Payroll Remittances for Small Employers

Once you pay your first employee, part of every paycheque stops being yours to spend. You hold back tax, CPP and EI, add your own share, and send it to the CRA by a set date, usually the 15th of the month after you pay (or after the quarter, if you qualify to remit quarterly).

Open a payroll account

Your payroll account number has 15 characters: your 9-digit business number (BN), the letters RP, and a 4-digit reference number. You have to register before your first remittance is due, which is the 15th of the month after the month you start withholding, unless the CRA tells you otherwise. Business Registration Online is the fastest way, and you can open a GST/HST account at the same time. If you hire before the account is open, you still have to calculate the deductions and remit them on time, or you may be charged a penalty.

Before the first payday, get the employee's social insurance number and a completed federal Form TD1, plus the provincial TD1 if one applies. If you're not sure whether the person is an employee or a contractor, either of you can ask the CRA for a CPP/EI ruling. A contract that calls someone self-employed doesn't settle it, because the CRA looks at the working relationship as a whole.

What comes off each paycheque

You deduct income tax, Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums from pay, including taxable benefits and allowances. Since January 1, 2024 there's also a second CPP contribution (CPP2) on earnings above the regular CPP ceiling. The CRA expects you to hold these amounts in trust and keep them separate from your business's operating money. The figures for 2026:

Your share is on top of what you deduct. You contribute an amount equal to the CPP you take off. CPP2 is shared the same way, with you and the employee each paying 4%. Your EI premium is 1.4 times the employee's. If you fail to deduct, the CRA can assess you for both the employee's and the employer's share.

Working out each cheque

The CRA's Payroll Deductions Online Calculator (PDOC) works out federal and provincial deductions for every province except Quebec. Make sure you're on the current version. The CRA's PDOC page notes that B.C. raised its lowest personal tax rate from 5.06% to 5.60% for 2026. For pay dates on or after July 1, 2026, PDOC uses a prorated rate of 6.14%.

When to remit

Your remitter type sets your due dates. It's generally based on your average monthly withholding from two calendar years earlier.

• Regular remitters pay monthly, by the 15th of the next month. This covers average monthly withholding under $25,000.
• New small employers (payroll account open less than 12 months) remit quarterly, by April 15, July 15, October 15 and January 15, if each month's withholding is under $1,000 and they keep a perfect compliance record. Miss either condition and you become a regular remitter the next quarter.
• Established small employers can also remit quarterly if the account has been open at least 12 months, average monthly withholding in the calendar year before last was under $3,000, and the compliance record has been clean for the previous 12 months. The CRA tells you in writing if you qualify.
• Accelerated remitters, with average monthly withholding of $25,000 or more, remit up to twice or up to four times a month.

A perfect compliance record means that over the past 12 months your payroll account had no late remittances, no failure-to-remit or failure-to-deduct penalties, and no overdue T4-type returns, and any GST/HST account had no balance owing and no overdue returns. When a due date falls on a weekend or holiday, you're on time if the CRA receives the payment, or a Canadian financial institution processes it, by the next business day.

Remitting late

If you deducted more than $500 and send it late or not at all, the penalty is 3% when it's 1 to 3 days late, 5% at 4 or 5 days, 7% at 6 or 7 days, and 10% if it's more than 7 days late or never sent. Smaller amounts can be penalized too if the failure was knowing or grossly negligent, and a second or later failure in the same calendar year can be 20% if it was done knowingly or through gross negligence. Interest is compounded daily from the due date and also applies to unpaid penalties.

Year-end slips and WorkSafeBC

After the year ends, your T4 slips and summary are due to the CRA by the last day of February, and employees need their copies by the same date. Our post on filing T4 and other slips covers the details. WorkSafeBC is handled separately from the CRA; see our post on WorkSafeBC filing.

How we help

Payroll filing and remittance is one of the filings we take on, and our bookkeeping service covers payroll and WorkSafeBC. If you're remitting every month or quarter, that ongoing service is worth asking about. If you'd rather run payroll yourself, we also offer teaching sessions for you and your team.