Hiring your first employee — the Canadian checklist

The first hire changes what your business is, administratively. Money you pay out is no longer just an expense — part of it belongs to the CRA before it ever reaches the employee. Here is the sequence, in the order it actually needs doing.

Related: B.C. statutory holiday pay rules.

Related: WorkSafeBC workers compensation registration: who has to register.

1. Confirm the person you are hiring is an employee

First, decide employee or contractor. Errors cost one way: if the CRA reclassifies a contractor, the business owes the missed deductions, the employer’s share and penalties. See worker classification and subcontractor vs employee; where unclear, the CRA issues rulings.

2. Open an RP payroll account

Payroll runs on the RP program account on your business number; if you already have one for GST/HST or corporate tax, just add it. Open it before the first pay date.

Work out your own date with the payroll remittance calculator.

3. Get the SIN and the TD1s

Two documents before the first cheque:

• The social insurance number. You need it to report the employee’s earnings.
• Completed TD1 forms — federal and provincial. The TD1 tells you which personal tax credits the employee is claiming, which is what sets the income tax to withhold. A BC employee completes both the federal TD1 and the TD1BC. New forms are published for each tax year.

You also need to determine the employee’s province of employment, since that decides which provincial table and TD1 apply. For remote staff this is a real question, not a formality.

4. Withhold the right amounts

Withhold income tax, CPP contributions and EI premiums from each pay, then add the employer’s CPP and EI share, a cost of employment. Use the current year’s CRA rates and its Payroll Deductions Online Calculator.

5. Know your remittance due date

Your remitter type sets when the money is due, and it is generally based on your average monthly withholding amount from two calendar years ago. For a first-time employer that number is zero, which normally puts you in the most forgiving category.

A due date on a weekend or CRA-recognized holiday moves to the next business day at a Canadian financial institution. With employees but no deductions in a period, report a nil remittance. See payroll remittances and the RP account.

6. Register for workers’ compensation

This one is provincial. In British Columbia, employers register with WorkSafeBC, and premiums depend on your classification unit, not a flat rate. Register when you hire, not when something goes wrong. Other provinces have their own boards and rules.

7. Employment standards and the paperwork nobody enjoys

Deductions are federal; employment standards are provincial. Minimum wage, overtime, statutory holiday pay, vacation and termination notice come from BC’s Employment Standards Act. Keep a written offer, hours records and reproducible payroll records, and watch the employer health tax threshold as you grow.

8. Year-end

After year end, each employee gets a T4 and the summary goes to the CRA; see slip filing deadlines. A departure or interruption of earnings needs a prompt record of employment.

Decide at the start whether vacation pay accrues and is paid before vacation or is added to each cheque under a written agreement. Both are allowed in B.C. and book very differently; see vacation pay rules for employers.

The bottom line

Classify correctly, open the RP account, collect the SIN and TD1s before the first pay, remit on schedule, register for provincial coverage and keep records, each against a deadline. It is all part of our payroll services.

This article is general information for Canadian business owners and is current as of July 2026. It is not tax, legal or accounting advice, and it does not create a client relationship. Tax rules change and your situation is unique, so please speak with a CPA before acting on anything here.