Can a director be personally liable for unpaid payroll deductions or GST/HST?

Arsen Accounting Services · Question 190 · Sources checked October 29, 2026

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Yes, directors can face personal assessments for certain unremitted amounts when the statutory conditions are met. Incorporation does not provide complete protection for payroll source deductions or GST/HST collected and not remitted.

Monitor remittances actively

CRA's guidance describes requirements for recovering amounts from directors, applicable time limits, and the due-diligence defence. The defence depends on reasonable steps to prevent the failure; it is not established simply by saying a bookkeeper handled the account.

Directors should obtain evidence that deductions are calculated, returns filed, and payments credited. A cash-flow shortage should prompt an immediate review rather than an assumption that collected tax is available for ordinary spending.

Official guidance: [1].

Make oversight visible

For example, a director can request a monthly reconciliation of payroll and GST/HST liabilities to CRA account balances and payment confirmations. Record questions, discrepancies, and corrective steps. That is more useful than relying on a verbal assurance at year-end.

Keep governance records

• Remittance schedules and account reconciliations.
• Filing and payment confirmations.
• Board discussions of arrears and remedial action.
• Accurate appointment and resignation documentation.

If an assessment or demand has arrived, seek prompt professional advice and identify the response deadline. A resignation does not automatically erase earlier exposure, and its legal effectiveness matters. Keep the corporate and personal issues separate while ensuring the underlying accounts and records are reconstructed accurately.