The dreaded phone call from CRA

Government audits often turn up unreported earnings, benefits
By Sheila Brawn
|Canadian Payroll Reporter|Last Updated: 07/02/2015

nobody wants to hear the words "The CRA will be conducting an audit." After all, who wants a Canada Revenue Agency (CRA) auditor going through all of their books and records, possibly finding errors and perhaps charging penalties and interest? Even if there are no problems, it can still be a lot of work to pull everything together.

To make sure employers are complying with payroll responsibilities, the agency regularly reviews’ payroll accounts and conducts trust account examinations and employer compliance audits. In 2013-14, the CRA carried out over 493,000 payroll account reviews and 865 employer compliance audits. While no figures on trust account examinations were provided for 2013-14, the CRA did 48,000 of them the previous year.

In a webinar, the CRA explained that for both an examination and an audit, it looks at an employer’s books and records to make sure it is properly deducting, remitting and reporting source deductions and to see if it has any unreported employee income. The agency also checks the organization’s GST/HST documents to make sure it is charging, recording, reporting and remitting tax as required.