How to Register for a CRA Payroll Account

Introduction
Understanding how to register for a CRA payroll account is essential for any business hiring employees in Canada. The moment you pay salary, wages, bonuses, vacation pay or taxable benefits, you must open a payroll account and begin withholding CPP/QPP, EI/QPIP and income tax. Failing to register on time or remit deductions properly exposes employers to penalties, interest and even personal liability for directors. Québec employers face additional layers of compliance through Revenu Québec for QPP, QPIP, CNESST and HSF. Whether you are hiring your first employee or expanding your team, this guide provides clear and complete instructions on how to register for a CRA payroll account correctly.

Legal and Regulatory Framework
How to register for a CRA payroll account is governed by:

• the Income Tax Act
• the Canada Pension Plan Act
• the Employment Insurance Act
• the Business Number (BN) program
• Québec’s Taxation Act, QPP/QPIP, CNESST and HSF rules

A CRA payroll account is a program account under your Business Number (BN). When registering payroll (RP), you become responsible for:

• withholding employee income tax
• deducting CPP or QPP
• deducting EI or QPIP
• remitting employer contributions
• issuing T4 and RL-1 slips annually
• maintaining payroll books and records

Any business paying employees must know how to register for a CRA payroll account before the first paycheque is issued.

Step-by-Step: How to Register for a CRA Payroll Account

Step 1: Obtain or Confirm Your Business Number (BN)

To open a payroll account, you must have a Business Number (BN).
If you already have one—for GST/HST or corporate tax—you will use the same BN.
If not, you must register for a BN through:

• CRA My Business Account
• online business registration
• Mackisen CPA registration support

Step 2: Register for the Payroll (RP) Program Account

Your payroll account will look like this: 12345 6789 RP0001.
To register, CRA will ask for:

• business legal name
• business operating name
• business address
• type of business
• date of first employee payment
• number of employees
• payroll frequency (weekly, biweekly, semi-monthly, monthly)
• estimate of first pay amount

This information determines your initial remittance frequency.

Step 3: Understand Federal Payroll Obligations

Once the payroll account is active, you must:

• deduct federal income tax
• deduct CPP
• deduct EI
• remit payroll deductions by their deadline (monthly, quarterly, accelerated)
• maintain accurate payroll records
• issue T4 slips annually

CRA can impose penalties even for late registration, making it crucial to know how to register for a CRA payroll account before paying staff.

Step 4: Register for Québec Payroll Accounts (If Applicable)

Québec employers must register separately with Revenu Québec for:

• QPP (Québec Pension Plan) — replaces CPP
• QPIP (Québec Parental Insurance Plan) — replaces EI parental components
• HSF (Health Services Fund contributions)
• CNESST (workplace safety insurance)
• Québec income tax withholding

These are NOT automatically created when registering with CRA.
Understanding how to register for a CRA payroll account also means knowing Québec’s parallel system.

Step 5: Set Up Payroll Software or a Payroll Provider

To operate payroll efficiently, you must configure:

• payroll software (QuickBooks, Wagepoint, Ceridian, ADP)
• CRA payroll deduction tables
• Québec payroll deduction tables if applicable
• taxable benefits (car, insurance, allowances, etc.)
• vacation accruals
• statutory deductions

Setting this up correctly prevents payroll errors and reassessments.

Step 6: Start Withholding and Remitting Deductions

Employers must withhold:

• CPP/QPP
• EI/QPIP
• federal income tax
• Québec income tax
• employer contributions to CPP/QPP, EI/QPIP, HSF and CNESST

Deadlines depend on your remitter type (regular or accelerated).
Missing deadlines triggers automatic penalties.

Key Court Decisions
Courts in Canada have ruled repeatedly that:

• employers are fully liable for unremitted payroll deductions
• directors can be personally responsible for payroll failures
• ignorance of payroll rules is not a defense
• reclassifying employees as contractors does not absolve payroll obligations
• CRA estimates payroll deductions when records are incomplete
• Québec enforces QPP/QPIP obligations strictly

Understanding how to register for a CRA payroll account ensures employers avoid these costly outcomes.

Why CRA and Revenu Québec Audit Payroll Accounts
Payroll is a top audit priority because:

• payroll deductions are trust funds
• misclassification of employees is common
• many businesses under-remit payroll taxes
• employers often miscalculate CPP/EI/QPP/QPIP
• taxable benefits are frequently omitted

Audit triggers include:

• late payroll remittances
• discrepancies between T4 and RL-1 slips
• large payroll corrections
• unpaid director liabilities
• paying workers as “contractors”
• missing payroll source deductions

Knowing how to register for a CRA payroll account properly reduces audit risk from day one.

Mackisen Strategy
Mackisen CPA provides a full-service payroll compliance system:

• registering CRA payroll accounts
• registering Québec payroll accounts
• configuring payroll software
• determining correct deductions
• preparing T4s, T4As, RL-1s and RL-2s
• reconciling payroll with corporate tax returns
• supporting CRA or Revenu Québec payroll audits
• correcting past payroll mistakes through voluntary disclosures

Our approach ensures flawless compliance from the moment you learn how to register for a CRA payroll account.

Real Client Experience
Many businesses come to Mackisen after encountering payroll issues:

• A startup hired employees but forgot to register for payroll. CRA issued penalty letters. We registered accounts retroactively and corrected filings.
• A Québec employer remitted EI instead of QPIP. Revenu Québec forced payroll reconstruction. Mackisen fixed all filings and prevented penalties.
• A business misclassified several workers as contractors. CRA reclassified them and demanded payroll deductions. We negotiated reduced assessments.
• A consulting firm failed to include taxable benefits. CRA reassessed T4s. Mackisen re-issued all slips and updated payroll systems.

These examples show why businesses must understand how to register for a CRA payroll account early.

Common Questions
• Do I need a payroll account if I only pay dividends?
No—only salaries, wages or taxable benefits require a payroll account.

• Can I register payroll without a Business Number?
No—you must obtain a BN first.

• When is payroll registration required?
Before the first salary or wage is paid.

• Do remote employees follow Québec or federal rules?
They follow the rules of the province where they work.

• Do bonuses require payroll deductions?
Yes—bonuses are fully taxable.

• Are directors automatically employees?
Not always—depends on compensation structure.

Why Mackisen
With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they're entitled to. Whether you're opening your first payroll account or managing a full HR department, our expert team ensures precision, transparency and protection from audit risk. When assisting clients with how to register for a CRA payroll account, Mackisen provides full registration, payroll setup, ongoing compliance, and audit defense.