Payroll setup for a new corporation
This guide explains how a new corporation sets up payroll, including salary paid to its owner. It covers remittance deadlines, T4 slips, and when a payroll account has to exist. We prepare and file your articles of incorporation for $35.00, HST included. The government fee is separate and charged at cost: $200.00 to Corporations Canada under the CBCA, or $300.00 to the Ontario Business Registry under the OBCA. Open Corporation for $35 is a department of Gondaliya CPA. A Chartered Professional Accountant reviews this guide against Canada Revenue Agency guidance before it is published, and again after each federal budget.
When a corporation needs a payroll account
A corporation needs a payroll account, the RP account, before its first remittance of payroll deductions is due. Paying a salary to anyone, including the owner, starts that clock.
A corporation that pays its owner only dividends does not run payroll for that owner. Dividends are reported on a T5 slip instead of a T4.
| How people are paid | Payroll account needed? |
|---|---|
| Salary or wages to employees | Yes |
| Salary or bonus to the owner | Yes |
| Dividends only to the owner | No, a T5 slip reports them |
| Fees to independent contractors | No payroll deductions, but check the worker's status first |
The payroll account sits under the corporation's business number. Our business number and CRA accounts guide explains how it is registered.
What is deducted and remitted
Each pay, the corporation withholds income tax, Canada Pension Plan contributions and Employment Insurance premiums. It adds its own employer share of CPP and EI.
The withheld amounts and the employer share are remitted together. They belong to the Canada Revenue Agency from the day they are withheld.
| Deduction | Employee share | Employer share |
|---|---|---|
| Income tax | Withheld from pay | None |
| Canada Pension Plan | Withheld from pay | Matched by the corporation |
| Employment Insurance | Withheld from pay | 1.4 times the employee premium |
Under the Employment Insurance Act, an owner who controls more than 40 percent of the voting shares is not in insurable employment. EI premiums do not apply to that owner's salary, but CPP still does.
Our $35.00 fee includes HST. Government fees are passed through at cost with no mark-up. Every figure is on our full pricing page.
Remittance deadlines
A new employer starts as a regular remitter. Its deductions are due by the 15th day of the month after the month in which the pay was made.
The schedule then follows the size of the payroll. Larger employers remit more frequently, and small employers with a clean record can qualify to remit quarterly.
| Remitter type | Who it applies to | Deductions due |
|---|---|---|
| Regular | New employers and most small employers | By the 15th of the month after the pay |
| Quarterly | Small employers with a clean compliance record | By the 15th of the month after each quarter |
| Accelerated | Employers with larger average monthly withholdings | Twice a month or more, on dates set by the Canada Revenue Agency |
The Canada Revenue Agency sets the withholding thresholds for each type and tells the employer its remitter type in writing.
We file your incorporation for $35.00, HST included
Government fee shown separately at cost. A CPA plans the owner's salary and dividends before payroll starts.
T4 slips and the T4 summary
Each person paid a salary in a calendar year receives a T4 slip. The slips and a T4 summary go to the Canada Revenue Agency by the last day of February.
An employer filing more than five slips for a year must file them electronically. The T4 follows the calendar year, whatever the corporation's own year end.
| Slip | What it reports | Due |
|---|---|---|
| T4 slip | Salary, bonus and the deductions withheld for one person | Last day of February after the calendar year |
| T4 summary | The totals of every T4 slip for the year | Last day of February after the calendar year |
| T5 slip | Dividends paid to shareholders | Last day of February after the calendar year |
Our fiscal year end guide explains how the calendar-year slips sit beside the corporation's tax year.
Penalties for late remittances
A late remittance is penalized on a scale that rises with each day of delay. A repeat failure in the same calendar year raises the rate further.
Directors can be held personally liable for payroll deductions the corporation did not remit. That liability is separate from the corporation's own penalty.
| Remittance received | Maximum penalty |
|---|---|
| One to three days late | 3 percent of the amount due |
| Four or five days late | 5 percent of the amount due |
| Six or seven days late | 7 percent of the amount due |
| More than seven days late, or not remitted | 10 percent of the amount due |
| Repeat failure in the same calendar year | 20 percent of the amount due |
These penalty figures were last checked on 7 October 2026.
Payroll deductions are held in trust for the Canada Revenue Agency. Using them to pay other bills does not change who they belong to.
What setting up payroll costs
The incorporation comes first, and our fee for it is fixed. The payroll account is opened afterwards, under the business number the incorporation provides.
The table sets out each charge, its HST treatment and who collects it.
| Item | Amount | HST | Total | Who charges it |
|---|---|---|---|---|
| Our incorporation filing fee | $35.00 | Included | $35.00 | Open Corporation for $35 |
| Federal articles of incorporation | $200.00 | Not applicable | $200.00 | Corporations Canada |
| Ontario articles of incorporation | $300.00 | Not applicable | $300.00 | Ontario Business Registry |
| Registering the payroll account | Not confirmed, reviewer to verify on the official page | Not applicable | Not confirmed, reviewer to verify on the official page | Canada Revenue Agency |
Our $35.00 fee includes HST and government fees are passed through at cost with no mark-up. These figures were last checked on 7 September 2026.
What a CPA checks before the first payroll
This guide explains the rules. It cannot tell you how to pay yourself, because that depends on your income, your RRSP plans and the corporation's profit.
Salary against dividends is the first thing we look at. Salary needs a payroll account and creates RRSP room, while dividends need neither.
Then the payroll account. We open it under the business number before the first remittance falls due.
Then EI. We check the owner's voting control against the 40 percent rule before premiums are withheld.
Then the remittance calendar. We diarize the 15th of each month and the February deadline for T4 and T5 slips.
Last, contractors. We check that anyone paid as a contractor is not an employee in fact. The parent firm sets out the same ground in its Gondaliya CPA resources library.
Frequently asked questions
These are the questions owners ask about setting up payroll. Each answer carries the figure, the rule or the body that makes it true, so it can be read on its own.
When does my corporation need a payroll account?
When are payroll remittances due?
Do I pay EI on my own salary?
When are T4 slips due?
What is the penalty for a late remittance?
Can directors be personally liable for payroll?
Do I need payroll if I only pay myself dividends?
What does it cost to incorporate before setting up payroll?
Why owners trust the filing to us
Gondaliya CPA Professional Corporation is registered with CPA Ontario under firm registration number 61330051. Our clients have left us 1,300+ five-star Google reviews, and we work from 13 Ontario offices, open 9:00 AM to 8:30 PM, Monday to Sunday. We back every filing with a 30-day money-back guarantee and a 60-day fee-matching policy, and we are a Xero Partner Award Winner 2026. Open Corporation for $35 is a department of Gondaliya CPA.
Ready to incorporate
Send the intake form and we will confirm your jurisdiction, your share structure and your year end before anything is filed. Our fee is $35.00, HST included, and the government fee is shown separately at cost. Payment is by Interac e-Transfer to info@gondaliyacpa.ca, and the security question is Not Applicable because auto-deposit is enabled.
No legal advice
Gondaliya CPA Professional Corporation is a firm of Chartered Professional Accountants licensed by CPA Ontario, firm registration number 61330051. It is not a law firm. We prepare and file corporate documents and we provide accounting and tax advice. Nothing on this page is legal advice, and reading it creates no solicitor and client relationship. For legal advice, including advice on whether a worker is an employee or a contractor, consult a lawyer licensed in the province where your corporation carries on business.
