Set up the payroll account and employee records
Before the first payroll, confirm account registration, employee information, tax forms and the province of employment. Employment standards and tax treatment are not identical across Canada. Worker classification also matters; calling someone a contractor does not settle their status.
Calculate deductions using current rules
Income tax deductions, CPP contributions and EI premiums depend on applicable rates, limits and individual circumstances. Quebec can involve QPP, QPIP and separate provincial administration. Use current-year calculation guidance and confirm treatment of taxable benefits and unusual payments.
Remit on the correct schedule
The employer’s CRA remitter type determines the remittance schedule. Keep employee deductions and employer contributions reconciled to payroll reports and payments. A payroll run is not complete merely because employees received their net pay.
Prepare for T4 year-end reporting
Reconcile annual earnings, deductions and benefits before preparing T4 slips and the summary. Information returns are generally due by the last day of February following the calendar year, subject to applicable rules. Missing payroll details are easier to resolve throughout the year than at the reporting deadline.
Frequently asked question
Does payroll only involve employee deductions?
No. Employers can also have contribution, remittance, recordkeeping and information-return obligations. Confirm the complete workflow for your business.
Put the next step into practice.
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Explore related serviceThis guide is general information, not personalized tax or legal advice. Rules and administrative policies can change. Review current guidance at Canada Revenue Agency and get advice for your circumstances.