How to pay your taxes online

Few people get excited about forking over money to the Canadian Revenue Agency (CRA). Still, it’s helpful to have a variety of options when paying taxes.

As in the pre-Internet days, you can send a cheque by mail to CRA, or hand deliver it to a local financial institution. Either way, a personalized remittance voucher must accompany the cheque. You can order that by phone or online from CRA.

But if you’re willing to order the voucher online — which requires you to navigate the My Account or Quick Access gateway on CRA’s website — then you may find it more convenient to simply use one of the online payment methods.

Standing online payment methods

None of the following methods require a remittance voucher.

Most financial institutions include CRA as a payee in their online banking/billing system. Here’s how to use that.

1. Log into your online banking account and go to the bill payment section.

2. Then, click on “Add a payee.” Search the list of payees for “CRA (revenue)-(2013)-tax owing,” or something similar. This ensures the payment makes it there, and is applied to the correct purpose (instead of used against a past due amount or current installments).

3. The bank will ask for a biller identification number. That’s your social insurance number.

4. You can now add CRA as a payee.

Alternatively, you can pay CRA directly by registering and logging into the My Payment service on CRA’s website. It’s like using a debit card online through Interac, so the money will actually have to be in your bank account for it to work. Presently, only four banks participate in this program: BMO, RBC, TD and Scotiabank.

Scotiabank is the lone institution designated by CRA to receive payments on its behalf from non-residents, whether by online payment or wire transfer. Canadian residents can’t use wire transfers.

PAD your payment

The latest addition to payment options is pre-authorized debit, or PAD, available through the My Account service. Once logged in, look for the bright red “new” flag in the left margin to create a new PAD agreement. It will take five business days to process, so don’t leave it to the last minute.

Through PAD, you can make a single payment, or a series, for items including income tax, and child and family benefit repayments. In fact, you can file your tax return early and authorize a PAD in time for April 30 — even if your tax return is processed later, no interest will be charged and the withdrawal will be processed on the appropriate date.

CRA only takes payments for the purposes and amounts as per your instructions. And all information is private.

If debit, why not credit?

CRA doesn’t accept credit card payments directly. But it does allow payments through third-party service providers.

While there are many third-party providers that send payment and remittance details online to CRA (e.g., source deductions taken by payroll managers), the only registered company that accepts credit card payments is Plastiq. Of course, you’ll pay a nominal fee (about 2%) to any third-party provider for this service.

Also, it can take four to five business days for a credit card payment to make it to CRA. Familiarize yourself with the service terms so that the payment is in by the due date, or else you may face penalties.