Payroll remittances: what your CRA RP account actually requires

The moment your corporation pays its first employee — including you, if you take a salary rather than dividends only — payroll compliance stops being optional. Unlike most other tax obligations, missed payroll remittances can reach past the corporation and land on directors personally. Here's what an RP account actually involves.

Opening an RP account

Your business number (BN) is the umbrella identifier CRA uses across program accounts — corporate tax, GST/HST, and payroll among them. A payroll program account carries the suffix RP. You need to register one before your first payroll run if your corporation has employees, which includes an owner taking a salary. It's not required if your only payments are dividends, or if the people you pay are genuinely independent contractors rather than employees — a distinction that also connects to personal services business risk if the relationship looks more like employment than a contract.

What gets withheld from every pay

Three amounts come off an employee's gross pay before they see it:

• Income tax — based on the employee's TD1 federal and provincial forms, which set the personal credits used to calculate withholding.
• Canada Pension Plan (CPP) contributions — a percentage of pensionable earnings.
• Employment Insurance (EI) premiums — a percentage of insurable earnings, up to an annual maximum.

These are called source deductions. The money isn't the employer's — it's held in trust for the CRA from the moment it's withheld.

The employer's own portion

On top of what's withheld from employees, the employer contributes its own share. The corporation matches the employee's CPP contribution, and pays an additional employer share of EI premiums at a higher rate than the employee portion. Both the withheld amounts and the employer's matching amounts are remitted together — payroll remittance is never just what came off the employee's cheque. You can see both sides of that split for a specific pay cheque in the payroll deduction calculator.

Remitter types and how often you remit

CRA assigns every payroll account a remitter type, which determines how often remittances are due — monthly, more frequently for larger payrolls, or less frequently for smaller, newer employers. Your remitter type isn't fixed forever; CRA can reclassify it as your average withholding amounts change. Missing the deadline for your assigned frequency triggers penalties and interest, separate from any T4 filing issues.

T4 filing at year-end

After the calendar year ends, employers issue a T4 slip to each employee summarizing their pay and the amounts withheld, and file a T4 summary with the CRA, generally by the last day of February. The totals on those T4s should reconcile to what was actually remitted throughout the year — which is much easier when payroll has been tracked properly all along rather than reconstructed in January. In hospitality this is where tips surface, and the guide to tip reporting on restaurant payroll explains which tips belong in pensionable and insurable earnings.

Why directors carry personal liability here

Incorporation generally shields owners from the corporation's debts. Payroll source deductions are a notable exception. Because withheld income tax, CPP and EI are treated as held in trust for the CRA rather than as corporate funds, a corporation that fails to remit them can expose its directors personally — even after the business becomes insolvent or winds down. Directors can sometimes defend against this by showing they exercised proper due diligence, but the safest position is simply never falling behind on remittances in the first place.

Vacation pay deserves its own note here, because the deduction method changes with the circumstances. Paid while an employee is on leave, CPP and EI come off as they would on salary; paid out without leave or added to every cheque, income tax and CPP switch to the bonus method. See vacation pay rules for Canadian employers for how that affects the remittance.

The bottom line

Payroll is one of the few corners of running a corporation where a compliance slip becomes a personal problem, not just a business one. Setting up the RP account correctly, remitting on schedule, and reconciling to your T4s each year removes that risk entirely — and it's exactly what we manage as part of our bookkeeping and payroll service.

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 — please speak with a CPA before acting on anything here.

Before adding a family member to payroll, read what CRA expects when you pay a spouse a salary. If remittances have fallen behind, CRA payment arrangements explains the process.

Working through this in your own business? We advise owners on it remotely across Canada — including as a online accountant in Edmonton, a accountant in Winnipeg, a Vancouver small business accountant.

Remittance schedules are set by your withholding, not your province. We run payroll for owners across Canada, including as an accountant in Toronto, Ottawa business owners and our Calgary page.

If this is your first hire, the RP account is one item on a longer list — the full sequence is in hiring your first employee in Canada. And whenever someone leaves or has an interruption of earnings, a record of employment is due within days, not weeks.

Everything remitted through the year has to reconcile to the slips you file in February. The payroll year-end checklist walks through that reconciliation and the PIER review that follows it.