How to Remit Money: Definition and Canadian Guide

What 'remit money' means

To remit money is to send a payment to a recipient. The word carries a sense of obligation. You remit money when you owe it to someone: a supplier, a tax agency, or a relative abroad. The payment settles a specific amount rather than being a casual gift.

In everyday speech, people say send or pay. Banks, accountants, and government forms use remit because it signals a formal duty. The noun is remittance, meaning the payment itself. The sender is the remitter; the receiver is the beneficiary or payee.

The term covers domestic and cross-border payments. In Canada it appears on payroll forms, tax notices, invoices, and transfer receipts. The meaning stays the same: money leaves one party and reaches another to clear an amount owed. Precision is why the word matters. A remittance is expected, not optional.

Where the term comes from and how it is used

Remit comes from the Latin remittere, meaning to send back or release. English adopted it for sending money to settle a debt. Older financial writing used remittance for any payment sent by post, draft, or messenger, long before electronic transfers existed.

Today the word appears in three settings. In accounting, a business remits an invoice payment and attaches a remittance advice. In payroll, an employer remits withheld tax and contributions. In personal finance, an individual remits money to family or institutions in another country.

Remittance, payment, and transfer compared

These words overlap but are not identical. Payment is the broadest term for giving money to settle a price or debt. Transfer describes moving funds between accounts or people. Remittance implies a payment sent to a distant recipient or authority, usually with a paper trail.

A wire transfer is a specific bank method. A money order is a paper instrument bought upfront. A bank draft is drawn on the bank's own funds. Any of these can be called a remittance when the purpose is to settle an obligation, especially across borders.

Payroll remittance in Canada

Employers in Canada withhold income tax, Canada Pension Plan contributions, and Employment Insurance premiums from each paycheque. That money is held in trust and remitted to the Canada Revenue Agency. It never belongs to the employer, even though the employer sends it.

How often an employer remits depends on the size of the payroll and its compliance history. Smaller employers may remit quarterly; larger ones remit more often. Missing a deadline can trigger penalties and interest, so payroll staff treat remittance dates as fixed.

After each remittance, the employer keeps a record of what was paid and for which period. Employees see the totals on their T4 slip at year end. If a remittance is late or incorrect, the employer is responsible for correcting it.

International remittance from Canada

Sending money abroad follows the same principle, with added currency exchange and cross-border rules. You can use a bank, a credit union, or a licensed money services business. Each channel charges different fees, applies different rates, and delivers at different speeds.

In Canada, money services businesses must register with FINTRAC and follow anti-money-laundering rules. You may be asked to show identification and explain who is receiving the money. The Financial Consumer Agency of Canada publishes guidance on sending money and comparing total costs.

The steps are similar across providers. Choose the destination and payout method, supply the recipient's details, confirm the full cost including the exchange rate, fund the transfer, and keep the receipt. Delivery is typically same day to a few business days.

What an international remittance costs

The price of an international remittance has two parts: an explicit fee and the exchange rate applied to your dollars. A rate that looks competitive can still include a margin. Compare the final amount the recipient receives, not just the headline fee.

The Bank of Canada publishes daily reference exchange rates. They are not the rates providers offer, but they are a useful benchmark. If a quoted rate sits far from the reference rate, the gap is part of what you pay.

Timing also matters. Transfers can take one to several business days. Some payout methods are faster than others. Intermediary banks may deduct a fee along the way, so ask whether the recipient will receive the exact amount you sent.

Records, taxes, and reporting

Keep a record of every remittance. A receipt shows the amount sent, the exchange rate, the fee, and the date. These details help you prove a payment, support a deduction if one applies, or answer a question from your bank or the Canada Revenue Agency.

If you hold specified foreign property, you may need to file Form T1135 with your tax return. The CRA explains the reporting rules on its international tax pages. Foreign income can also affect your return, even if tax was already paid abroad.

Fraud is a real risk. Requests for urgent remittances to unfamiliar recipients follow a common scam pattern. The Canadian Anti-Fraud Centre advises verifying the request through a second, trusted channel before sending money, and never sending funds under pressure.