Requirements for opening a payroll account with the CRA in Canada in 2026

If you hire employees in Canada and pay them a salary, wages, tips, bonuses or other remuneration, you are legally required to open a payroll deductions account with the Canada Revenue Agency (CRA). This account — identified by a 15-character Business Number ending in the letters RP — allows you to remit income tax deductions, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums on behalf of your employees.

The process is straightforward, but it must be completed before or within the first payroll run. Missing the registration deadline can result in penalties and interest charges. This guide explains exactly what information and documents you need, how to register, and what to expect once your account is open.

What this procedure is and what it’s for

A payroll deductions account (also called an RP account) is a sub-account attached to your Business Number (BN) issued by the Canada Revenue Agency (CRA). It is the mechanism through which Canadian employers collect and remit three mandatory payroll deductions to the federal government:

• Income tax withheld from employee pay
• Canada Pension Plan (CPP) contributions (both employee and employer portions)
• Employment Insurance (EI) premiums (both employee and employer portions)

Who needs to register

You must open a payroll account if you are:

• A business, corporation, partnership, non-profit or individual who pays employees
• A new employer hiring your first employee
• An existing business that previously had no employees but is now taking on staff
• A foreign employer with employees working in Canada

The procedure does not apply to self-employed contractors who invoice for their services — only to situations where a true employer-employee relationship exists under the Canada Revenue Agency’s guidelines.

Official body responsible

The Canada Revenue Agency (CRA) is the federal body responsible for payroll account registration and administration. The CRA operates under the authority of the Income Tax Act, the Canada Pension Plan Act, and the Employment Insurance Act.

Documents and information required

Unlike many government procedures, opening a CRA payroll account does not require you to upload scanned documents. Instead, the CRA collects specific information that you must have ready before you begin. Gather the following before starting your registration:

Business identification

• Your 9-digit Business Number (BN) — if you already have one from a GST/HST, corporate income tax or import/export account. If you do not yet have a BN, the CRA will assign one during registration.
• Legal name of the business or individual exactly as it appears on your incorporation certificate, partnership agreement, or government-issued ID
• Business mailing address and physical address (province/territory, postal code)
• Business phone number

Owner or authorized representative information

• Full legal name of the owner, director, or officer signing the registration
• Social Insurance Number (SIN) of the owner or principal officer (required for sole proprietors and some partnerships)
• Date of birth of the owner or principal officer
• Personal address of the owner or principal officer

Payroll-specific details

• Date you expect to pay your first employee (this determines your remittance schedule)
• Estimated number of employees you will pay
• Estimated annual payroll (total remuneration you expect to pay in the calendar year)
• Pay frequency (weekly, bi-weekly, semi-monthly, monthly, etc.)
• Type of employees (regular, seasonal, part-time)

If registering by mail or phone

If you cannot register online, you will need to complete Form RC1 — Request for a Business Number and Certain Program Accounts. This form is available on the CRA website and must be mailed or faxed to your regional tax centre. No original documents need to be certified or notarized for a standard payroll account registration.

Steps to complete the procedure

There are three ways to register a payroll account with the CRA. Online registration is the fastest and most common method.

Option 1 — Online via My Business Account or Business Registration Online (recommended)

1. Go to Business Registration Online (BRO) on the CRA website.
2. If you already have a CRA My Business Account, log in and select “Register a new account” under your existing BN.
3. If you do not have a BN, select “Register for a Business Number” — the system will assign a BN and allow you to add the payroll (RP) account in the same session.
4. Select “Payroll deductions (RP)” as the program account type.
5. Enter all required business and payroll information (see the Documents and information required section above).
6. Review and submit. Your RP account number is issued immediately upon completion.
7. Note your full account number (format: 123456789 RP 0001) — you will need it for every remittance.

Option 2 — By phone

1. Call the CRA Business Enquiries line at 1-800-959-5525 (English) or 1-800-959-7775 (French).
2. Have all business and payroll information ready before calling.
3. A CRA agent will register the account during the call and provide your RP account number verbally and by mail.
4. Estimated call time: 20–45 minutes depending on wait times.

Option 3 — By mail or fax

1. Download and complete Form RC1 from the CRA website.
2. Mail or fax the completed form to your regional CRA tax centre (the address is listed on the form based on your province or territory).
3. Processing time by mail is typically 4–6 weeks.

No appointment required

No in-person appointment is needed for any of the three registration methods. Online and phone registrations do not require a visit to a CRA office.

When to register

You must register before or on the date of your first payroll. The CRA recommends registering at least a few business days before your first pay date to allow time to set up remittance arrangements with your financial institution.

Fees and timelines

• Registration fee: There is no fee to open a CRA payroll account. Registration is free.
• Processing time (online): Immediate — your RP account number is issued during the online session.
• Processing time (by phone): Same day in most cases; confirmation letter arrives by mail within 2–4 weeks.
• Processing time (by mail/fax): Approximately 4–6 weeks from the date the CRA receives your form.
• Account validity: A payroll account remains open indefinitely. You must formally close it with the CRA if you stop paying employees.
• First remittance deadline: Your first payroll remittance is due based on your assigned remitter type (new employers are typically classified as regular remitters, meaning remittances are due by the 15th of the month following the month in which deductions were withheld).
• Penalties for late registration or remittance: The CRA charges a penalty of 3%–10% of the amount owing, depending on how late the remittance is, plus daily compound interest.

Common mistakes and how to avoid them

• Registering after the first payroll has already been processed. The CRA requires registration before or on the date of the first pay. Registering late can trigger penalties. Set a reminder to register as soon as you know you will be hiring.
• Using the wrong legal name. The business name entered must match exactly what is on your incorporation documents or CRA records. A mismatch can delay account activation or cause remittances to be misapplied.
• Underestimating the annual payroll. The estimated payroll figure affects your remitter type and remittance schedule. While estimates are acceptable at registration, significant underestimates can lead to an incorrect remitter classification and unexpected deadlines.
• Failing to close the account when employees leave. If you stop paying employees permanently, you must notify the CRA to close the RP account. Leaving it open can result in nil remittance filing requirements and administrative penalties for missed filings.
• Confusing the RP account with other CRA program accounts. Your Business Number can have multiple sub-accounts (RT for GST/HST, RC for corporate income tax, RP for payroll). Always use the correct RP account number when submitting payroll remittances to avoid misallocation of funds.

Frequently asked questions

Do I need a Business Number before I can open a payroll account? You do not need to obtain a Business Number separately first. If you do not already have one, the CRA’s Business Registration Online system will assign a BN and create your payroll (RP) account in a single session.

I am a sole proprietor with one part-time employee. Do I still need to register? Yes. Even if you have only one employee working part-time, you are required to deduct and remit income tax, CPP contributions, and EI premiums, and you must have an active RP account to do so.

Can I use one payroll account for employees in multiple provinces? Yes. A single federal RP account covers employees across all provinces and territories. However, if you have employees in Quebec, note that Quebec administers its own provincial income tax and Quebec Pension Plan (QPP) through Revenu Québec — you will need to register separately with Revenu Québec for those provincial deductions.

What is a remitter type and how does it affect me? Your remitter type determines how often you must send payroll deductions to the CRA. New employers are generally classified as regular remitters (due by the 15th of the following month). As your payroll grows, the CRA may reclassify you as a quarterly, accelerated threshold 1, or accelerated threshold 2 remitter. The CRA will notify you in writing if your classification changes.

What happens if I miss a remittance deadline? The CRA charges a late-remittance penalty ranging from 3% (1–3 days late) to 10% (more than 7 days late), plus compound daily interest. Repeated failures can result in director liability for corporate employers. Set up pre-authorized debit through My Business Account to reduce the risk of missing a deadline.

Where to go from here

The most important step is to register your payroll account before your first pay date using Business Registration Online at canada.ca or by calling the CRA at 1-800-959-5525. Have your business details, estimated payroll figures, and the SIN of the principal owner ready before you start.

Once your RP account is active, set up your remittance schedule, calculate deductions using the CRA’s Payroll Deductions Online Calculator (PDOC), and file your T4 slips and T4 Summary by the last day of February each year.

Important notice: Payroll rules, remittance thresholds, CPP contribution rates, and EI premium rates are updated annually. Always verify the current requirements directly with the Canada Revenue Agency at canada.ca/cra or by calling 1-800-959-5525 before processing your first payroll.