How to Set Up a CRA Payroll Account for Your Corporation in Canada

How to set up a CRA payroll account for your corporation in Canada is one of the first questions self-incorporated owners ask when they decide to pay themselves salary. If your corporation will issue T4 income, withhold CPP, EI, and income tax, and remit deductions to CRA, you need a payroll program account before payroll starts.

For a one-person corporation, this is usually straightforward. The key is understanding when the account is required, how the RP number works, and what records you need from the first pay period.

When Do You Need a CRA Payroll Account?

You need a CRA payroll account when your corporation pays employment income and has to deduct payroll amounts. That includes salary, wages, bonuses, taxable benefits, and other T4 employment income.

You generally do not need a payroll account just because you withdraw money from the corporation as dividends. Dividends are shareholder payments, not payroll. They are normally reported on a T5, not a T4, and they do not involve CPP, EI, or payroll tax withholding.

If you are still deciding between salary and dividends, read our guide to salary vs. dividends for self-incorporated Canadians. Once you choose to pay even a small amount of salary, payroll compliance begins.

How to Set Up a CRA Payroll Account for Your Corporation

A payroll account is added to your corporation's existing business number. The format usually looks like this: 123456789 RP 0001. The nine digits are your business number, RP identifies the payroll program, and 0001 is the first payroll account under that business.

You can open the account in a few common ways:

• CRA Business Registration Online: This is the fastest route if you already have your corporation's business number.
• CRA My Business Account: If you have online access, you can add a payroll program account from the portal.
• By phone with CRA: Useful if your corporation has unusual details or you are not sure which program accounts are already active.

Before starting, gather:

• Your corporation's legal name and business number
• Mailing and physical business address
• Contact information for the person managing payroll
• Expected first employee pay date
• Estimated number of employees, even if it is just you
• Estimated monthly payroll deductions

For most self-incorporated Canadians, the employee count is one and the expected remittances are well below the threshold for accelerated remitters.

What to Do Before the First Salary Payment

Opening the account is only step one. Before you transfer salary from the corporation to your personal account, decide on a repeatable payroll process.

A simple monthly process looks like this:

1. Choose a pay date, such as the last business day of each month.
2. Decide the gross salary for that pay period.
3. Calculate CPP, EI, and income tax withholding.
4. Generate a paystub showing gross pay, deductions, and net pay.
5. Transfer the net pay from the corporation to your personal bank account.
6. Save the paystub and bank confirmation.
7. Remit deductions and employer portions to CRA by the deadline.

A free tool like PaystubHero can help with step 3 and step 4 by calculating CRA payroll deductions and creating a clean PDF paystub for your records.

Know Your Remittance Deadline

New one-person corporations are usually regular remitters. That means payroll deductions are due by the 15th day of the month after the month you paid salary. If you pay yourself on June 30, the remittance is generally due July 15.

Your remittance is more than the deductions taken from your net pay. It includes:

• Employee CPP withheld
• Employer CPP paid by the corporation
• Employee EI withheld, if applicable
• Employer EI paid by the corporation
• Income tax withheld

For more detail, see our guide to CRA payroll remittance deadlines for self-incorporated Canadians.

Keep Payroll Records From Day One

Once the RP account is active, CRA expects proper payroll records. Keep every paystub, remittance confirmation, and year-end T4 support file for at least six years.

Your paystubs should support the totals you eventually report on the T4: Box 14 for employment income, Box 16 for CPP, Box 18 for EI, and Box 22 for income tax deducted. If your paystubs are accurate all year, the T4 filing process becomes much easier.

Common Mistakes to Avoid

Self-incorporated owners often run into problems because they treat salary like an informal owner draw. Avoid these mistakes:

• Paying net salary before calculating deductions
• Forgetting the employer CPP and EI portions
• Missing the 15th-of-the-next-month remittance deadline
• Waiting until year end to reconstruct paystubs
• Taking salary without opening the payroll account
• Mixing dividend payments and salary payments without clear labels

None of these are hard to fix in the moment, but they become painful after months of inconsistent records.

Key Takeaway

If your corporation will pay you T4 salary, set up the CRA payroll account before the first paycheque. Then create a consistent routine: calculate deductions, generate a paystub, pay yourself the net amount, remit to CRA on time, and save the records. That habit keeps your corporation compliant and makes year-end T4 reporting much cleaner.

Not tax advice — confirm your setup with your accountant or CRA if your situation is unusual.