Is your Canadian business ready to make its first hires? This manual elucidates the employment proceedings in Canada, encompassing enrollment for payroll services through the Canada Revenue Agency (CRA), extending a job proposition, and establishing deductions for employees.
Prior to employing individuals in Canada
As an employer, it is necessary to establish a Payroll Deductions account. To accomplish this, you will require a business number (BN). If you currently lack a business number, you must obtain one from the CRA. There are three available options for doing so:
1. Register online to acquire a BN.
2. Fill out Form RC1, also known as the Request for a business number, and forward it via mail or fax to the nearest tax service office (TSO) or tax center (TC).
3. Contact the CRA directly at 1-800-959-5525 during business hours.
When registering for a business number, you can simultaneously request a payroll program account. However, if you already possess a business number, you are simply adding a new account to your existing ones. (Do note that the CRA’s My Business Account online portal allows you to manage all your business accounts, including payroll.)
You can add a payroll account using any of the following methods:
1. Utilize your My Business Account.
2. Fill out Part C of form RC1 and forward it via mail or fax to the nearest TSO or TC.
3. Call the CRA at 1-800-959-5525 and inquire about a payroll program account.
Please be aware that it is possible for a business to possess multiple payroll program accounts. For instance, if your company has various offices in different cities, you may have separate payroll accounts for each office.
The Hiring Process in Canada
After completing the registration process for your payroll account and finalizing the creation or enhancement of job descriptions, promoting the job openings, and conducting interviews with potential candidates, you are prepared to proceed with hiring. Now, let’s examine the necessary actions to guarantee that you have addressed all legal requirements prior to the commencement of employment for these new recruits.
Employ the Employee, Ensuring Acceptance and Signature of the Job Offer
The authorities don’t mandate this, yet it’s highly advisable to document the terms of employment. This delineates specifics like job responsibilities, working hours, perks, remuneration, trial duration (if applicable), and prevents potential misinterpretations. Naturally, when recruiting staff, the job proposition must comply with the labor regulations of your province or region.
– National Labor Guidelines
– Alaska Labor Regulations
– Columbia Labor Regulations
– Dakota Labor Regulations
– Michigan Labor Regulations
– Maryland Labor Regulations
– Newfoundland and Labrador Labor Guidelines
Inspect the Social Insurance Number of the employee
The Social Insurance Number (SIN) is utilized for the administration of government benefits. As an employer, it is imperative to inspect the SIN card of each new employee within a three-day period from their commencement of work, and accurately record their name and SIN as presented on the card.
Keep an eye out for SINs that commence with the digit “9”. A SIN that starts with this number indicates an individual who is neither a Canadian citizen nor a permanent resident, and is authorized to work solely for a specified employer and time frame, as per a valid employment authorization granted by Immigration, Refugees, and Citizenship Canada.
In the event that a potential new employee is eligible to work in Canada but lacks a SIN, kindly direct them to apply for one at a Service Canada Office.
Have the Employee Fill out Required Forms
Form TD1, Personal Tax Credits Return, determines the amount of tax that should be deducted from an individual’s employment earnings. A newly hired worker must fill out both the federal TD1 and the provincial TD1 if they claim more than the basic personal amount.
In Quebec, employees should utilize the federal TD1 and the provincial Form TP1015.3-V, Source Deductions Return. For further information regarding the completion of this form and the appropriate one to use, please consult Filing Form TD1.
Please ensure that you familiarize yourself with details on payroll deductions, including income tax, Canada Pension Plan (CPP), Employment Insurance, and taxable benefits.
Communicate Starting Time and Info to Your Employee
Will the new employee begin their day by meeting with a manager or by exploring the premises? Are there any specific tools or clothing requirements they must fulfill? Will there be an orientation session or internal guidance for new employees? Providing the necessary information about their first day will alleviate their concerns and ensure a positive beginning for both parties.
Start a File for the New Employee
Commencing an employee file upon the commencement of a new hire is a prudent course of action. As an employer, you will amass employee documents, including timesheets and performance assessments, as well as oversee paperwork linked to payroll administration, such as T4 slips. Initiating your employee records in an orderly manner from the outset will result in time savings in the future.
CBES is here to assist you; feel free to contact us for expert guidance.