Who this guide is for
Founders who've registered or incorporated and now face the part nobody finds exciting: the accounts, the sales tax, and — eventually — payroll.
If you've just set up a sole proprietorship or a corporation and you're staring at terms like "BN," "RT account," "remittance," and "source deductions" wondering which apply to you and when, this is the map. It covers the four things that trip up almost every new Canadian business: the Business Number, the CRA program accounts that attach to it, how GST/HST filing actually works, and what changes the day you hire your first employee.
The numbers here are 2026 figures, and several of them — CPP, EI, the rate tables — change every January. Treat them as current-year reference, not permanent truth, and confirm against CRA before you rely on them.
One Business Number, with accounts hanging off it for each thing you owe.
Your Business Number (BN) is the spine. You add a program account to it for each obligation: an RT account when you register for GST/HST, an RP account when you run payroll, an RC account if you're a corporation paying corporate tax. Each account has its own filings and deadlines.
GST/HST is money you collect for the government and pass on — it was never yours. Payroll means withholding income tax, CPP, and EI from each paycheque, adding the employer's own share, and remitting it all on a strict schedule. Miss a payroll remittance by even a day and penalties start at 3%. The whole system is manageable once you see it as one number with a few accounts — but it rewards setting up properly and punishes winging it.
The Business Number and its accounts
The Business Number: one spine for everything
The Business Number (BN) is a nine-digit number the CRA assigns to identify your business. Think of it as your business's single point of identity with the federal government — the trunk that every tax obligation branches off.
On its own, the BN doesn't do anything. It becomes useful when you attach program accounts to it. Each account is the BN plus a two-letter code that says which program it's for, plus a four-digit reference number — fifteen characters in total. So a payroll account looks like your nine-digit BN, then RP, then 0001.
You don't register for every account up front. You add each one when you actually need it: when your sales cross the GST/HST threshold, when you hire, when you incorporate. The clean mental model is one identity, several accounts, each switched on as the obligation arrives.
A Business Number is not the same as incorporating, registering a business name, getting a municipal licence, registering for GST/HST, or opening payroll. It is the root identifier the CRA uses when those tax accounts are needed — the thread they hang on, not the things themselves.
The accounts you'll actually meet
Most new founders deal with just two or three of these. Here are the ones that matter:
GST/HST
Added when you register for GST/HST. Where you report the tax you collect and the input tax credits you claim back.
Payroll
Added when you hire. Where you remit the income tax, CPP, and EI you withhold, plus the employer's own share.
Corporate income tax
For corporations only — the account your T2 corporate return is filed against. Sole proprietors don't have one.
Information returns
For filing certain information slips (for example, T5 investment income). Many small founders never need this early on.
A sole proprietor typically has a BN with an RT (GST/HST) account and, once they hire, an RP (payroll) account — but files their business income on their personal return. A corporation has the RC (corporate tax) account on top, and adds RT and RP as needed.
GST/HST: collecting and sending it on
GST/HST: you're a collector, not an earner
The single most important shift in thinking: the GST/HST you charge is not your money. You're collecting it on the government's behalf and holding it until you remit. Founders who treat it as cash flow get a nasty surprise at filing time when the bill comes due and the money's already spent.
You're required to register once your taxable revenue passes the small-supplier threshold of $30,000 — over a single calendar quarter, or over four consecutive quarters. (That threshold, and the choice to register voluntarily earlier, is covered in the setup guide linked at the end.) Once registered, two things happen each reporting period:
- You collect GST/HST on your taxable sales and set it aside.
- You claim input tax credits (ITCs) — the GST/HST you paid on business purchases. You remit the difference: tax collected minus ITCs. If you paid more than you collected (common in early, expense-heavy periods), you get a refund.
This is why good bookkeeping pays for itself: every dollar of GST/HST you paid on legitimate business expenses is a dollar off what you owe — but only if you've tracked it.
How often you file — and by when
The CRA assigns your reporting period based on your annual taxable revenue. You can always elect to file more often (useful if you're regularly owed refunds), but not less often.
- Annual — taxable revenue of $1.5 million or less. This is the default for most new and small businesses.
- Quarterly — revenue between $1.5 million and $6 million.
- Monthly — revenue above $6 million.
The deadlines follow the period:
- Monthly and quarterly filers: file the return and pay any balance one month after the period ends.
- Annual filers (general): file and pay three months after your fiscal year-end.
- Annual filers who are sole proprietors with a December 31 year-end: a useful quirk — your return is due June 15, but any balance owing is due April 30.
If your net tax for the year was $3,000 or more, the CRA generally expects quarterly instalments the following year rather than one lump sum. And you must file a return for every reporting period even if you had no sales — a nil return is still a return. Filing has moved online for most registrants; check CRA's current filing page before assuming paper is an option.
Payroll: the day you hire
Payroll: what you withhold, and what you add
This payroll section is for employers outside Quebec. Quebec has separate QPP/QPIP and Revenu Québec rules, so Quebec employers should confirm the provincial payroll setup separately.
Hiring your first employee is the moment your admin load genuinely steps up — because now you're handling other people's money and the government's, with deadlines that don't forgive lateness. Open an RP (payroll) account on your BN before your first remittance due date — and practically, do it before the first pay run so you're not scrambling after deductions have already started.
Every pay period, you withhold three things from each employee's pay:
- Income tax — federal and provincial, based on the employee's earnings and their TD1 forms.
- CPP — Canada Pension Plan contributions (plus CPP2 on higher earnings).
- EI — Employment Insurance premiums.
Then, on top of the employee's pay, you add the employer's own share:
- CPP — matched dollar for dollar. Whatever the employee contributes, you contribute the same.
- EI — 1.4 times the employee's premium. The employer pays 40% more than the employee on EI.
You remit the withheld amounts and your employer share together to the CRA on your remittance schedule. This is the crucial budgeting truth: an employee costs you meaningfully more than their salary — your CPP match, your 1.4× EI, plus any provincial payroll costs all sit on top.
The 2026 figures, in one place
These are the current-year rates and ceilings for CPP, CPP2, and EI (for employees outside Quebec — Quebec runs its own QPIP, with different rates). They change every January; the date stamp is your reminder to re-check.
| Employee & employer rate | 5.95% each |
| Self-employed rate | 11.9% |
| First earnings ceiling (YMPE) | $74,600 |
| Basic exemption | $3,500 |
| Maximum contribution (each) | $4,230.45 |
| Employee & employer rate | 4% each |
| Earnings band | $74,600 – $85,000 |
| Second ceiling (YAMPE) | $85,000 |
| Maximum contribution (each) | $416 |
| Employee premium rate | 1.63% |
| Employer rate (1.4×) | 2.28% |
| Maximum insurable earnings | $68,900 |
| Max employee premium | $1,123.07 |
| Max employer premium (per employee) | $1,572.30 |
Figures checked June 2026 against CRA and ESDC. Rates and ceilings change every January — always download the current-year tables before running payroll. Quebec rates differ (QPIP).
What you need from a new employee
Before the first paycheque, two pieces of paperwork are non-negotiable:
- The Social Insurance Number (SIN). You must ask to see it and record it within three days of the employee starting. If a SIN begins with the digit 9, the person is not a citizen or permanent resident — you're responsible for confirming they're authorized to work, and that the authorization hasn't expired.
- The TD1 forms. Each employee completes a federal TD1 and a provincial one (in B.C., the TD1BC) — the Personal Tax Credits Return. These tell you how much income tax to withhold based on the credits the employee is entitled to.
From there you'll calculate each person's deductions using the current CRA tables or payroll software, pay them on a regular schedule, and remit. At year-end you issue each employee a T4.
Remitting on time — and the year-end reckoning
The CRA assigns you a remitter type based on your average monthly withholding over the previous two years, and it tells you which one you are by letter. New employers almost always start as regular (monthly) remitters. The schedule, in plain terms:
- Quarterly — smallest payrolls with a clean compliance record (average monthly withholding under $3,000): due the 15th of the month after each quarter.
- Regular / monthly — under $25,000: due the 15th of the month following the pay period. This is where most small employers sit.
- Accelerated — larger payrolls remit more often, up to within three business days of each pay run.
This isn't an area to be casual about. Penalties for late payroll remittances start at 3% for being one to three days late and climb to 10% past a week — plus interest. A single missed deadline on a modest payroll can cost hundreds or thousands. Set calendar reminders a few days early, especially around January and statutory holidays when due dates shift.
At year-end, by the last day of February, you file your T4 slips and the T4 Summary. Everything has to reconcile: the total CPP, EI, and income tax on your T4s must match what you actually remitted across the year (including your employer share). Mismatches trigger CRA questions. The employers with painless year-ends are the ones whose system tracked remittances in real time — not the ones reconstructing twelve months from bank statements in January.
When to stop doing this yourself
Plenty of solo founders handle GST/HST and even simple payroll themselves, especially with good software. But there are clear moments where paying a bookkeeper, an accountant, or a payroll service stops being a luxury and becomes cheaper than the mistakes.
One simple rule for when to get help: the first time you hire an employee, or the first time GST/HST instalments and reconciliations start eating real hours, that's the moment to bring in a bookkeeper or payroll service — the penalties they prevent usually cost more than they charge.
Payroll in particular is unforgiving and repetitive, which is exactly what software and professionals are good at. The cost of getting CPP, EI, or a remittance deadline wrong — repeatedly, every pay period — adds up far faster than a monthly bookkeeping fee.
If you're an immigrant founder
Two points carry over and one is new.
First, the recap: getting a Business Number and opening CRA accounts is open to you regardless of immigration status — but your own ability to actively work in and operate the business still depends on your status, which is a separate question from registering anything. If you're unsure, confirm with IRCC or an immigration professional (the setup guide covers this in more depth).
Second, the new one: when you hire, verifying work authorization becomes your responsibility as the employer. A SIN beginning with 9 signals a temporary resident — you need to confirm the person holds a valid work permit and that it hasn't expired before putting them on payroll. This applies to every employer equally; it's simply more likely to come up in newcomer-heavy networks and industries.
If you're in British Columbia
Beyond the federal accounts above, B.C. adds a few provincial layers:
- PST is separate from GST. B.C. is not an HST province, so on top of the federal GST you may need to register for and collect provincial sales tax (PST) if you sell goods (and certain services) — and PST is remitted to the province, not the CRA.
- WorkSafeBC is mandatory once you have workers. Essentially every B.C. employer with workers must register with WorkSafeBC for workers' compensation coverage — this is separate from your CRA payroll account, and it's not optional.
- Employer Health Tax (EHT) — but probably not yet. B.C.'s EHT only applies once your annual B.C. payroll exceeds $1,000,000. Below that, you owe nothing. Between $1M and $1.5M there's a phase-in rate on the amount above $1M; above $1.5M it's 1.95% on the whole payroll. Most early-stage founders are nowhere near this — but it's worth knowing the line exists so it doesn't surprise you as you grow.
Thresholds and rates checked June 2026. Always confirm current provincial figures before relying on them.
Common mistakes to avoid
- Spending collected GST/HST — treating it as revenue instead of money you're holding for the government. Set it aside the moment you collect it.
- Being even a day late on payroll remittances — the penalty starts at 3% immediately. Calendar reminders, set early.
- Misclassifying employees as "contractors" to avoid payroll. The CRA looks at the real relationship, not the label — and if it reassesses, you can owe the unremitted CPP/EI for both sides, plus penalties and interest. (This deserves its own deep dive; it's a future guide in this series.)
- Not reconciling T4s to what you remitted — any mismatch triggers a CRA assessment and a messy year-end.
- Forgetting nil returns — you must file a GST/HST return for every period, even with zero sales.
- Budgeting only for salary — the true cost of an employee includes your CPP match, 1.4× EI, and any provincial payroll costs on top.
- Ignoring the remitter-type letter — assuming your schedule never changes, when growth can move you into a more frequent category.
Official sources
Verify anything rate- or deadline-related — the figures above change annually. These are the primary government sources behind this guide.
Business Number and program accountsCRA
What the BN is, and how GST/HST, payroll, and corporate-tax accounts attach to it.
canada.ca/en/services/taxes/business-number.htmlGST/HST — reporting periods & deadlinesCRA
Assigned reporting periods, filing and payment due dates, and instalment rules.
canada.ca/.../file-gst-hst-return/reporting-requirements-deadlines.htmlPayroll — deductions and contributionsCRA
How to set up payroll, calculate CPP/EI/income tax, and meet your obligations.
canada.ca/.../businesses/topics/payroll.htmlCPP contribution rates, maximums & exemptionsCRA
The current-year CPP and CPP2 rates, ceilings, and maximum contributions.
canada.ca/.../canada-pension-plan-cpp/cpp-contribution-rates-maximums-exemptions.htmlEI premium rates and maximumsCRA
The current-year EI employee and employer premium rates and maximum insurable earnings.
canada.ca/.../employment-insurance-ei/ei-premium-rates-maximums.htmlRemitting payroll deductions — types & due datesCRA
Remitter types, how the CRA assigns yours, and when each must remit.
canada.ca/.../payroll/remitting-source-deductions.htmlEmployer Health TaxGov. of B.C.
B.C.'s payroll tax — exemption threshold, rates, registration, and filing.
gov.bc.ca/.../taxes/employer-health-taxWorkSafeBC — register your businessWorkSafeBC
Mandatory workers' compensation registration for B.C. employers with workers.
worksafebc.com/en/insurance/need-coverageSave this: the accounts & payroll readiness checklist
Tick these as you set up. Anything you can't tick is your next task — or the signal to bring in a bookkeeper.
A note on this guide. This is educational information about how Canadian business accounts, GST/HST, and payroll work — not legal, tax, accounting, or financial advice, and not a substitute for it. The 2026 rates and thresholds here change at least annually, and your obligations depend on your structure, revenue, employees, and province. Confirm current figures with the official sources above, and work with a CPA, bookkeeper, or payroll professional for your specific situation. Last reviewed June 2026.
Comments