CRA Payroll Source-Deduction Audit — Montreal CPA Firm Near You: CPP, EI, QPP, QPIP, and Tax Remittance Defense

A CRA Payroll Source-Deduction Audit determines whether your business has correctly withheld, calculated, and remitted all required payroll deductions — including federal income tax, CPP, EI, QPP, QPIP, and employer contributions. Payroll audits are among the most aggressive CRA and Revenu Québec enforcement actions because the amounts withheld are considered trust funds, not company money.
Mackisen CPA Montreal protects employers and directors during these audits by reconciling all remittances, validating employee classifications, defending taxable-benefit calculations, and preparing complete CPA-certified audit files.

Payroll audits can create severe consequences — including director liability — if not handled correctly and quickly.

Legal Foundation

Income Tax Act s.153 — requires employers to withhold and remit source deductions.
CPP Act s.21 and EI Act s.82 — outline employer and employee obligations.
Québec Tax Administration Act ss.40–44 — imposes personal liability for unremitted QPP, QPIP, and provincial tax deductions.
Jurisprudence: Soper v. Canada (1997 FCA) — directors avoid personal liability only if they demonstrate reasonable diligence in supervising remittances.

Learning insight: CRA does not forgive mistakes with trust funds — only documented diligence prevents penalties.

Why CRA and Revenu Québec Conduct Payroll Audits

Payroll audits are triggered when CRA systems detect inconsistencies, gaps, or reporting errors. Typical triggers include:
• T4/T4A/RL-1 totals that don’t match PD7A or RLZ-1 remittances
• late, missing, or partial source-deduction payments
• contractors treated as employees or vice-versa
• taxable benefits not reported (e.g., vehicles, cellphones, housing)
• payroll expense inconsistencies compared to revenue
• employee complaints or EI claims that contradict your filings
• business insolvency or suspected trust-fund diversion

Learning insight: CRA algorithms don’t ask “why?” — they ask “where is the remittance?” Your CPA provides the answer.

CRA Payroll Audit Process

1. CRA issues an audit notice requesting payroll registers, remittance proofs, T4/RL-1 slips, and payroll summaries.

2. CRA selects a sample of employees and contractors for detailed review.

3. CRA verifies CPP/EI/QPP/QPIP calculations and employer contributions.

4. CRA tests taxable-benefit reporting and allowance compliance.

5. CRA determines whether any contractors should be reclassified as employees.

6. CRA issues proposed adjustments and penalties unless challenged effectively.

Learning insight: Payroll audits are mathematical on the surface — but legal in consequence. Representation protects both the math and the law.

Mackisen CPA’s Payroll Audit Defense Strategy

• reconcile all remittances to PD7A, TPZ-1015, RL-1, and T4 summaries
• verify CPP/EI/QPP/QPIP eligibility and ceiling calculations
• audit taxable benefits and allowances using CRA T4130 rules
• prepare legal-quality worker-classification analysis (Wiebe Door + Québec tests)
• assemble director due-diligence defense files
• file voluntary disclosures where late remittances were unintentional
• negotiate with CRA/ARQ to remove penalties and minimize interest

Learning insight: CRA penalties grow with time; due diligence reduces them instantly. Preparation is your protection.

Common Payroll Audit Findings

• missing remittances or incorrect deposit frequencies
• misclassified contractors requiring CPP/EI reassessment
• unreported taxable benefits (auto, housing, health plans)
• incorrect vacation-pay or overtime reporting
• lack of T4/T4A/RL-1 filing for subcontractors
• payroll records inconsistent with GST/QST or income-tax filings

Learning insight: Most findings are administrative, not fraudulent — and fully defensible with CPA-certified documentation.

Real-World Results

• A construction company avoided $185,000 in payroll reassessments after Mackisen CPA proved subcontractor independence with written contracts, insurance proof, and business-number validation.
• A retail chain had 80% of penalties removed after we demonstrated repeated CRA processing delays, not employer negligence.
• A tech startup avoided director liability when we built a complete diligence file showing timely oversight of payroll operations.

Learning insight: CRA reverses positions when given structured evidence — the kind your CPA prepares, not the kind you improvise.

SEO Optimization and Educational Value

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Learning insight: Payroll compliance is a trust exercise — with both CRA and Google. Consistency builds credibility.

Why Mackisen CPA Montreal

With over 35 years of payroll-tax and audit-defense experience, Mackisen CPA Montreal is a recognized leader in representing employers during CRA and ARQ source-deduction audits. Our bilingual CPAs understand both federal and Québec payroll frameworks and protect your business, your directors, and your financial integrity.

Learning insight: Payroll errors happen — but payroll penalties don’t have to. Diligence, documentation, and defense make the difference.

Call to Action

If CRA or Revenu Québec has requested payroll documents or flagged your remittances for review, act before penalties accumulate.
Contact Mackisen CPA Montreal today for full payroll-audit defense and remittance reconciliation.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA Payroll Source-Deduction Audit tests accuracy, diligence, and trust. Mackisen CPA Montreal ensures your payroll system proves all three — protecting your business and your leadership.