The CRA payroll account is a crucial tool for business owners in Canada who want to pay employees or themselves.
Business owners need to register for a payroll account to deduct and submit their payroll remittances to the Canadian Revenue Agency.
Thankfully, our team of payroll experts here at PayEvo made it easy to set up and register for a payroll account.
Let’s walk you through the steps to find your payroll account number.
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Why and When You Need a CRA Payroll Account
You need a CRA payroll account or account number if you:
- Pay salaries, wages (including advances), bonuses, vacation pay or tips to employees, or,
- Provide certain taxable benefits to employees
You have to register for a CRA payroll account before your first remittance due date. That’s typically the 15th day of the month after the month you make deductions from your employee’s pay.
You will use that CRA payroll account number every time you calculate, remit and deduct from employees’ pay.
What is a CRA Payroll Account?
If you’re an employer, individual, trustee, or organization that pays employees, you’ll get a unique CRA payroll account number. Think of it as your business’s ID card for all things payroll with the CRA.
The 15-character CRA payroll account number includes:
- The nine-digit Business Number (BN)
- The BN is a unique federal government numbering system that identifies your business and the accounts you maintain
- a two-letter code for the type of program (for a payroll program, the letters are “RP”)
- a four-digit reference number to identify each account in any program your business may have
- Depending on the type of business, you may need to register other types of program accounts
- The BN stays the same – CRA will add letters or reference numbers to your BN
As an employer and a business, your company needs a GST/HST, an import/export and potentially requires multiple program accounts.
Here’s an example of one company’s different program account numbers:
How and What You Need to Open a Payroll Account
Before opening your CRA payroll account, you will need your Business Number (BN). It’s like the golden ticket, making your whole payroll setup a breeze. This number is crucial for setting up payroll and it identifies your business to the Canada Revenue Agency (CRA). If you’re wondering how to get a payroll number, these are the essential steps.
Before you can set up your CRA payroll account, you also need to have the following information:
- The date your employees received their first wages (you can leave the field blank if you don’t know the date)
- Months covered for the payroll of employees’ wages
- The pay period frequency (e.g. weekly, bi-weekly or monthly)
- Number of employees
- Payroll service name (if any)
- If you have a foreign-owned corporation, identify the country where the parent company or affiliate has its headquarters.
- Name of the franchisor (if any)
- If applicable, identify the location of the head office.
To set up new employees, employers need to:
- Obtain your employee’s social insurance number (SIN)
- Employees who don’t have a Social Insurance Number (SIN) must apply for one. Once they receive it, they should give it to their employer within three days.
- Employers must inform Service Canada within six days of the employee not providing a SIN
- If an employee isn’t a Canadian citizen or permanent resident, their Social Insurance Number (SIN) will start with the number 9.
- Make sure the person has a valid work permit
- Confirm the SIN has not expired
- If the SIN does not have an expiry date – it is not valid
- Get a completed (filled out) Form TD1, Personal Tax Credits Return from the employee
- The TD1 Personal Tax Credits Return calculates the tax deductions from an employee’s paycheque or pension.
- As the employer, you keep the completed forms with employees’ records – do NOT send the TD1 forms to the CRA
Exploring the T4 Summary and T4 Slip
Each employer needs to fill out a T4 Summary or T4SUM for every CRA payroll account they have. This form adds the money given to employees and the company’s payments to CPP and EI.
As an employer, you enter your 15-character CRA payroll account number in the “Employer’s account number” box at the top.
You also need to enter your operating or trade name and address below the CRA payroll account number.
Always report amounts in Canadian dollars and cents, even if you paid your employees in a different currency. You’ll find the Bank of Canada’s average exchange rates here.
If you file your return digitally, go to Filing Information Returns Digitally (T4/T5 and other types of returns).
If you’re filing with paper forms, use the T4 Summary to report the total amounts from the individual T4 slips.
Employers issue T4 slips to indicate annual earnings and deductions to both employees and the CRA.
Every year, employers must give a T4 slip to any employee who qualifies for one:
- Earns over $500
- Had CPP/QPP contributions
- Paid EI premiums
- Paid PPIP/CPIP premiums
- Had income tax deducted.
Employers must complete T4 slips in a PDF or PDF fillable/saveable format. You can make photocopies of the completed slips to distribute to your employees. These can be XML as well for submission to CRA.
Employers that file digitally using Web Forms, the Canada Revenue Agency’s secure Internet filing website, have an advantage. The Web Forms app will automatically prepare T4 slips for employees.
Employers have until the end of February to give employees a copy of their respective T4 slips.
T4 slips should include:
- The employer name
- The year you earned the income
- The employee’s name, address and Social Insurance Number
- The money you paid to employees during the year including salary, wages, tips, bonuses, vacation pay, and commissions. It also covers payments like termination pay and earnings for self-employed fishers.
- Taxable benefits or allowances
- Pension adjustment amounts apply to employees who gained benefits in the year from your registered pension plan or profit-sharing plan.
- Retiring allowances
- The CPP and QPP contributions, EI premiums and income tax deducted from the pay
You put income on a T4 slip for the year you pay it, not when the work happened. For example, if you pay in January for work done last December, that money appears on this year’s T4.
CRA also provides these tips on how to fill out T4 slips:
- Fill out the slips clearly and accurately
- Double-check that the employee’s name and Social Insurance Number are right. Mistakes could mess up their future pension benefits.
- Report all payments made during the year in both dollars and cents, except for pension adjustment amounts. Report pension adjustment amounts in whole dollars only.
- Report all amounts in Canadian dollars, even if you paid them in a different currency. To get the average exchange rates, go to What are the average exchange rates?
- Do not enter hyphens or dashes between numbers
- Do not enter the dollar sign ($)
- Avoid using negative dollar amounts on slips. To correct past years, send updated slips to the CRA for those specific years. See Amending or cancelling slips over the Internet
- If you do not have to enter an amount in a box, do not enter “nil;” leave the box blank
- Do not change the headings of any of the boxes
If you need a payroll system that simplifies tasks like automatic pay slips and T4s, consider our signature cloud payroll software.
Frequently Asked Questions
What is a CRA payroll account?
Imagine a 15-character code that’s as unique to your Canadian business as your fingerprint. That’s your CRA payroll account! You can use it to identify your business to the CRA and handle payroll deductions and remittances.
Why do I need a CRA payroll account?
If you pay salaries, wages, bonuses or provide taxable benefits to employees, you must register for a CRA payroll account. It helps you comply with Canadian tax laws and avoid penalties If you’re hiring employees.
How do I open a CRA payroll account?
Opening a CRA payroll account is a simple process.
You’ll need your business information like your employees’ pay details, how often you pay them, and other business-specific information. Also, keep personal information on hand to validate your business.
What is the T4 summary and T4 slip?
The T4 Summary totals what you pay employees. The T4 Slip shows each employee’s pay and deductions. Both are essential for tax reporting.
Can I file my T4 summary digitally?
Yes! You can file your T4 Summary digitally through the CRA’s secure filing site, exported directly from PayEvo.
What happens if I don’t remit by the due date?
Failure to remit deductions by the due date may result in penalties. It’s crucial to adhere to the deadlines to avoid unnecessary fines.
Can I use a payroll solution to manage my CRA payroll account?
Absolutely — PayEvo payroll streamlines your payroll needs, including automating pay slips, T4s and more.
How do I make sure the SIN of an employee is valid?
First, verify that the SIN has not expired. If the employee is not a Canadian citizen or permanent resident, confirm they have a valid work permit.
What if I pay employees in a different currency?
Always report amounts in Canadian dollars and cents, even if you paid in a different currency. You can find the Bank of Canada’s average exchange rates online.
Where can I find more information about CRA payroll accounts?
For more help and rules, you can check the Canada Revenue Agency’s official website, or consult with a Canadian tax professional.
Looking to dive deeper into the world of CRA payroll accounts and payroll management? You’re in the right place! Below are some handpicked resources to help you become a payroll pro.
1. CRA Official Website
For the most accurate and up-to-date information, the Canada Revenue Agency’s official website is your go-to source. Find detailed guides, forms, and FAQs on payroll accounts.
2. PayEvo Blog
Check out our PayEvo Blog for more articles on payroll management, tax tips, and business growth strategies. Our experts break down complex topics into easy-to-understand articles.
3. Social Media Updates
4. Canadian Payroll Association Resources
The Canadian Payroll Association offers a wealth of resources, including certification programs and networking events. Highly recommended for anyone serious about payroll.
5. Bank of Canada Exchange Rates
If you’re dealing with international payments, the Bank of Canada’s average exchange rates can be a lifesaver. Always report in Canadian dollars!