A growing non-profit needed compliant payroll and reporting. We set up its systems and trained the board.
A non-profit expanding its staff had informal payroll and weak financial reporting for its board. We set up compliant payroll with proper source-deduction remittances, established monthly board-ready statements, and documented internal controls. The organization gained clean compliance and transparent reporting for funders.
Charities and non-profits file their own returns, meet a disbursement quota and can recover sales tax through public service body rebates.
Employers withhold CPP, EI and income tax and remit on a schedule set by their average monthly withholding. Late remittance carries a penalty of 3% to 10%, rising to 20% for a repeat failure with gross negligence in the same year.
Why it bites: Payroll penalties compound quietly. An employer that drifts one cycle late each quarter can owe more in penalties than in the tax it was late paying.
The CRA requires business records to be kept for six years from the end of the tax year they relate to, in a form that allows the return to be verified.
Why it bites: Where records cannot support the return, the CRA is entitled to assess on its own estimate — and the burden of disproving that estimate falls on the taxpayer.
Source deductions are held in trust for the Crown from the moment they are withheld, which is why directors can be personally liable for unremitted amounts under section 227.1.
Why it bites: Unlike most corporate debts, this one can follow the directors personally after the company is gone.
Every engagement above was priced as a fixed fee agreed before the work started, and paid only once the client had reviewed the result. If any of this looks like your situation, the first step is a free 15-minute call — we will tell you plainly whether there is anything worth doing.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. This case study is based on a real client engagement handled by Tax Filings Canada; the client's name and identifying details have been changed. Outcomes depend on your own facts.
Sources. CRA — Payroll · CRA — Keeping records · Income Tax Act (Justice Laws Website)
