Hiring your first employee in Canada: the complete checklist

The first hire turns a business into an employer, with new accounts, new forms and short deadlines. This guide puts the steps in order. The pay calculation itself is covered in how to run payroll in Canada.

Employee or self-employed?

Before anything else, make sure the person is an employee. The CRA looks at the whole working relationship: how much control you have over the work, who provides the tools and equipment, whether the worker can subcontract or hire helpers, who carries the financial risk and has the chance of profit, and what you both intended. If you set the hours, supply the equipment and direct the work, the answer is usually employee. When in doubt, either of you can ask the CRA for a ruling.

Before the first day

Open a payroll program account (RP) with the CRA, added to your business number, before the first remittance is due. See how to get a CRA business number.
Register with your provincial workers' compensation board (WSIB in Ontario, WorkSafeBC, WCB in Alberta and other provinces, CNESST in Quebec). Coverage is compulsory for most industries; the board sets your premium rate.
Check employment standards for your province: minimum wage, overtime, statutory holidays, vacation and pay-statement rules. Federally regulated industries such as banking, airlines and interprovincial trucking follow the Canada Labour Code instead.
Check provincial payroll taxes: some provinces have an employer health tax on payroll above an exemption. In Quebec, register with Revenu Québec for source deductions (QPP, QPIP and Quebec income tax).
Set the pay: rate, pay frequency and payday. Common choices are weekly, biweekly and semi-monthly.
Choose how you will run payroll: in your accounting software, a payroll service, or your accountant.
Write the offer: job title, pay, hours, start date and any probation period, signed by both of you.

On the first days

Social insurance number (SIN). The employee must give it to you within 3 days of starting. Check it against their SIN confirmation, and keep it secure; it goes on the T4 and ROE.
TD1 forms. Ask for the federal TD1 and the provincial TD1 for the province of employment. They set the personal tax credits you use when calculating income tax. An employee who does not complete them gets the basic personal amounts. Quebec employees complete Revenu Québec's TP-1015.3 for Quebec income tax.
Direct deposit details, if you pay by direct deposit.
Emergency contact and any policies they need to sign.
Benefits enrolment, if you offer group benefits or an RRSP plan.

Payroll deductions

From each pay you deduct three things, and you add your own employer share to two of them:

Deduction	Employee (2026)	Employer (2026)
CPP	5.95% of pensionable earnings between $3,500 and $74,600 (maximum $4,230.45)	Matches the employee
CPP2	4% of earnings between $74,600 and $85,000 (maximum $416.00)	Matches the employee
EI	1.63% of insurable earnings up to $68,900 (maximum $1,123.07)	1.4 times the employee premium
Income tax	Federal and provincial, from the TD1 claims and the CRA's formulas	None

Quebec is different: employees there pay QPP instead of CPP, a lower EI rate, and QPIP premiums, and Quebec income tax is remitted to Revenu Québec. Legislation passed in June 2026 lowers the base CPP rate from 2027; the CRA publishes the 2027 figures late in the year. The Canada payroll calculator shows an example pay, and the payroll tax rates page lists the current figures.

Also check what counts as pay. Vacation pay, overtime, bonuses and most taxable benefits are part of earnings for deductions. The CRA's Payroll Deductions Online Calculator (PDOC) is a good way to check your first few pays.

Remitting and year-end

Remit the employee deductions plus your CPP and EI shares to the CRA. Most new employers are regular remitters, due by the 15th of the month after the pay date. Larger employers remit more often. See CRA remittance schedules and the PD7A page.
Record each remittance in your books against the payroll liability accounts, so they clear to zero.
T4 slips: give each employee a T4 and file the T4 slips and Summary with the CRA by the last day of February. For 2026 that is Monday, March 1, 2027, because February 28 is a Sunday. Quebec employees also get an RL-1. See T4 and T4A deadlines.
Records: keep payroll records for six years from the end of the last tax year they relate to.

When someone leaves

When an employee has an interruption of earnings (they quit, are laid off, go on leave or are dismissed), you issue a Record of Employment (ROE). Filed electronically, it is due within 5 calendar days after the end of the pay period in which the interruption happens (with a slightly different rule for monthly pay periods). Pay any final wages and vacation pay owed under provincial rules. The ROE guide and ROE reason codes explain each block.

Provincial rules

Employment standards are mostly provincial, so check your own province's site. The topics to look up are the same everywhere:

Minimum wage, which differs by province and changes, often on April 1 or October 1.
Overtime threshold (daily, weekly or both) and rate.
Vacation: at least two weeks a year, or 4% vacation pay, in most provinces, rising with years of service; some provinces start higher.
Statutory holidays and holiday pay.
Pay statements: what must be shown on each one.
Payroll taxes and workers' compensation, as above.

Checklist

Confirm the worker is an employee, not self-employed
Open the RP payroll program account with the CRA
Register with your provincial workers' compensation board
In Quebec, register with Revenu Québec for source deductions
Check minimum wage, overtime, vacation and holiday rules for your province
Set the pay rate, frequency and payday
Get the SIN within 3 days of the start date
Collect federal and provincial TD1 forms (and TP-1015.3 in Quebec)
Set up the employee in your payroll software and check the first pay against PDOC
Remit deductions by the 15th of the following month
Issue an ROE within the deadline when an employee leaves
Give T4 slips and file the T4 Summary by the last day of February

In AcboBooks

The Canadian edition of AcboBooks calculates federal and provincial income tax, CPP, CPP2 and EI with the CRA's T4127 formulas (the July 2026 tables), and QPP and QPIP for Quebec employees. Each employee record takes the federal and provincial TD1 claim amounts, with blanks meaning the basic personal amounts, plus boxes for CPP or EI exemptions, and an HR checklist (TD1 forms on file, SIN verified, direct-deposit form, handbook signed). Vacation and sick time accrue on every paycheque. AcboBooks totals the month's PD7A remittance, prepares T4 slips and the T4 Summary, and prepares a Record of Employment worksheet for ROE Web. It does not remit or file for you, and it does not produce RL-1 slips. The Academy lessons on adding an employee and remitting source deductions show the screens.

Sources and official links

Last reviewed October 26, 2026. Government pages change; if a figure here differs from the official page, the official page wins.

Frequently asked questions

When does a new employee have to give me their SIN?

Within 3 days of starting work. If they do not, make a reasonable effort to get it and tell Service Canada within 6 days of the start date. An employee waiting for a SIN can start work if they apply within 3 days of starting and give you the number within 3 days of receiving it.

What if the employee doesn't fill in a TD1?

Deduct income tax as if they claimed only the basic personal amount, federally and provincially, until they give you completed forms.

When is my first remittance due?

Most new employers are regular remitters, so deductions from pay dates in one month are due to the CRA by the 15th of the next month. The CRA may let a new employer remit quarterly if the monthly withholding is under $1,000 and the compliance record is perfect.

Do I need a payroll account to pay only myself from my corporation?

Yes, if the corporation pays you a salary. If you take only dividends, no payroll account is needed for those, but the corporation issues T5 slips instead.

How long do I keep payroll records?

Six years from the end of the last tax year they relate to, the CRA's general rule. Service Canada also expects ROE records to be kept for six years.

This article is general information, not tax, legal or accounting advice. Rules and dates change; check the official source or ask your accountant before acting.