Hiring your first employee is a huge step. And while making these moves for your business is exciting, there are some housekeeping matters you need to tend to before you get started. 

4 Things You Should Know Before You Hire Your First Employee

Hiring your first employee is a huge step. And while making these moves for your business is exciting, there are some housekeeping matters you need to tend to before you get started. 

As you consider how your new employee fits into your business’s overall plans, you’ll need to be aware of your new responsibilities as well. 

Here are four things you need to think about before you hire your first employee. 

Register for a payroll account with the CRA 

Before you hire your first employee, you’ll need to open a payroll account with the Canada Revenue Agency.  

The payroll account is assigned to your organization using your existing business number. You’ll need to withhold and remit to the CRA for certain deductions, like:  

  • Canada Pension Plan (CPP) 
  • Employment Insurance (EI) 
  • Federal, provincial or territorial taxes 

You’ll need to open a payroll account before the first remittance due date, which is typically the 15th day of the month following the month deductions begin. You’ll also need to calculate the required deductions each pay cycle, so you don’t run into any surprises at the end of the year.  

Don’t have a business number yet? You can get one in a few ways:   

If you’re registering for a business number, you can also open a payroll account at the same time.  

Keep in mind that the process may look a little different if your business is physically located in Quebec. As Revenu Québec usually administers taxes on income, you’ll have to file your returns with Revenu Québec. Check the Revenu Québec website for more details.  

Get to know your local labour laws 

There are two levels of labour laws you’ll also need to familiarize yourself with: Federal labour standards, and provincial or territorial labour laws.  

Labour laws might vary between provinces and territories, but they all provide guidelines on a number of employment issues such as: 

  • Employment conditions, like hours of work, overtime pay, minimum wage, vacations, and even notices of termination 
  • Occupational health and safety; you may need additional policies and training depending on your business and provincial legislation, even before you hire your first employee 
  • Recruitment and selection processes that are inclusive, fair, and aimed toward hiring the most qualified candidate 

Depending on the type of industry you work in, you may have more federal guidelines to follow.   

Familiarize yourself with the standards for employees in your province or territory and plan accordingly: as an employer, you’ll be responsible for your new employee’s working conditions. You want to ensure that you’re providing your new employee with a healthy working environment conducive to success.      

What kind of employee should you hire first? 

Making that shift from owner to employer, you’ll need to think strategically about your new employee’s role. 

Start by imagining the job description you would write for your new employee. What would their daily responsibilities be? What skills would they need to have? Be specific; you should have a clear idea of what this person will help you accomplish. 

Will your new employee be bringing new skills to the organization? Or will they help free up your time in order to take on new clients, or explore new marketing opportunities? Be clear with your intentions before you begin hiring; it will be immensely helpful later on when you start recruiting. 

Take the time to consider your long-term needs for an employee as well. Do you need someone full-time, or just someone to help with a temporary spike in demand? This will help you determine the full scope of the job and what it will entail.  

Setting up for your new employees 

So you’ve found the perfect employee for your business and its growing needs. 

However, before you can officially hire somebody, they’ll need to fill out some paperwork: a TD1 form, and an employment agreement. 

Employees in Canada are hired with either verbal or written agreements. Generally, a written agreement is ideal, as it maintains a record of what you and your employee have agreed upon regarding job duties, responsibilities, and benefits.  

Your new employee will also need to fill out form TD1, Personal Tax Credits Return, to determine how much tax needs to be deducted. (Or, if you’re hiring in Quebec, you’ll need to use the federal TD1 form, and the provincial TP1015.3-V form. Check the CRA for more details on filing a TD1 form.)  

Further down the road, you’ll want to start thinking about a comprehensive management system as you continue to expand your team. 

Gaining new employees can present a wealth of new responsibilities for a growing business. Managing your employees and their payroll can be taxing; an all-in-one management system not only lessens this load, it also allows you to focus your attention where it matters most. 

If you’re looking for a comprehensive system to meet your growing needs as a business, we have you covered. Get started with your own PAYEVO account in under 5 minutes

Finding a system that fits your needs can not only save you a massive headache down the road, it can also position your business for optimal productivity and success.  

Now that you understand the key things to consider before hiring your first employee, it’s time to advertise for this exciting new role. Stay tuned for the next instalment in our series where we give you our best tips for writing an effective job post.