Hiring Your First Employee in Canada

Who this guide is for

Founders making their first hire — the genuine employee kind, not a contractor — and wanting to do it properly the first time.

Hiring is a step-change in obligation: you're now responsible for payroll deductions, workplace insurance, and a floor of employment rights set by law. None of it is hard once you see the order. The figures and B.C. rules here are current as of 2026 (B.C.'s minimum wage changed on June 1, 2026); rates and rules change, so confirm the current ones with the CRA, WorkSafeBC, and B.C. Employment Standards.

Get two things straight first

• Confirm it's actually an employee. If the role has set hours, your direction, your tools, and no other clients, it's employment, and calling it contracting to skip payroll is the misclassification trap (covered in its own guide). Hiring properly starts with naming the relationship correctly.
• Set pay at or above the minimum wage. In B.C., the general minimum wage is $18.25 per hour, effective June 1, 2026 (it rises with inflation every June 1). There's no lower wage for tipped staff, and tips don't count toward it. This applies whether you pay hourly, salary, or commission: earnings must still meet the minimum.

The offer letter

A written offer letter (or employment agreement) protects both sides by setting expectations clearly. At minimum it should cover:

• Role and reporting — title, duties, who they report to.
• Compensation — wage or salary, pay frequency, and any bonus or benefits.
• Start date and hours — full-time or part-time, expected schedule.
• Probation, if any, and what it means.
• Termination — how the relationship can end, written to at least meet employment-standards notice (a clause that tries to give less than the legal minimum is unenforceable).
• Confidentiality / IP terms if relevant to your business.

Two registrations to do before you pay anyone

• Open a payroll (RP) program account with the CRA, under your business number, before your first remittance. This is the account you'll remit CPP, EI, and income tax through. (Setting up your BN and CRA program accounts is covered in the CRA-accounts guide.)
• Register with WorkSafeBC before the worker starts, ideally about 30 days ahead. If you hire and pay workers in B.C. — full-time, part-time, casual, or even some contractors — you're required to register for workers' compensation coverage; WorkSafeBC recommends applying about 30 days before you start the business or hire a worker, to allow processing time. This is separate from CRA payroll and is not optional for B.C. employers with workers.
• Note the B.C. Employer Health Tax (EHT) — you only register and pay if your annual B.C. payroll exceeds the exemption (currently $1 million for most employers, higher for charities and non-profits), so most first-time, single-employee businesses won't owe it yet.

What to collect on the first day

• Social Insurance Number (SIN). You must see it and record it within three days of the employee starting. A SIN beginning with 9 indicates a temporary resident: check that their work permit is valid and covers the job, and note the expiry.
• TD1 forms. Have them complete the federal TD1 and the provincial TD1 (TD1BC) so you withhold the right amount of income tax. Keep these on file; you don't send them to the CRA.
• Banking details for direct deposit, plus their address and an emergency contact.
• Workplace orientation. Walk them through health-and-safety basics and any workplace policies — as an employer you have occupational health-and-safety duties under WorkSafeBC from day one.

Running payroll, pay period after pay period

Each time you pay your employee, you withhold and remit source deductions: their CPP contributions, EI premiums, and income tax. The 2026 employee rates are CPP at 5.95% (with the employer matching) and EI at 1.63% for the employee and 2.28% for the employer, up to each year's maximums; the full figures and thresholds are in the CRA-accounts guide. Then:

• Remit to the CRA on your schedule: a new (regular) remitter generally pays by the 15th of the month after the month you paid wages.
• Pay at least twice a month, within eight days of the end of each pay period (pay periods can't exceed 16 days in B.C.).
• Give a written pay statement each pay day showing hours, wage, deductions, and how pay was calculated.
• Keep records — payroll, hours, and the forms above — in case of a CRA or Employment Standards review.

For your first hire, a payroll software product or an accountant/bookkeeper handling remittances is usually worth it: late or missed remittances carry penalties from the start.

The B.C. employment-standards floor

The Employment Standards Act sets minimums you must meet regardless of what an offer letter says. The key ones:

Vacation pay accrues as wages are earned and can't be wiped out by a "use it or lose it" policy; any earned, unpaid vacation pay must be paid out when employment ends.

Year-end, and when employment ends

• T4 slips. Each year you file a T4 for the employee and give them a copy by the last day of February following the calendar year; if that day falls on a weekend or holiday, the deadline moves to the next business day. For 2025 slips, the due date was March 2, 2026 (February 28, 2026 is a Saturday).
• WorkSafeBC reporting. You'll report payroll and pay premiums quarterly or annually, with an annual payroll report due in early March, separate from your CRA filings.
• Record of Employment (ROE). When the employee stops working or has an interruption in earnings, you must issue an ROE (filed with Service Canada) so they can access EI if eligible. For electronic ROEs, the deadline is generally five calendar days after the end of the pay period in which the interruption of earnings occurs; paper ROEs can have different timing, so check Service Canada's ROE guide.
• Final pay. When employment ends, B.C. requires final wages within 48 hours if you terminate the employee, and within 6 days if the employee quits.

When to get help

A simple split: use a payroll provider or bookkeeper for the recurring mechanics (deductions, remittances, T4s) so you never miss a remittance, and an employment lawyer for the offer letter and anything to do with discipline or termination, where the costly mistakes live. WorkSafeBC and B.C. Employment Standards both have employer help lines worth calling when you're unsure.

Common mistakes to avoid

Official sources

Hiring spans federal payroll and B.C. workplace law; confirm both, and note rates change.