Setting up a Payroll Account
Setting up a Payroll Account
Hiring your first employee is a good thing – it means your business is growing and you can’t do everything yourself. Yeah! Before you can pay your new employee, you will need to let the government know you’ve hired someone. You do that by opening a payroll account with the Canada Revenue Agency (CRA). Here’s how.
Step 1: A payroll account is necessary for all employers, trustees and payers, so before you register your payroll account, determine which one you are:
Employer – pays salaries, wages, bonuses, vacation pay or tips to employees; provide taxable benefits such as room and board to employees
Trustee – authorizes payment or causes payment to be made for another person and/or deals with another person’s property, business, estate or income
Payer – can be an employer, trustee, executor, liquidator, etc. who pays
Step 2: Generally speaking, you will be paying your employees an hourly wage or salary and will be making mandatory deductions for income taxes, Canada Pension Plan (CPP) contributions and Employment Insurance (EI) which your will remit (send) to the Receiver General, Canada Revenue Agency on behalf of the employer. Check out the special payments chart page in the CRA’s website to verify which deductions you need to be making from your employees’ pay before you set up a payroll account: special payments (https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/special-payments/special-payments-chart.html)
Step 3: Make sure you have registered for a Business Number (BN) ahead of time. If you have yet to do so, have a look at GoForth’s Getting Started Guides – Registering for a Business Number. Make sure you have the following items handy, as you will need to provide the following information:
- your full name as it appears on your income tax return
- your social insurance number (SIN) as it appears on your income tax return, and
- your phone number
- details of your business operation
Step 4: Gather the necessary Payroll Account information as listed below:
- Program account name, if different from the business name
- Date the employees receive their first wages
- Physical location address of the payroll program account, if different from the business physical location address
- Mailing address of the payroll program account, if different from the business mailing address
- Months that the business will have a payroll for its employees
- Pay period (i.e. employees paid weekly, bi-weekly, semi-monthly, etc.)
- Number of employees the business will have
- Name of the payroll service, if one is used by the business
- If the business is a franchise, the name of the franchisor and the country where the head office is located
- If you are a foreign-owned corporation, the country of the parent or affiliate
Step 5: You can register for a payroll account online, by phone, or by fax or email.
By Internet with Business Registration Online
You can register for a Business Number (BN) and one or more of the Canada Revenue Agency (CRA) program accounts at the same time using the Business Registration Online (BRO) service. You can register for some provincial program accounts at the same time. Businesses that do not have complex registration requirements can use this service.
By phone
To register for a business number or a CRA program account by phone, call our toll-free Business enquiries line at 1-800-959-5525. Before calling, be ready to answer all the questions in Part A of Form RC1, Request for a Business Number (BN), and any other questions in the form that relate to the program accounts you want to open (for example, GST/HST, Payroll).
By mail or by fax
Complete Form RC1, Request for a Business Number. Once you complete the form, mail or fax it to the nearest tax service office (TSO) or tax centre (TC). To determine where to submit your completed RC1 form, go to Tax services offices and tax centres. To print a form go to Form RC1, Request for a Business Number or to order a form, go to Forms and publications.
For more information about Payroll Accounts check out GoForth’s Getting Started Guides - Paying your Employees and GoForth’s Getting Started Guides - Remitting your Deductions
Also visit: https://www.canada.ca/en/services/business.html
Once you’re finished your business planning stage, it’s time to think about training. Do you really know how to run a successful small business? That’s why we offer Canada’s leading online small business training. Make the investment in your future today – get started now.
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