How to Open a Canada Revenue Agency Payroll Program Account

▤ Summary

You will use that payroll program account number every time you calculate, remit and deduct from employees’ remuneration. With or without a payroll program account, if you pay employees, you need to calculate deductions and remit them by the due date. Before you can set up your payroll program 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) • payroll service name (if any) • country in which the parent company or affiliate is headquartered if you have a foreign-owned corporation • name of franchisor (if any) • country in which the franchisor’s head office is located (if applicable) To set up new employees, employers need to: • employees without a SIN must apply for it and provide it to the employer within three days of receiving the Social Insurance Number • employers must inform Service Canada within six days of the employee not providing a SIN • an employee who is not a Canadian citizen or permanent resident of Canada will have a SIN that starts with the number 9: • make sure the person has a valid work permit • confirm the SIN has not expired • if the SIN does 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 determines the amount of tax to be deducted from an individual’s employment income, or other income, such as pension income • as the employer, you keep the completed forms with employees’ records – do NOT send the TD1 forms to the CRA What is a T4 Summary and a T4 Slip? • the year in which the income was earned • the employee’s name, address and Social Insurance Number • salary, wages (including pay in lieu of termination notice), tips or gratuities, bonuses, vacation pay, employment commissions, gross and insurable earnings of self-employed fishers, and all other remuneration (see Box 14 – Employment income for a detailed list) you paid to employees during the year • pension adjustment (PA) amounts for employees who accrued a benefit for the year under your registered pension plan (RPP) or deferred profit-sharing plan (DPSP) • the CPP and QPP contributions, EI premiums and income tax deducted from the pay Income must be reported on a T4 slip for the year in which it was paid – no matter when the employee did the work. CRA also provides these tips on how to fill out T4 slips: • fill out the slips clearly and accurately • make sure the employee’s name and SIN are correct (errors may affect the employees’ earnings history and subsequently their Canada Pension Plan or Quebec Pension Plan benefits) • report, in dollars and cents, all amounts you paid during the year, except pension adjustment amounts, which are reported in dollars only • report all amounts in Canadian dollars, even if they were paid in another currency.

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