Payroll in Canada: Source Deductions, Remittance Deadlines and Employer Obligations

Running payroll in Canada means doing three things correctly and on time, including utilizing payroll management services:

• deducting the right amounts from each paycheque
• remitting them to CRA by your due date
• reporting the year on T4 and T4A slips

This guide covers each step for employers in Ontario, with the CRA figures for 2026.

Before your first payroll

1. Business number and payroll program account. CRA says you have to register for a payroll program account before the first remittance due date. (Source: CRA – Remit (pay) payroll deductions and contributions; CRA – Open or manage a payroll account)
2. How to register. CRA lists Business Registration Online for Canadian resident businesses. (Source: CRA – How to register)
3. For each new employee: get the social insurance number, collect completed federal and provincial TD1 forms, and determine the province of employment. (Source: CRA – Set up and manage employee payroll information)

Do not email banking credentials or passwords. For SINs, employee tax information, and full tax slips, contact us first for instructions on the safest way to send documents.

Before-your-first-payroll checklist

• Business number
• Payroll program account opened before the first remittance due date
• Pay frequency chosen
• Each employee’s SIN collected
• Federal and Ontario TD1 forms collected
• Province of employment confirmed
• Payroll system set up with an employer-controlled connected bank account
• First remittance due date noted

Free downloadable template. The Payroll New-Client Setup Checklist (PDF) lists the information and steps needed before a first payroll. The Payroll New-Client Information Sheet (XLSX) is a place to organize employer and pay-schedule details before setup. Download the Payroll New-Client Setup Checklist (PDF) · Download the Payroll New-Client Information Sheet (XLSX). No email address required.

This template helps organize records. It does not determine eligibility, deductions, tax owing, or filing requirements.

What you deduct from each paycheque

For most employees, you withhold three things:

• Income tax, federal and provincial, based on the employee’s pay and TD1 claim amounts.
• Canada Pension Plan (CPP) contributions. For 2026:
  • the rate is 5.95% on earnings between the $3,500 basic exemption and the $74,600 maximum;
  • the maximum employee contribution is $4,230.45;
  • a second contribution (CPP2) of 4% applies to earnings between $74,600 and $85,000, up to $416.
• Employment Insurance (EI) premiums. For 2026, the employee rate is 1.63% of insurable earnings up to $68,900, a maximum of $1,123.07.

What you pay as the employer

On top of what you withhold, you owe your own share:

• CPP: you contribute the same amount as the employee, up to $4,230.45 per employee for 2026 (plus the matching CPP2 amount).
• EI: you pay 1.4 times the employee’s premium, up to $1,572.30 per employee for 2026.

Budget for these costs. They are part of what an employee costs you, beyond gross pay.

When to remit source deductions

CRA assigns you a remitter type based on your average monthly withholding, and that sets your due dates:

Remitter type	Due date
Regular	The 15th of the month after you paid employees
Quarterly (eligible small employers)	April 15, July 15, October 15 and January 15
Accelerated, threshold 1	Twice a month (the 25th, and the 10th of the next month)
Accelerated, threshold 2	Up to four times a month

You can remit more often than required, but CRA won’t change your remitter type because of it. If you have no employees in a period, report a nil remittance by your due date. Late or missed remittances can lead to penalties and interest, so treat remittance dates as fixed as payday.

Year-end: T4 and T4A slips

After December 31, every employer must report the year:

• T4 slips and T4 Summary: file with CRA and give employees their slips by the last day of February. When that day falls on a weekend or public holiday, the T4 return is due the next business day. For 2026 slips, that is Monday, March 1, 2027.
• T4A slips and T4A Summary: for amounts such as pensions and certain other payments. File and give recipients their slips by the last day of February.

If you don’t give an employee their T4 slip on time, CRA may charge a penalty of $25 per day per slip, with a minimum of $100 and a maximum of $2,500. Our T4 and ROE year-end payroll checklist lists the steps.

A good year-end habit: reconcile the year’s payroll records against your remittances before you prepare slips. Our year-end bookkeeping checklist walks through it.

Records of Employment (ROEs)

• When an ROE is needed: an interruption of earnings. The guide defines this as 7 consecutive calendar days without work and insurable earnings, among other situations described in the guide.
• Electronic ROE deadline for weekly, biweekly and semi-monthly pay periods: 5 calendar days after the end of the pay period in which the interruption occurs.
• Monthly or 13-pay-period employers: whichever comes first, 5 days after the end of the pay period or 15 days after the first day of the interruption.
• Paper ROE deadline: within 5 calendar days of the first day of the interruption.
• Ways to submit: ROE Web, or Secure Automated Transfer through payroll software or a provider.
• Keep payroll records related to ROEs for 6 years after the year they relate to.

Source: Service Canada – How to complete the record of employment (ROE) form

Records you must keep

Keep payroll records, paper and electronic, for at least six years after the year they relate to. That includes timesheets, pay records, TD1 forms, remittance confirmations and copies of slips.

Employee or contractor?

Whether someone is an employee or a self-employed contractor decides whether you deduct CPP, EI and tax at all. It depends on the working relationship, not on what the contract calls it. CRA publishes guidance on determining the relationship. If you’re unsure, get advice before the first payday rather than after year-end.

Other key dates

Payroll is one of several deadlines a small business juggles. See our Canadian tax deadlines guide for GST/HST, corporate tax and personal filing dates in one place.

Getting payroll handled

If you’d rather not run payroll yourself, we can set up your payroll account, calculate deductions each pay period, remit on time and prepare your T4s. Call (437) 410-7999.

Toronto Tax & Accounting Solutions assists with opening CRA payroll and GST/HST accounts. Payroll is prepared and run through a payroll system using an employer-controlled connected bank account. T4 and ROE preparation is included for businesses with 5 or more employees; for businesses with 1–4 employees it is charged separately, with the fee agreed first. Payroll setup is a one-time $100 fee before HST, followed by monthly per-employee processing fees.

Sources: Canada Revenue Agency — CPP contribution rates, maximums and exemptions; EI premium rates and maximums; When to remit (pay); RC4120 Employers’ Guide – Filing the T4 Slip and Summary; RC4157 T4A guide.

Official sources

• CRA – Remit (pay) payroll deductions and contributions
• CRA – Open or manage a payroll account
• CRA – How to register
• CRA – Set up and manage employee payroll information
• Service Canada – How to complete the record of employment (ROE) form
• CRA – When to remit (pay)
• CRA – When to file information returns

Running a small business? See our small business accounting packages.