Hiring employees is an exciting milestone for any business. Whether you’re expanding, bringing on seasonal help, or hiring your first staff member, it’s important to understand your obligations as an employer—especially when it comes to the Canada Revenue Agency (CRA).
At ME Consulting Inc., we work closely with small and growing businesses to ensure they meet every requirement with confidence. Here’s what CRA expects from you in 2025 if you’re hiring.
1. Register for a CRA Payroll Account
Before you pay an employee—even once—you must register for a CRA payroll program account. This account allows you to remit source deductions, including:
- Canada Pension Plan (CPP)
- Employment Insurance (EI)
- Income tax
You can register online through your CRA My Business Account or we can assist you with setup and guidance.
2. Classify Workers Correctly: Employee vs. Contractor
One of the most common employer errors is misclassifying a worker. CRA has strict guidelines on whether a person is considered an employee or an independent contractor.
A worker is likely an employee if:
- You control their schedule, tasks, or methods
- You supply the tools or equipment
- They do not have the ability to subcontract the work
- They rely on your business as their primary or sole source of income
Misclassification can result in retroactive payroll liabilities, interest, and penalties.
3. Maintain Proper Employee Records
You are legally required to keep accurate and up-to-date employee files. At minimum, these should include:
- A signed federal and provincial TD1 form (2025)
- SIN and current address
- Job title and compensation agreement
- Start date and work schedule
- Records of hours worked, vacation accrual, and benefits (if applicable)
CRA requires employers to retain these records for six years.
4. Deduct and Remit Payroll Withholdings
As an employer, it’s your responsibility to:
- Withhold the appropriate deductions from each pay period
- Remit those deductions (CPP, EI, and income tax) to CRA on time
- Submit T4 slips and a T4 Summary to CRA by the end of February each year
Mistakes in withholding or late remittances can lead to costly penalties and interest. Working with a payroll advisor or bookkeeping team can reduce risk and streamline your process.
5. Understand and Meet Your Remittance Schedule
Your CRA remittance frequency depends on your total average monthly withholdings. Depending on your remitter type, you may need to submit:
- Monthly by the 15th of the following month
- Quarterly if you qualify as a new small employer
- Accelerated within 3 to 5 business days of payment
Don’t leave this to guesswork—if you’re unsure which schedule applies to your business, we’re here to help you determine it and stay on track.
Get Payroll-Ready with ME Consulting Inc.
Hiring is a positive step—but it’s also a legal and financial responsibility. At ME Consulting Inc., we help Alberta businesses stay compliant with payroll requirements while building strong, scalable systems for the future.
If you’re planning to hire in 2025, contact us to schedule a payroll readiness review. We’ll walk you through registration, deduction planning, and records setup—so you can grow your team with confidence.
