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How to Stop a CRA Garnishment

CRA wage garnishments can garnish up to 50% of your earnings. Other income, such as income generated from contract work, can be garnished up to 100%! There is hope to fight the CRA. Experienced tax dispute resolution experts can help combat and end CRA wage garnishments. Contact Farber Tax today!

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How to Stop a CRA Garnishment


CRA Wage Garnishment


The Canada Revenue Agency (CRA) has incredibly strong collection powers. If you owe tax debt and have not paid it (or have not come to an arrangement that the CRA considers suitable), the agency can take several steps to get the money it believes it is owed. Many people wonder can CRA garnish wages and the answer is that yes, the agency can.

What is a CRA garnishment? When the CRA garnishes wages, some of your income is directed to the agency and used to pay off your tax debt. This means that you won’t receive your full paycheque. Obviously, this can be a serious issue. Most people cannot survive very long without their income. It becomes incredibly difficult to pay your bills, buy groceries, commute to

and from work, and handle any of your other financial commitments if your wages are being garnished.

If this is your situation, it’s only natural to be looking for how to stop CRA garnishment. Of course, the most direct answer to that is to pay the tax debt that the CRA claims you owe. However, in practice, this can be quite difficult. The CRA charges extensive penalties and interest  that can make it incredibly tough to pay down a tax debt. The CRA is also often very unwilling to negotiate with those who owe money, no matter the situation. In the agency’s eyes, the money owed should be paid off in full as quickly as possible. This means that even in those situations where the CRA is willing to talk to a taxpayer about a payment plan, they will often only agree to a plan that places the tax debt ahead of any other debt or expense. In these instances, it can be tough to comply with the CRA’s payment schedule and still pay the rest of your bills.

When the CRA takes enforcement action against you, imposing a CRA garnishment for example, it can be impossible to get them to reduce or lift the enforcement action on your own in a way that makes sense for you financially. You could be experiencing extreme financial hardship, or your job or business could be at risk, but it won’t matter, because once the CRA tightens their grip you will find it difficult to get them to loosen it.

If your wages have been garnished by the CRA, it’s important to handle the situation correctly. The agency uses the leverage it gets from wage garnishment to influence negotiations. It knows most people will need to have the wage garnishment lifted as quickly as possible, so taxpayers often agree to anything to stop the garnishment. This isn’t usually a good idea. While stopping the garnishment is important, it’s critical to do so in way that makes financial sense for you. That’s why you should work with a professional. A team that has experience in communicating and negotiating with the CRA is your best chance at receiving a fair outcome. At Farber, we understand how to stop CRA garnishment and how to resolve tax issues. A CRA Payroll Garnishment Notice can seriously restrict your income, making it tough to afford your expenses. We can help stop a CRA garnishment.

Contact us today to find out what we can do.

Worried about a CRA Wage Garnishment? Talk to a Ex-CRA tax dispute expert for free. We can help by:


  • 1| Offering a comprehensive solution that is focused on achieving the most favorable possible outcome for your tax issue;
  • 2| Communicating with the CRA on your behalf and navigate the entire CRA dispute process; and
  • 3| Offering a complete solution to your tax problems, including ex-CRA professionals in affiliation with tax lawyers from Farber Tax Law.

Can CRA Garnish Wages?


Yes, the CRA has the legal ability to send out a Requirement to Pay, which must be followed. This means it can garnish your wages if it deems it necessary to do so. For instance, if the agency sends the Requirement to Pay to your employer, they must comply and send your wages to the CRA as directed. If they do not, they could face fines and potential legal action. One important thing to note is that the CRA can send a Requirement to Pay without a court order. This means they can send it without notice and the third party (such as an employer or a client) will have no choice but to do as it states. The CRA can garnish up to 50% of your income if you are employed and have taxes deducted at the source. This is the situation that many people are in, and one that can cause significant problems.

It’s very difficult to afford your life when you instantly lose 50% of your earnings. Many people live paycheque-to-paycheque or close to this line, and that means they need all the money they earn to afford their expenses. If 50% of it is directed to the CRA, it becomes almost impossible to afford rent or mortgage payments, groceries, transportation costs, gas and electricity bills, and much more. Not only does this cause significant stress and anxiety, but it can also lead to future debt problems. It doesn’t matter if you’re having your wages garnished, bills don’t stop coming in. This means most people will need to take on debt (such as credit card debt or a line of credit) to make ends meet. This is a significant problem as these forms of debt often come with very high interest rates, making them incredibly tough to pay off.

If you are self-employed, the situation can be even more difficult as the CRA can send Requirement to Pay documents to any of your clients who owe you money. Once they receive these notices, they will have to send the money they would have used to pay your invoices to the CRA instead. The CRA is legally allowed to garnish 100% of self-employment income. This means that you could conceivably end up in a situation where you have no money coming in. Obviously, that is a serious problem and one will need to be solved quickly.

However, while it’s critical that you act fast, it’s also important that you make the right moves and go through the process correctly. CRA processes and the Canadian tax code are very complicated. CRA agents know that they have the upper hand in almost any negotiation with a taxpayer since they have extensive experience in these situations. They also know that most people are desperate to put a stop to the wage garnishment, which means they’ll possibly be willing to accept any agreement, even if it’s one that doesn’t make financial sense for the taxpayer.

Before agreeing to anything with the CRA, you need to make sure that it’s workable for you. You don’t want to wind up in a situation where you have actually made your situation worse by agreeing to a bad deal. Contact us today to find out how we can help.


Why Does CRA Garnish Wages?

The CRA is legally authorized to garnish wages if you owe tax debt and have not paid it nor have you communicated with the CRA in a manner that it considers acceptable. It does this to collect on debt that is owed to the agency. Legally, all Canadian taxpayers who owe taxes are required to pay them. If they do not, the CRA can take steps to collect on the debt.

If you owe a tax debt and do not pay it, the CRA can garnish your wages. Can CRA garnish wages without notice? T

he answer is yes, the agency can. This is one of the very strong collection powers that the CRA has. What this means is that, if you owe tax debt, the CRA can send an order called a Requirement to Pay to a third party (such as your employer) and instruct them to send the funds they would have sent to you to the agency instead. This means that a portion of your paycheque will go directly to the CRA to pay for your tax debt.

The CRA uses the money that it garnishes to reduce or pay off the taxes that you owe. The order can stay in place until your debt is paid or until the CRA issues another legal notice stating that the garnishment can be lifted. This means your wages could be directed to the CRA until your tax debt is paid off in full. If you owe a large amount of tax debt, it can keep the garnishment in place for quite some time.

The longer the garnishment remains, the more difficult it becomes to afford your monthly expenses. Bills will keep coming in and, if you don’t have access to your full income, paying them will be very challenging. The result is that most people who have had their wages garnished will want to resolve the situation as soon as possible.

If you agree to a payment plan with the CRA, the agency may lift the garnishment. However, it’s vital that you use caution when negotiating with the CRA. You may want the garnishment lifted quickly, but it’s important to handle the situation correctly as well.

Most people cannot afford their lives for very long if they are not receiving their full paycheque. This is especially true for anyone who is living paycheque-to-paycheque. The CRA knows this. That’s a big reason why the agency garnishes wages. It knows that those who are having their wages garnished will be searching for any method for how to stop CRA garnishment. This situation leads to people accepting whatever agreement the CRA offers them. Unfortunately, in many cases, these payment agreements are structured in the CRA’s favour. In these deals, the tax debt is considered more important than any other debts or expenses and the taxes must be repaid quickly. If someone agrees to a deal like this in hopes of stopping a wage garnishment, they could very quickly find themselves in financial trouble when they can’t afford the rest of their financial commitments. This is obviously a situation you don’t want to find yourself in.


Have A CRA Wage Garnishment Issue? Talk to a Ex-CRA tax dispute expert for free.

Types of CRA Garnishment: The CRA Garnishment Rules


CRA Wage Garnishment Rules

If you do not pay the tax debt that you owe, the Canada Revenue Agency (CRA) has very strong powers that it can use to collect. One of these methods is CRA garnishment. This means that the CRA can request that your employer direct some of your paycheque to the agency instead of giving it to you. The CRA can also do the same for your bank account.

If your employer receives a CRA payroll garnishment notice, it has no choice but to comply. The same goes for a bank.

It’s important to note that the CRA can take enforcement action against you without going to court. This is a huge power that they have – every other creditor must get a court order first before being able to take enforcement action. The CRA does not need to warn you or get a court order to come after you.

The CRA has many strong powers that it uses to collect tax debt, including:


  • CRA Garnishment

    • As mentioned, the CRA can impose a garnishment of up to 50% of employment income and up to 100% of other types of income including sub-contractor income. They can also send a demand to the clients of businesses or business owners to re-direct receivables to them. A CRA garnishment is embarrassing, can cause major financial disruption, and can cause irreparable harm to a business and/or business owner. If the CRA is garnishing you or threatening you, this situation must be dealt with properly and quickly.


  • Requirement to Pay – Frozen Bank Account

    • When the CRA (Canada Revenue Agency) decides to freeze a bank account they will send you and the bank a letter called a “Requirement to Pay”. This letter will indicate the amount of the tax debt, the terms of the “Requirement to Pay,” and it will direct the bank to freeze your bank account. The bank will then hold the frozen funds for a period of time and then forward them to the CRA.
    • If your bank account is frozen, you will be left with:
      • No way to pay your bills
      • No way to conduct business
      • Nowhere to deposit your income
    • If you want to avoid a Requirement to Pay or get one lifted, click here to request a free consultation with our team.


  • Property Lien

    • If you own a home the CRA (Canada Revenue Agency) can register a property lien against you at any time. However, unlike other CRA garnishment action, the CRA must first obtain a certificate against you, and then register it in the Federal Court of Canada.
    • A tax lien will cause you major problems. You will have difficulty selling or refinancing your home until you have paid the lien or resolved your tax problem. Existing mortgage holders will also be notified of the lien and this may damage your relationship with them.
    • If the tax lien is greater than the equity in your home, this represents an even larger challenge because existing mortgage holders will not be able to renew without the CRA moving into first position on title.
    • This means that if you have a lien on your property you should be looking for a solution to deal with it well before any existing mortgages that you have on your home come up for renewal. We are often successful at negotiating the postponement and removal of liens imposed by the CRA.



CRA Garnishment Limits: How Much Can CRA Garnish?

How Much Can CRA Garnish?


Garnishment is very difficult to handle for taxpayers. After all, you need your income to pay for your expenses and, without it, affording your life becomes almost impossible.

How much can CRA garnish? As mentioned, if you are employed and have taxes deducted at the source, the CRA garnishment can be applied on up to 50% of your earnings. This means that potentially half of your income could be directed to the CRA! As you can assume, it is very tough to survive financially on only 50% of your income, however, this is what CRA garnishment rules state is possible. Many people who have their wages garnished by the CRA wind up in significant financial trouble due to the loss of income.


Self-employment Income Garnishment


However, if you have other income, such as self-employment income, the CRA can send notice to your clients to redirect all payments to the agency. This means you could lose 100% of your invoices to the CRA. Many people earn all of their money from contact or freelance work, which means you might end up with absolutely zero dollars coming in due to a CRA garnishment. On top of the financial disaster that this can cause, a CRA garnishment notice can also harm your reputation. If your clients are told that you have not paid your taxes, this could cause them to think less of you and your work, which can lead to lost business.

Many people and organizations want to work with those they trust. They want to work with someone who they believe to be honest and trustworthy. Unfortunately, there is a general belief among many that someone who owes a debt isn’t someone who can be counted on. While this is certainly not true, and there are many times where honest and trustworthy people end up in debt trouble, the negative reputation remains. This means that in addition to having the money you earned go directly to the CRA, you could potentially harm your reputation and, thus, earn less in the future as well.


The Personal Effects of a CRA Garnishment


A wage garnishment has a significant and negative affect on your life. Not only will you lose money, but you could damage your personal and professional relationships.

Note that the CRA can also deploy multiple enforcement actions against a single taxpayer with respect to a single tax problem. For example, if you owe the CRA $50,000, they could freeze your bank account, place a lien on your home, and impose a CRA garnishment. The CRA uses these collection and enforcement actions to ensure compliance with tax law and to give them leverage during the negotiating process. It’s very tough to negotiate with an agency that can threaten you with strong powers whenever it likes.

That’s why it’s critical to work with experts who are on your side. Farber Tax Solutions is made up of experienced ex-CRA, and legal professionals. We are your best defence against the CRA. A CRA garnishment, or the threat of garnishment, must be dealt with quickly so that you do not lose your income or your bank account.


Will the CRA Notify Me of a Wage Garnishment?



The CRA will send a copy of the Requirement to Pay to you at the same time it sends it to the third party (for example, your employer). You will not get any advance notice of this. If you have your earnings automatically deposited into your bank account, you may only realize that a garnishment is in place when you don’t receive a deposit. The same is true if you are paid by cheque. You may not know that the CRA has taken action until you aren’t given your pay by your employer. Many people (especially those who are having tax problems or debt issues) do not open their mail regularly. This could result in you missing out on the Requirement to Pay Notice and not having any idea that a garnishment is in place until you realize your money is missing.

You do not need to respond to the Requirement to Pay order or take any action. Even if you ignore it, it still goes into effect. When your employer receives the notice, they will be required to comply immediately and there is nothing you can do at this point. If third party (such as an employer or a client) does not comply with the notice when requested to do so, they could face fines, penalties, or legal issues.

Some people try to avoid the CRA, but the agency has incredible powers and reach. It uses these powers to not only collect the tax debt that it believes is owed to it, but also to encourage taxpayers to pay. If the threat of having your wages garnished is hanging over your head, you’ll be much more likely to accept anything the CRA requires of you. This can be a dangerous situation. Traditionally, the CRA has all the leverage when it comes to negotiations. Not only does it have experience and detailed knowledge of Canadian tax codes, but it can also use its powers to influence negotiations. This makes it incredibly tough for most taxpayers to get a fair deal. CRA agents know this and they use these facts to their advantage.

That’s why it’s vital to speak work with a professional when communicating with the CRA. The experienced team at Farber will level the playing field and help you resolve your tax problem in a way that you can afford. Don’t risk revealing critical information to the CRA or accepting a deal that can hurt you financially.

At Farber, our team is made up of experienced legal, and ex-CRA professionals who know how to get results. We fully understand CRA processes and know what needs to be done to successfully navigate them. Our years of experience help us fairly negotiate and communicate with the CRA to resolve tax issues. If you have a tax problem, are being threatened by a wage garnishment, or if you have already had your wages garnished, we can help. Our proven track record stands for itself. Contact us today for more information on what Farber can do for you.

Worried about a CRA Wage Garnishment? Talk to a Ex-CRA tax dispute expert for free. We can help by:


  • 1| Offering a comprehensive solution that is focused on achieving the most favorable possible outcome for your tax issue;
  • 2| Communicating with the CRA on your behalf and navigate the entire CRA dispute process; and
  • 3| Offering a complete solution to your tax problems, including ex-CRA professionals in affiliation with tax lawyers from Farber Tax Law.

What Types Taxes can be Collected via a CRA Garnishment?



As mentioned, the Canada Revenue Agency has very strong powers when it comes to enforcing tax law and collecting taxes that it believes are owed to it. One of these powers is wage garnishment.

Tax law in Canada permits the CRA to take collection action for several different types of taxes, including income taxes, withholding taxes, GST/HST/PST taxes, Employment insurance (EI) and Canada Pension (CPP) overpayments, and customs duties and taxes. If you owe a debt on any of these taxes and have not paid it or made arrangements with the CRA, the agency can take collection action against you.

The CRA is a powerful agency. It uses its powers to encourage taxpayers to pay their taxes quickly. Since taxpayers obviously do not want to have their wages garnished or bank accounts frozen, for example, they often go along with whatever the CRA asks.

Many people wonder, for example, can CRA garnish wages without notice and the truth is that they can. This threat is used to increase compliance. If you know that the CRA will seize your wages if you do not pay, you’re a lot more likely to pay even if you actually can’t afford to do so.

The threat of wage garnishment also affects potential negotiations with the agency.

More people, understandably, do not want to have their wages garnished. This means that they’ll likely do whatever they can to avoid having it happen. In addition, if your wages are being garnished, you’re likely to do whatever the CRA wants if it means the garnishment action will stop. This is not a great situation to be in. The CRA knows that it can use the threat of garnishment action as well as its other strong collection powers (such as freezing your bank account, seizing your assets, and more) to convince you to agree to a deal that may not make sense for you.

While it’s natural that you’ll want to have the garnishment stopped as soon as possible, it’s crucial that you also act with caution and do your due diligence whenever you’re speaking to the CRA. Agents will try to get you to agree to a deal that gets them the money as quickly as possible. However, this likely won’t make financial sense for you. Agreeing to an aggressive payment schedule could leave you without the money you need to afford the rest of your expenses. However, the CRA considers the debt owed to it to be the most important, and thus agreeing to a deal might make the rest of your financial life difficult.

If you want to discover how to stop CRA garnishment without hurting your financial situation, it’s a good idea to work with a professional. The CRA not only has strong powers, but its negotiators have the experience and knowledge of tax codes that most taxpayers do not. Before you attempt to speak with them, level the playing field and work with the team at Farber. We are experienced, knowledgeable, and can help you resolve your tax issue in the most favourable manner possible.



How Long Does It Take for CRA to Garnish Wages?

How Long Does It Take for CRA to Garnish Wages?


If you owe a tax debt to the CRA and have not paid your debt, you’re probably worried about when the CRA will start to garnish your wages. The reality is that once the agency sends the Requirement to Pay notice to your employer or client (you will receive a copy), they must comply with the notice immediately. Employers and clients have no choice by to go along with the process and send the funds that they would have sent to you directly to the CRA. There is no room for negotiation by them. Failing to immediately act on the Requirement to Pay could result in fines, penalties, and legal trouble.

Remember, the CRA can garnish up to 50% of your income if you receive pay from an employer and have taxes deducted at the source. This is a significant amount and the garnishment will stay in place until your tax debt has been paid off completely (or you come to terms with the CRA, which can be difficult to do). Depending on how much you earn and how much you owe in tax debt, you could find yourself without a large portion of your income for a very long time. That means you’ll have to find a way to afford your rent or mortgage payments, transportation costs, groceries, utilities, and all of your other expenses without half of your income. Obviously, this is incredibly difficult to do.

If you are self-employed or do contract work, the situation can be even tougher. In these instances, the CRA is able to garnish 100% of your invoices. This means the agency will send a Requirement to Pay to your clients, demanding that they send the money they would have sent to you to the CRA instead. Much like with an employer, your clients will have no choice but to comply immediately. Clients will obviously not want to end up facing fines and penalties from the CRA, so they will do as they are asked. Of course, this means you’ll be expected to find a way to survive without any income at all.

In addition to hurting financially, a wage garnishment could also negatively affect your reputation. If your employer or your clients receive a Requirement to Pay, they will know that you are having a tax issue. This could cause them to think differently about you and that could potentially harm your reputation. This is especially true if you work in a field where you are responsible for managing money or handling finances. While it may not be true, clients and employers could start having doubts about your abilities if they know you are having an issue with your taxes. This could hurt future business and employment opportunities.

As you can see, a wage garnishment is a huge issue. This naturally leads to many people asking how to stop CRA garnishment. The reality is that you’ll need to use a lot of care when speaking with the CRA and attempting to have a garnishment stopped. Working with professionals will give you the best chance at success.



How to Deal with A CRA Garnishment? Can you Negotiate with CRA?



As outlined, CRA garnishment is a serious issue. Having your wages garnished not only means that you won’t have access to your paycheque (which is clearly a huge issue), but it can also have a significant impact on your personal and financial life going forward. It becomes tougher to afford expenses, pay your bills, and live daily life without your full pay. A garnishment could also harm your personal and professional reputation. Since this is true, it makes sense that people who are faced with such a situation want to know how to stop CRA garnishment as quickly as possible. The longer you go without access to your earnings, the more difficult things become.

However, while it’s understandable that you will want to put a stop to the garnishment as quickly as possible, it’s also incredibly crucial that you communicate and negotiate with the CRA carefully. Small mistakes can have huge impacts on the rest of your life, so you need to make sure you’re following a sound strategy. In these situations, it is strongly advised that taxpayers work with a professional. The CRA is very powerful and this is not the time to take a risk.

If the CRA is taking action against you, click here to contact us now. We routinely negotiate the reduction and removal of enforcement measures.

Negotiating with the CRA is a lengthy and difficult process. The first reason why is because CRA processes (and the Canadian tax code as a whole) are very complex and difficult. CRA agents know the ins and outs of these processes, but most taxpayers do not. The agency uses this to its advantage.

Another reason is because the CRA considers debt owed to it to be the most important debt and wants it to be repaid as soon as possible, before any of your other debts or expenses. This means that, even if the agency is willing to discuss a payment plan with you, they will likely only offer a plan that sees your tax debt paid very quickly, despite the fact that you also have other financial commitments. The team at Farber understands this and we are on your side to help resolve tax problems.

Our experience and knowledge help balance the situation. We have a strong and in-depth knowledge of CRA processes and tax codes. That means we also know how to navigate them and get results. We work to effectively negotiate with the CRA to find solutions that make sense for our clients.

CRA garnishment limits state that the agency can garnish a significant portion of your income, and you will not want to go long without your money. However, the situation must also be dealt with correctly. Even a small misstep can potentially result in serious trouble. Communicating with the CRA can be frustrating and time-consuming, so you’ll want to have experienced professionals on your side.

Let the Farber team work to resolve your tax problem. Contact the experienced team at Farber Tax Solutions today to discuss your situation and find out how we can resolve your tax issue.

Have A CRA Wage Garnishment Issue? Talk to a Ex-CRA tax dispute expert for free.