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.
Can I cancel or modify my PAD agreement after I have set it up?

Yes. This can be done using the PAD service and the "Manage active pre-authorized debit agreements" option.

PAD and tax filing

For an income tax and benefit return, when should I use "payment on filing" versus "balance owing / arrears"?

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

Will I be penalized or have to pay interest if I file, for my personal or business taxes, a tax return and set up a PAD agreement in time for the filing deadline, but my return is not processed until later?

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

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