CRA Garnishments 101 – How Much Can CRA Garnish?

Posted on 11 October 2017

When you owe money, no matter how much, to any creditor, one of the most problematic forms of collection action you face is a wage garnishment. When the debt is to the Canada Revenue Agency (CRA), things become even more problematic. If you’re concerned that a CRA garnishment may be headed your way due to unpaid taxes, you may be curious about the process or wondering how much can CRA garnish.

Firstly, the process by which CRA garnishes wages is different from the process followed by other creditors. Other creditors must first obtain a judgement against you in court, thereby making you aware of the garnishment. They will also formally notify you of a garnishment. Once this has been done, your employer is made aware of the garnishment and must then forward a portion of your wages to the creditor to pay off the debt.

With CRA garnishments, no court order is required. Instead, a notice is sent directly to your employer notifying them of the garnishment. They are required, by law, to comply. If they do not, they could face legal action. Thus, many are not even aware that CRA has implemented a garnishment until receiving a paycheque that is far smaller than expected.

How much can CRA garnish? This is another important consideration when you’re dealing with CRA debt.

If you are an employee on payroll with taxes deducted at the source, CRA can garnish up to 50% of your wages. If you are a sub-contractor, or receive a different form of income, such as a pension, CRA can garnish up to 100%.

As you can see, CRA wage garnishments are serious business, and can wreak havoc on your finances in a short period of time.

While a CRA wage garnishment should not come as a surprise – you will have been notified of the tax debt well in advance of the garnishment – if you can’t pay the debt in full, you may have limited options. Two of the most effective are a consumer proposal or bankruptcy. Both offer full protection from a CRA wage garnishment and can help you manage your other debts as well.

A CRA garnishment can be devastating financially. Don’t wait, get your tax debts resolved as soon as possible to stop a garnishment in its tracks. At Spergel, we have over 25 years of experience dealing with CRA debts.

Call us today, toll free, for a free consultation: 1-877-501-4321.

Helpful starting information:

What to Bring to an Appointment

To get the debt help that you need, please bring a list of who you owe and how much to each, a list of everything you own and your monthly household budget. Don’t have everything right away? Don’t worry – We will guide you through each step.

Download Form

Your Information

We’ll walk you through our application process. But, if you want to prepare for your debt free assessment consultation in advance, download our information form and fill in what you can.

Download Form

Calculate Your Debt Repayment Options

How can you compare your debt repayment options if you don’t know how much they will cost you? Your solution will become much clearer when you are able to compare costs.

Debt Calculator

Ready to Be Debt-Free?

If you’re ready to be debt free, it’s time to meet with one of our knowledgeable Licensed Insolvency Trustees at your convenience and get started

Meet with a trustee