My client got a CRA requirement to pay letter, and their bank and a customer got one too. What happens now, and how do we get it lifted?
A CRA requirement to pay is a garnishment under ITA s.224 that orders a third party, like your client's bank, employer or customer, to pay the CRA money it owes your client. A third party that ignores it becomes liable, and as of October 2026 the CRA usually keeps it until the debt is paid or hardship is shown.
Which garnishment did the CRA send: RTP, ERTP or DTP?
A requirement to pay (RTP) is one of three garnishment documents the CRA sends to a third party, such as an employer or a financial institution, when it can't collect a debt or arrange payment with your client canada.ca. The document name tells you which debts it covers and where it ranks.
| Document | Debts it collects | Rank against other creditors | Court order needed? |
|---|---|---|---|
| Requirement to pay (RTP) | Income tax, corporate tax, payroll deductions, GST/HST, customs duties, COVID benefits and subsidies | Above most creditors, below secured creditors | No, except for COVID benefits paid to individuals |
| Enhanced requirement to pay (ERTP) | Payroll deductions, GST/HST, Air Travellers Security Charge | Above secured creditors | No |
| Demand on a third party (DTP) | Government program debts such as EI, CPP and Canada Student Loans | Above most creditors, below secured creditors | May need a provincial judgment or a Federal Court certificate |
The power sits in ITA s.224(1): if the Minister knows or suspects that a person owes your client money now, or will within one year, the Minister can require that person in writing to pay it to the Receiver General instead laws-lois.justice.gc.ca. The ERTP rests on s.224(1.2), which makes the garnished amount Crown property ahead of any security interest for amounts assessed under s.227(10.1), the unremitted source deduction assessment
laws-lois.justice.gc.ca. For GST/HST, ETA s.317 gives the CRA the same garnishment power and the same priority over secured creditors
laws-lois.justice.gc.ca.
Almost any money owed to your client can be caught: wages, salary, commissions and bonuses, bank balances, expense reimbursements, rent, accounts receivable, interest, dividends, annuities, insurance proceeds and loans from a corporation that doesn't deal at arm's length with your client canada.ca. The CRA sends your client a copy of every garnishment it issues on the debt
canada.ca.
What must the bank, employer or customer do, and what does ignoring it cost?
The first page of the RTP sets the terms, the effective period and the maximum amount to send. The recipient withholds that amount from each payment it owes your client unless the document sets a fixed amount per payment, a fixed amount for a period such as a month, or a percentage of each payment, and keeps going until the period ends or the total reaches the maximum canada.ca.
| Situation for the recipient | What the CRA says to do |
|---|---|
| Owes your client nothing right now | Keep a copy, then call the number on the RTP or return the response form saying why no payment is coming |
| Your client says they have an arrangement with the CRA | Keep complying unless the CRA withdraws the RTP in writing |
| Two garnishments compete for the same money | Comply with both and call right away if funds run short; child support garnishments take priority |
| Your client files a proposal or goes bankrupt | Keep honouring the RTP until written confirmation of the filing, and call the CRA before releasing money |
| Holds assets such as shares, a car or a house | Don't sell them unless your client or someone authorized says to; the RTP attaches to sale proceeds |
| Duration | Usually 90 days, one year or until the debt is paid; the first page states it |
| Records | Keep the RTP for its whole effective period and at least one year after receiving it |
Payment goes to the Receiver General for Canada with the account number from the remittance form, and if the contact on the document can't be reached, the CRA line for RTPs and ERTPs is 1-800-675-6184 canada.ca. The CRA's receipt discharges the recipient's debt to your client to the extent of the payment under s.224(2), and for wages, rent, interest, dividends and other recurring payments the RTP keeps applying to each payment until the debt is satisfied, under s.224(3)
laws-lois.justice.gc.ca.
Ignoring it is expensive. Under s.224(4), a person who fails to comply owes the Crown the amount it was required to pay the Receiver General laws-lois.justice.gc.ca. The CRA lists the ways recipients fall into that: not paying the CRA while owing your client money, continuing to pay your client, paying a relative or another creditor instead, or lending or advancing money to your client within 90 days of receiving an RTP that includes that term
canada.ca. Section 224(1.1) is the source of that 90 day loan rule, and s.224(4.1) caps the lender's liability at the lesser of the amount lent and the amount it was required to pay
laws-lois.justice.gc.ca.
Say your client's customer owes your client's company $18,000 on an invoice and receives an RTP with a $25,000 maximum. If the customer pays the company anyway, it can be assessed for $18,000, the amount it was required to send, on top of the $18,000 it already paid the company.
How much of an employee's wages does an RTP take?
An employer garnishes net pay, meaning employment income after source deductions. It still withholds income tax, CPP and EI on the full wages, reports the full salary on the T4 with no special box for the garnished amount, and the employee can't sue the employer for what went to the CRA canada.ca.
Suppose a biweekly employee earns $3,000 gross, source deductions are $720, and the RTP sets 25% of each payment with a $5,000 maximum. These inputs are illustrative; the real percentage or fixed amount is on the first page of the notice.
| Step | Amount |
|---|---|
| Gross pay each period | $3,000 |
| Less income tax, CPP and EI withheld | $720 |
| Net pay | $2,280 |
| Garnished at 25% of net pay | $570 |
| Paid to the employee | $1,710 |
| Sent after 8 pay periods (8 x $570) | $4,560 |
| 9th pay period: only the balance to the maximum | $440 |
| Total sent, then the RTP is spent | $5,000 |
The T4 still shows $3,000 a period as employment income, pensionable earnings and insurable earnings canada.ca. If the employee leaves, the employer sends the amount the first page sets from the final pay
canada.ca.
When can the CRA issue one, and does an objection stop it?
Before legal action, the CRA generally attempts at least one verbal legal warning by phone and sends one written warning, and that warning stays valid for 180 days. For payroll and GST/HST debts, the notice of assessment counts as the written warning, so action can follow right after it, and in a jeopardy case the CRA can ask a court for an order allowing immediate action canada.ca.
For income tax, s.225.1(1)(c) bars an RTP under s.224(1) until 90 days after the notice of assessment is sent. A notice of objection keeps the bar in place until 90 days after the Minister confirms or varies the assessment, and a Tax Court appeal keeps it until the decision is mailed or the appeal is discontinued laws-lois.justice.gc.ca. Deadlines are on the notice of objection page and the Tax Court appeal page.
The bar doesn't protect everything. Section 225.1(6) switches it off for amounts that had to be deducted, withheld and remitted, s.116 amounts and Part VIII tax, plus the penalties and interest on them laws-lois.justice.gc.ca. So an objection to a payroll assessment doesn't stop an RTP or ERTP, and the same unremitted amounts can reach directors personally, as the director liability page explains. A large corporation (taxable capital over $10 million) can have half of an assessed amount collected during an objection
laws-lois.justice.gc.ca.
How does your client get a requirement to pay lifted?
The CRA's collections policy says that once it issues an RTP, it usually won't stop or withdraw it until the account is paid in full, or until it can be shown that the action is causing financial hardship canada.ca. Paying in full is the clean exit. Hardship is the other one, and it needs evidence.
To negotiate, call the collections officer at the number on your client's letter. The officer bases any plan on ability to pay, after your client has tried reasonable ways to raise the money, and can ask for documents proving income, expenses, assets and liabilities. If you disagree with the officer, ask for the supervisor. The CRA can also accept liquid security instead of payment canada.ca. Arrangement mechanics are on the payment arrangement page.
An arrangement doesn't release the RTP by itself: the bank or employer keeps paying the CRA until the CRA withdraws the garnishment in writing canada.ca. Ask the officer to confirm the withdrawal in writing to each recipient. Federal refunds, benefits and credits can still be set off against the debt even with an arrangement in place
canada.ca.
Interest keeps running while the RTP is in place, compounded daily on tax and penalties canada.ca, at 7% for October 1 to December 31, 2026
canada.ca. And a garnishment issued when your client isn't paying voluntarily restarts the collection limitation period, 10 years for income tax and 6 years for payroll debt
canada.ca. Before relying on an old debt expiring, read the collection limitation period page.
Sources
Can the CRA take everything in my client's bank account?
Up to the maximum on the RTP's first page. Money held at a financial institution is garnishable, and the bank sends what it holds for your client, then keeps sending new amounts during the effective period until the maximum is reached canada.ca. The CRA's pages don't publish a protected minimum balance, so hardship has to be raised with the collections officer
canada.ca.
Does the employer still report the garnished wages on the T4?
Yes. The full salary goes on the T4 as employment income, and the garnished amounts stay part of pensionable and insurable earnings, with no special box or code canada.ca.
How do I check that a requirement to pay letter is real?
Check your client's balance in their CRA account, then call the collections contact printed on the document. If that contact can't be reached, the CRA's general line for RTPs and ERTPs is 1-800-675-6184 canada.ca. Your client should also have received their own copy of any garnishment
canada.ca.
Does a requirement to pay restart the 10 year collection clock?
Yes. The CRA lists issuing a garnishment or set off when your client isn't paying voluntarily as an action that restarts the limitation period canada.ca. The collection limitation period page has the full list of restart and pause events.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.