How to Stop a CRA Wage Garnishment

Dealing With the CRA

Tax is a fundamental component in society, and it wouldn’t be possible for great nations to form in the modern world without this mechanism.

People contribute a small amount of their own money to help fund their government, keep their roads maintained, and a huge range of other areas that wouldn’t be able to get money from elsewhere.

Of course, though, it isn’t always easy to keep up with payments like this.

The Canada Revenue Agency works hard to ensure that everyone pays their due when it comes to taxes, and they have a huge range of tools at their disposal to get their money.

A CRA wage garnishment is a prime example of this, but what exactly does this process entail and how can you work to stop one when it is happening to you?

Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation

Call 877-879-4770


What is a CRA Wage Garnishment?

A CRA wage garnishment is an order that is presented to your employer, requesting that they pass on a percentage of your pay before you receive the rest.

This is designed to make sure that those who are struggling to pay their taxes can make mistakes, and the CRA doesn’t need to take you to court to issue one.

Your employer doesn’t have to tell you that this is happening, but the CRA will mail a copy of the notice to you so that you know that it is coming.

By this point, you will have probably received plenty of warnings that this is going to happen, but The Canada Revenue Agency has the power to issue a request like this at their own discretion.

This sort of order can apply to more than just your employer.

The CRA can also collect money received from the sale of assets, earnings as a contractor or subcontractor, and payouts from investments.

In some cases, they will even be able to freeze bank accounts to make sure they get the tax you owe.

How Much of Your Wage Can be Garnished?

The amount of money that can be taken with a CRA wage garnishment depends on the type of employment you work under, along with the amount of money you owe and earn.

Normal employees will have up to 50% of their wages garnished, while contractors and those who are self-employed can have up to 100% of their earnings collected.

They will usually work out a plan that won’t leave you unable to survive.

What Kinds of Taxes Can Be Collected via a CRA Wage Garnishment?

The Canada Revenue Agency can use a wage garnishment to collect tax debt and government overpayments in a range of different forms.

Income tax debt, custom duties and taxes, Employment Insurance (EI) and Canada Pension (CPP) overpayments, GST/HST/PST debts, and withheld taxes can all be taken like this.

How to Stop a CRA Wage Garnishment in Canada

The government will work hard to collect any taxes you owe, but they also understand that it can be difficult to manage something like this.

For this reason, you can still protect yourself from a CRA wage garnishment with the help of the Bankruptcy & Insolvency Act, with two options on the table; consumer proposals and bankruptcy.

Both of these options offer a stay of proceedings, and this means that any wage garnishments that have been put in place will be stopped immediately.

Along with this, any lawsuits and harassment related to your tax debt will also be brought to a close.

Filing a Consumer Proposal

A consumer proposal is an agreement that is made with a creditor to set new terms to the money you owe them.

This could mean freezing interest payments, extending the duration you have to pay your debt, and even getting released from your debt early.

Bankruptcy Canada can help you to file a document like this, providing advice and support that will enable you to make the right decision.

Filing for Personal Bankruptcy

When you owe a lot of money or have been struggling to pay your debts for a long time, the CRA may not be willing to approve a consumer proposal, and this can make it worth looking at another route.

Filing for personal bankruptcy is more serious than a consumer proposal, and you will have to work very hard to pay off your debt and get out of it.

There will usually be strict terms placed on this, but you will finally have financial freedom once the process is complete.

Getting Help from Bankruptcy Canada

Bankruptcy Canada has spent a long time working with clients to solve their financial problems.

A CRA wage garnishment can be extremely difficult to live with, and many people end up stuck with them for a long time.

We can help you out of this trap, providing you with confidential and obligation-free support.

We will begin this process with a consultation to determine the best route for you to take.

With over 20 years of working with CRA tax issues, our expert team has a good understanding of the way this institution operates and will be able to provide reliable advice as you go through it.

We will draft your documents, ensuring that they are handled and processed correctly to stop your wage garnishment as soon as possible.

Once you’ve filed your consumer proposal or bankruptcy, we will notify your employer to stop the wage garnishment that has been put into place.

You may need to spend some time negotiating before you are able to settle into paying the taxes you owe, but we can help you with this to make sure that you get the best deal you can.

We work hard to give our clients the best possible experience, and we encourage you to get in contact with our friendly team if you’re facing the prospect of a CRA wage garnishment or are already going through this process.

You can call us at 1-877-879-4770 or send an email to, and we’ll get to work on stopping your garnishment in its tracks.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.