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The Charter of the French language and its regulations govern the consultation of English-language content.

Liability for Payment

When source deductions and employer contributions are not properly made, certain people may be liable for payment of the amounts not remitted.

Solidary liability

Certain persons may be held solidarily liable with an employer for the payment of the employer's source deductions and employer contributions. Such persons include:

  • directors of a corporation;
  • payroll services businesses.

Liability of a corporation's directors

Source deductions of income tax

If a corporation fails to make source deductions of income tax, the corporation and its directors are not liable for the amounts, unless the source deductions that should have been made relate to remuneration paid to a person not resident in Canada.

However, the corporation and its directors in office at the time of the omission are solidarily liable for the payment of any penalties and interest related to the source deductions that the corporation should have made and remitted.

If a corporation fails to remit any source deductions of income tax that it made, the corporation and its directors in office at the time of the omission are solidarily liable for the payment of the amounts, including any related penalties and interest.

Québec Pension Plan contributions and Québec parental insurance plan premiums

If a corporation fails to withhold or remit Québec Pension Plan (QPP) contributions or Québec parental insurance plan (QPIP) premiums (employee or employer), the corporation and its directors in office at the time of the omission are solidarily liable for the payment of the amounts not withheld or not remitted, including any related penalties and interest.

Other employer contributions

If a corporation fails to remit its contribution to the health services fund, its contribution related to labour standards or, if applicable, its contribution to the Workforce Skills and Development and Recognition Fund (WSDRF), the corporation and its directors in office at the time of the omission are solidarily liable for the payment of the amounts not remitted, including any related penalties and interest.

Exceptions

The solidary liability of directors does not apply where:

  • a director acted with reasonable care, diligence and skill under the circumstances;
  • a director could not, under the same circumstances, have been aware of the omission; or
  • at least two years have elapsed since a person permanently ceased to be a director of the corporation.
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Liability of payroll services businesses

Any person who authorizes the payment of amounts subject to source deductions on behalf of another person or causes such payments to be made by or on behalf of that other person is solidarily liable for the remittance of the source deductions.

If you deal with a payroll services business, the business is liable, along with you, for the payment of the source deductions (income tax, employee QPP contributions and QPIP premiums).

Liability of the members of a partnership

If a partnership fails to meet its obligations as an employer or a payer, the members of the partnership may be held personally liable for the payment of the amounts not withheld or not remitted, including any related penalties and interest.

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