What Is a CRA Requirement to Pay? How It Works in Ontario

If you owe the CRA money and haven't arranged to pay it, one of the tools the CRA can use is what this article covers as a CRA requirement to pay explained in plain terms: a legal notice sent directly to a third party — commonly your bank, your employer, or a customer who owes you money — ordering them to redirect funds they would otherwise pay to you, straight to the CRA instead, up to the amount of your tax debt.

It's one of the CRA's more forceful collection tools, precisely because it bypasses you entirely: the third party is legally required to comply, whether or not you agree with the underlying debt. Understanding how it works — and what options remain once one has been issued — matters if you're dealing with a tax debt that hasn't been resolved.

What a Requirement to Pay Actually Does

A Requirement to Pay (sometimes shortened to "RTP") is a formal demand the CRA sends to a third party who holds money belonging to you, or who owes you money, directing them to pay some or all of it to the CRA instead of to you. Common recipients include:

• Banks and financial institutions — holding money in your account
• Employers — who pay you wages or salary
• Clients or customers — who owe you money for goods or services, if you're self-employed or run a business
• Tenants — who pay you rent, in some circumstances

Why the CRA Uses It

The CRA generally turns to collection tools like a Requirement to Pay after other efforts to resolve a tax debt — reminders, statements, direct contact — haven't led to payment or a workable arrangement. It's a way for the CRA to collect directly from money that would otherwise flow to you, without needing to go through the ordinary court-judgment enforcement process a private creditor would typically need.

What the Third Party Must Do

• [ ] Review the notice carefully to confirm what it requires and for what amount.
• [ ] Comply with the requirement — a bank, employer, or customer who receives a valid Requirement to Pay is legally obligated to redirect the specified funds to the CRA.
• [ ] Keep in mind that ignoring or failing to comply with a valid Requirement to Pay can expose the third party itself to liability for the amount they should have paid over.
• [ ] Continue paying any amount not captured by the requirement to the account holder or employee as usual.

A Requirement to Pay is generally treated differently than an ordinary garnishment from a private creditor — don't assume the usual limits and exemptions that apply to other kinds of wage garnishments automatically apply here. Confirm the specific scope of any notice with a lawyer or accountant before acting on assumptions.

What You Can Do If You've Received Notice of a Requirement to Pay

1. Confirm the underlying tax debt is accurate. If you disagree with the assessment that created the debt, and the objection or appeal deadlines haven't passed, that dispute process is separate from — and doesn't automatically pause — CRA's collection activity, so act on both tracks if needed.
2. Contact the CRA about a payment arrangement. Resolving or restructuring the underlying debt is often the fastest way to have a Requirement to Pay lifted.
3. Consider whether taxpayer relief might apply. In cases of genuine hardship, a taxpayer relief request under the Income Tax Act's discretionary relief provisions may be worth exploring — though CRA decides these case by case, and relief isn't guaranteed.
4. Get legal advice quickly. The faster you address the underlying debt or dispute, the sooner a Requirement to Pay can potentially be resolved.

Frequently asked questions