Payroll & Accounting Setup for Canadian Businesses
Understanding source deductions, CRA payroll accounts, and business banking requirements.
Legal & Regulatory Definition
"Employers must deduct Canada Pension Plan (CPP), Employment Insurance (EI), and income tax from employee wages and remit them monthly to the CRA."
Expat Compliance Analysis
Once you hire your first employee (including yourself if paying a salary from a corporation), you must open a Payroll Program Account (RP) with the CRA. You must calculate source deductions accurately. Corporate accounting requires clear separation of personal and business funds.
Actionable Requirements & Steps
EI & CPP Employer Match
Employers must match employee CPP contributions 100% and pay 1.4 times the employee's EI premium amount.
T4 Slip Issuance
Every calendar year, you must issue a T4 slip to each employee and file a T4 Summary with the CRA by the last day of February.
Immigration Warnings
All self-employment operations must strictly respect your study or work permit limits. Active corporate involvement without a work permit is a violation of section 196 of the Immigration and Refugee Protection Regulations (IRPR).
Legal Disclaimer
This portal is for educational purposes. Expat corporate structures carry tax and visa risks. Consult a licensed Canadian corporate lawyer or Chartered Professional Accountant (CPA) before registering.