Payroll Account

Q. Are you an employer?
A. Canada Revenue Agency (CRA) generally considers you to be an employer if:

• You pay salaries, wages (including advances), bonuses, vacation pay, or tips to your employees; or
• You provide certain taxable benefits or allowances, such as board and lodging, to your employees

In these situations, an employer-employee relationship or employment under a contract of service may exist if you have the right to control and direct the person or people who perform the services.

Although a written contract might indicate that an individual is self-employed or working under a contract for services, CRA may not consider the individual as such if there is evidence of an employer-employee relationship.

In all situations, the written contract (if applicable) and working conditions must be examined to determine if an employer-employee relationship exists. If you're not sure of your status, see What you need to consider to determine a worker's employment status.

If you or people working for you have any doubt about whether an employer-employee relationship exists, you can request a ruling.

Q. When do you have to open a payroll account?
A. You have to register for a business payroll before the first remittance due date. Your first remittance due date is the 15th day of the month following the month in which you began withholding deductions from your employee's pay.

Examples
You hire an employee on March 10 and you pay him bi-weekly. The first pay is on the 24th, therefore your first remittance due date would be April 15. You hire an employee on March 24 and pay him on April 3. Your first remittance due date would be May 15. If you didn't open an account before hiring employees, you still need to calculate deductions and remit them by the due date. If you fail to deduct or remit on time, you may be assessed a penalty.

Q. How to Register a Payroll Account
A. You have two options when registering for Payroll Account:
Option # 1
You can always visit your local Canada Customs and Revenue Agency office and complete the registration form. Please make sure that you fully understand the questions on the registration form and answer them correctly. It is quite difficult to change certain information once it is recorded. (You may have to wait for up to one year). Also, be prepared for delays due to the workload. Online Payroll account registration would be the fastest.

Option # 2
We can easily assist you to register payroll at our office. You can visit our office or submit your information via fax or e-mail. If you are wandering why should you let us help you with registration, the answer is simple.

• You do not have to take any time from your busy schedule to do the registration.
• If you are located in a small town, there is no need to travel, just order by fax.
• We have the expertise to complete the registration in the way that best suits your needs.
• We work for you, not the government.
• For a small fee of $ 35.00 we will do all the necessary work for you.
• We can help you with the next step - Payroll report preparation.

Q. How do you calculate deductions?
A. Calculating deductions
After you have determined that you are an employer and have opened a payroll account, you have to calculate the CPP contributions, EI premiums, and income tax deductions based on the amounts you pay your employees. You also have to calculate the employer portion. Hold these amounts in trust for the Receiver General in a separate account from your operating business account.

Q. How do I remit deductions?
A. Remitting deductions
As an employer, you have to remit the CPP contributions, the EI premiums, and income tax deducted from your employees' income, along with your share of CPP contributions and EI premiums. These deductions, along with your remittance form, must be received by CRA on or before your remittance due dates. Due dates vary depending on the type of remitter you are, but in most cases your payment must be received on or before the 15th day of the following month. Failure to submit in a timely manner will result in a minimum fine equal to 10% of your total remittance.

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