As a Canadian employer, you may be wondering what to do with the withheld funds.
The short answer is to not use them for anything except paying the government. Using withheld funds as a “loan” or bridge amount is erroneous to say the least.
It’s far safer (and legal) to ensure the funds are remitted (paid) to the government as soon as possible. This is done through the CRA on a consistent (monthly or quarterly) basis.
Once you have established your withholding (payment) schedule with the CRA, you may consider automating it with the use of software. However, some business owners opt to do so manually.
Regardless, in either event you are fully responsible to ensure that the funds are accurately calculated and remitted on time.
As a remind, failure to meet your withholding schedule can result in steep penalties, including hefty fines and even jail time.