Guides an employer through the full Canadian payroll cycle: registering a CRA payroll (RP) account, computing CPP/CPP2, EI, and federal/provincial income tax source deductions each pay run, remitting via PD7A on the correct accelerated/regular/quarterly schedule, issuing Records of Employment (ROE Web), and filing T4/T4 Summary and RL-1 slips by the February 28 year-end deadline.
Confirm the business has a CRA Business Number (BN) with a payroll program account (RP suffix) and, for Quebec employers, a Revenu Québec source-deductions account. Determine each employee's province of employment, collect completed TD1 (federal) and provincial TD1 forms, and classify employees vs. self-employed contractors. Identify applicable provincial Employer Health Tax obligations (Ontario EHT, BC EHT, Manitoba HE levy, Quebec HSF) and Workers' Compensation board registration requirements.
For each pay run, calculate the three mandatory source deductions using the CRA T4032 payroll deduction tables (or T4127 formulas): CPP (5.95% on earnings between the $3,500 basic exemption and the $74,600 YMPE, plus CPP2 at 4.00% on the $74,600–$85,000 YAMPE band), EI (1.63% of insurable earnings up to $68,900 — or the Quebec-reduced rate of 1.31% for Quebec employees who pay QPIP separately), and federal + provincial income tax. For Quebec employees, also deduct QPP (6.40% combined base + additional on the $3,500–$71,300 band, plus QPP2 at 4.00% on $71,300–$81,200) and QPIP (0.494% on earnings up to $98,000) instead of CPP and full EI.
Remit all source deductions (employee income tax + CPP employee + CPP employer + EI employee + EI employer) to the CRA by the due date determined by the employer's remitter category. Regular remitters (average monthly withholding below $25,000) remit by the 15th of the following month; Threshold 1 accelerated remitters ($25,000–$99,999) remit twice monthly; Threshold 2 accelerated remitters ($100,000+) remit within 3 business days of the pay date. Quebec employers separately remit Quebec income tax + QPP + QPIP + HSF via TPZ-1015.R-V to Revenu Québec on matching deadlines.
Issue a Record of Employment via ROE Web within 5 calendar days of any interruption in earnings (termination, layoff, maternity/parental leave, illness, etc.). Select the correct reason code (e.g., Code A for shortage of work, Code D for illness, Code M for dismissal, Code E for quit). The ROE informs Service Canada of insurable hours and earnings, which determines the employee's EI benefit entitlement. Final pay must include all outstanding wages, accrued vacation pay, and any termination or severance pay required under the applicable provincial Employment Standards Act.
By February 28, prepare and distribute T4 slips to all employees and file the T4 Summary with CRA. For Quebec employers, also prepare RL-1 slips and file the Sommaire 1 (RLZ-1.S-V) with Revenu Québec by the same deadline. Reconcile total source deductions remitted throughout the year against T4 Summary totals, and true up any underpayment. For contractors paid $500+ or in certain categories, issue T4A slips. Confirm that all CPP/EI annual maximums were correctly tracked and that no over-deductions require refunds to employees.
Run this workflow in your AI agent
Install the MCP connector once — your agent loads the right skills, works through each phase, and routes to a licensed Canada accountant for review.
canada-payroll
Use this skill whenever asked about Canadian payroll, source deductions, CPP contributions
qc-employer-contributions
Use this skill whenever asked about Quebec-specific employer contributions — CNESST (CSST)
ca-fed-cpp-ei
Use this skill whenever asked about Canada Pension Plan (CPP) or Employment Insurance (EI)
nt-payroll-tax
Use this skill for the Northwest Territories Payroll Tax — 2% employer-paid payroll tax (w