CRA Payroll Account and Salary for a One-Owner Corporation

Do I need a CRA payroll account to pay myself a salary?

Yes. A salary from your corporation is employment income, so the corporation is an employer even when you are its only worker. It must withhold income tax from each payment (Income Tax Act, s. 153) and deduct CPP (T4001). It must also register a payroll account (program code RP) before its first remittance is due, which is usually the 15th day of the month after the first pay with deductions unless the CRA assigns a different remitting frequency (CRA: registering for payroll).

The order of work:

1. Check who controls the voting shares; that decides EI.
2. Add the payroll account to the corporation's business number.
3. Complete your TD1 and set the salary and pay dates.
4. Each payday, work out income tax and CPP with the CRA's tables or calculator, pay yourself the net, and set aside the deductions plus the corporation's matching CPP.
5. Remit by the due date for your remitter type.
6. Give yourself a T4 and file the T4 summary by the last day of February following the calendar year to which the slips apply.

A dividend is not salary and does not go through payroll. See Salary or dividends for the choice and How much to pay yourself for the amount.

A case is not simple if you have already taken money out without payroll, share the voting shares with a spouse, partner or relative, mix salary with dividends and shareholder loans, are on a work permit, or the corporation is in Quebec.

Gather the share register, the corporation's business number, your social insurance number, the salary and pay dates you plan, and your completed federal Form TD1 and any provincial or territorial one (T4001). A corporation with no business number yet starts with After you incorporate.

How do I open the payroll account when the corporation already has a business number?

Add a payroll program account to the existing business number; do not register for a new one (T4001). Since November 3, 2025, new business number and program account registrations go through Business Registration Online (CRA tax tip). From July 14, 2026, that service opens only through a CRA account (CRA tax tip).

1. Sign in with a CRA account: CRA user ID and password, a Sign-In Partner or, for residents of British Columbia and Alberta, a provincial partner.
2. Open Business Registration Online and add a program account to the existing business number.
3. Choose payroll, program code RP.
4. Keep the new payroll account number: the nine-digit business number, then RP, then a four-digit reference, such as 0001 for the first account (CRA: payroll account).

Paper is the fallback. If you have never filed a return (newcomers, for example), have not filed in the last two years or cannot meet the CRA account requirements, mail Form RC1, which covers payroll accounts (CRA tax tip; Form RC1). Without an open account, deductions and remittances are still due on time, and a penalty may follow (CRA: registering for payroll).

What is deducted from my own pay: income tax, CPP and EI?

The corporation withholds income tax and CPP from your salary, and EI only if your employment is insurable (covered by EI).

CPP still applies to your employment by your own corporation: the CPP Act's list of excepted employment has no voting-share rule (CPP Act, s. 6), and the CRA lists that exclusion only under EI (CRA: pensionable and insurable). CPP is deducted from the month after you turn 18 until the month you turn 70 (T4001). If you are 65 to 69 and receive a CPP or QPP retirement pension, you can sign Form CPT30, give the corporation a copy and send the original to the CRA; it takes effect the first day of the month after you give the corporation the copy (Form CPT30).

The CRA's Payroll Deductions Online Calculator covers every province and territory except Quebec; use the actual pay date and your province of employment (T4001).

Do I pay EI if I own the corporation?

Generally not if you control more than 40% of the corporation's voting shares. The Employment Insurance Act says insurable employment does not include employment of a person by a corporation if the person controls more than that share (EI Act, s. 5(2)(b)). The CRA lists the same exclusion for employers: no EI premiums are deducted (T4001). Employment that is not insurable builds no EI claim; the voluntary program below covers special benefits only.

How the shares are held can flip that answer:

The Act also excludes employment between people who do not deal at arm's length (s. 5(2)(i); T4001). Related persons, such as people connected by blood, marriage, common-law partnership or adoption, or a corporation and the person who controls it, are treated as not at arm's length (Income Tax Act, s. 251), unless the Minister is satisfied the terms are ones unrelated parties would have agreed (s. 5(3)).

If the answer is unclear, settle it before the first pay. A payer or worker can ask the CRA for a CPP/EI ruling on whether employment is insurable, by June 29 of the year after the year the question relates to (CRA: when to ask for a ruling).

Can I choose EI special benefits anyway?

Yes, through the voluntary EI program for self-employed people. A person who controls more than 40% of a corporation's voting shares is treated as self-employed for it (Service Canada). Employment excluded only by the related-person rule does not open the program (EI Act, s. 152.01). Your payroll stays free of EI: employment of a person who has entered the program is still not insurable (T4001).

The program pays special benefits only: maternity, parental, sickness, family caregiver and compassionate care. Besides the conditions of the specific benefit, you must (Service Canada: who can qualify):

• be a Canadian citizen or permanent resident;
• have cut the time you work on the business by more than 40% for at least one week;
• have earned at least $9,254 in net self-employed earnings in the previous calendar year (the figure for 2025 earnings; it changes with the year);
• have an agreement with the Canada Employment Insurance Commission that has been active for at least 12 months before benefits are paid.

For an owner employed by the corporation, the Act counts as self-employed earnings the insurable earnings the job would have had if it were insurable (EI Act, s. 152.01). Your salary is therefore what the minimum and the premium are based on. The Act defines these earnings only for an owner who is employed, so ask Service Canada whether a year paid only in dividends qualifies.

Outside Quebec, premiums are 1.63% of self-employment earnings, to a maximum of $1,123.07 for the year. In Quebec they are 1.30%, to a maximum of $895.70, and maternity, paternity, parental and adoption benefits come from the Quebec Parental Insurance Plan instead. Premiums are paid with your personal tax return on Schedule 13, not through the corporation's payroll (Service Canada: premiums).

The decision can be hard to undo. You can withdraw until you receive special benefits. Notice within 60 days of entering the agreement cancels it and no premiums are owed. Later notice ends the agreement on December 31, so premiums are owed until then, and receiving benefits cancels the notice. Once you have received benefits, premiums continue while you are self-employed (Service Canada: withdrawing; EI Act, s. 152.02).

What does the corporation pay on top of my salary?

The corporation pays an employer CPP share equal to the CPP it deducts from you (T4001), and no employer EI while your employment is not insurable. The employer EI premium is 140% of the premiums deducted from employees (CRA: EI), so with none deducted there is none to add.

The corporation's cost of your pay is the salary plus that matching CPP, plus any workers' compensation or provincial payroll charges below.

How often do I run payroll and remit to the CRA?

You choose how often you pay yourself; each payment with deductions leads to a remittance. A new corporation with a small payroll can remit quarterly. Otherwise it remits monthly.

The monthly withholding amount is all the required remittances in a calendar month (CRA: types of remitters). For you it is the income tax and CPP withheld plus the corporation's matching CPP, plus the remittances of any associated corporation, because associated corporations share one remitter type (Income Tax Regulations, s. 108). The regulation tests either of the two calendar years before the current one; the CRA's page names only the second. If you are unsure whether quarterly applies, check the remitter type in your CRA account and remit monthly until it is confirmed. A due date on a weekend or CRA holiday moves to the next business day (CRA: when to remit).

Missing a remittance can bring a penalty. A director, usually you in an owner-only corporation, can be personally liable for the income tax, CPP and EI the corporation fails to withhold or remit, with conditions and a due-diligence defence. Recovery cannot start more than two years after the director last ceased to be a director (Income Tax Act, s. 227.1; CPP Act, s. 21.1; EI Act, s. 83). See Late payroll remittance.

What do I file at year end: the T4 slip and summary?

The corporation gives you a T4 slip and files the T4 slip and summary with the CRA by the last day of February following the calendar year to which the slips apply (RC4120). A due date on a weekend moves to the next business day. Your T4 is your record of employment income for your personal return.

For an owner whose employment is not insurable, outside Quebec:

These entries follow RC4120. Check the EI boxes: box 24 reports the insurable earnings used for box 18, and box 28 stays blank when either box shows an amount above 0. Keep payroll records for at least six years after the year they relate to (T4001); see How long to keep business records. For late slips, see Late T4 and T5 slips.

Do workers' compensation or provincial payroll taxes apply to an owner-only payroll?

It depends on the province, and payroll taxes also count the payroll of associated corporations. Ontario, British Columbia, Manitoba and Newfoundland and Labrador each exempt payroll up to a threshold, shown below; the Northwest Territories page states none. Places not listed may have payroll taxes of their own; Running payroll lists more.

Workers' compensation. Each province runs its own board.

• Ontario: independent operators, sole proprietors, partners and executive officers are not covered unless they apply for optional insurance, except in construction, where coverage is compulsory unless an exemption applies (WSIB policy; WSIB).
• British Columbia: shareholders, directors and officers actively involved in an incorporated company are generally workers, and the corporation must be registered with WorkSafeBC. Owners apply so WorkSafeBC can decide whether the corporation must register (WorkSafeBC).
• Alberta: a business owner is not automatically covered. Optional personal coverage is open to owners with or without workers and to corporate directors, and you must first open a WCB-Alberta account (WCB-Alberta).
• Other provinces: ask the provincial board whether a corporation with no workers but its owner must register.

Provincial payroll taxes.

In the Northwest Territories the payroll tax is levied on employees who work or provide services there (NWT). The employer withholds it and registers within 21 days after first paying remuneration if it has a fixed place of business there (NWT: employers). Check how each place applies to your own pay.

What if I already took money out and now want it to be salary?

Relabelling money you already took does not make it salary. The corporation has to pay it through payroll, with deductions, and what the money was in the meantime (a shareholder loan, a benefit, an advance of pay) depends on the records and what was agreed. If the payments were pay and the corporation had no payroll account, it still had to calculate deductions and remit them by the due date, and a penalty may apply (CRA: registering for payroll).

Paying yourself a salary after the fact covers recasting, Shareholder loans covers money taken as a loan, and Late payroll remittance covers deductions that were due. Open the account first, so salary paid from now on runs through payroll.

What changes in Quebec?

A Quebec employer deducts QPP instead of CPP, sends QPP, QPIP and Quebec income tax deductions to Revenu Québec, and sends EI and federal income tax deductions to the CRA (T4001). It also files RL-1 slips and the RL-1 summary with Revenu Québec by the last day of February of the following year, and the federal requirements still apply. The CRA says EI is deducted in Quebec if the employment is insurable, so the voting-share rule above still decides EI.

QPP and QPIP follow Revenu Québec's rules, not the EI voting-share rule; this page does not cover them. Quebec payroll has further employer charges that Running payroll lists. Ask Revenu Québec how they treat an owner paid by their own corporation before the first pay. Workers' compensation in Quebec is run by the CNESST (T4001).

Example

Illustrative Canadian dollars; actual deductions come from the CRA's tables.

Ontario consultant, sole shareholder, paid C$5,000 a month

She owns all the voting shares, so no EI is withheld. The corporation adds a payroll account to its business number before the first payday. Each month about C$280 of CPP is withheld from her and about C$280 is added by the corporation: C$560 before income tax. Income tax adds several hundred dollars, so her monthly total is likely above the new small employer limit and she would remit monthly, by the 15th of the next month. At C$2,000 a month, CPP is about C$203 in total; with a little income tax the monthly total may stay under the limit and allow quarterly remitting if every other condition is met.

For the C$60,000 year, her T4 shows C$60,000 in boxes 14 and 26, about C$3,362 in box 16, 0 in box 24 and the EI box ticked in box 28. The corporation's payroll cost is C$60,000 plus about C$3,362 of matching CPP, with no employer EI. With no associated employers, her payroll is far below Ontario's Employer Health Tax exemption.

British Columbia owner of a design corporation wants parental benefits

He is the sole shareholder, so his payroll generally builds no EI coverage, however long he has paid himself, if the 40% rule applies to him. In March of year 1 he signs the voluntary agreement; his salary is the earnings the minimum and the premium are based on, and he reports the premium on Schedule 13 with his year-1 return. Benefits cannot be paid until the agreement has been active for 12 months from the agreement date, so the earliest claim is after March of year 2, if every other condition is met. Withdrawing within 60 days of signing owes no premiums. Before signing, he checks the earnings minimum with Service Canada.

Alberta owner takes C$4,000 a month for a year with no payroll

The corporation paid its owner C$48,000 in cash and never opened a payroll account or issued a T4. What the money is depends on the records. It may be a shareholder loan, pay that should have had deductions, or a mix. She gathers the shareholder ledger, bank statements and year-end statements to decide which. If part becomes salary, the corporation opens the account, calculates deductions on what was paid, and deals with late remittances and slips. If part is a genuine loan and the corporation's year-end is December 31, she must repay it by December 31 of the next year, and not as part of a series of loans and repayments; otherwise it is added to her income for the year she took it (Income Tax Act, s. 15).

Different for you?

• You have been drawing money without payroll: the account, the deductions and the slips may still be due. Bring the shareholder ledger, bank statements, year-end statements and any resolution setting your pay to bookkeeping help, and read Paying yourself a salary after the fact and Shareholder loans.
• You share the shares with a spouse, partner or relative, hold them through a holding company or trust, or control 40% or less of the voting shares: EI can turn on how the shares are held and on the related-person rule. A CPP/EI ruling from the CRA settles insurability. Bring the share register and articles to bookkeeping help to set up the payroll account and records around that answer.
• You are planning maternity, parental or sickness leave: the voluntary EI agreement must be active for at least 12 months before benefits and is hard to undo once you claim. Service Canada decides eligibility; bring your share register and recent pay to bookkeeping help to set the salary and records first.
• You want salary, dividends and a loan account together: the mix changes your personal tax, your T4 and T5 slips and how the loan account is cleared. See Salary or dividends, Salary for RRSP room and CPP and bookkeeping help.
• The corporation is in Quebec: Revenu Québec sets the QPP and QPIP rules. See Salary for RRSP room and CPP for Quebec's salary rules, and bring your pay plan and registrations to bookkeeping help to set up the accounts and records.
• You are on a work permit: check that its terms allow you to work for your own corporation before the first pay, and see Incorporating as a newcomer or non-resident.
• You left a job to contract through your corporation: see First year paying yourself.
• You will hire staff or pay family: see Running payroll and Paying family members.
• A remittance or slip is late: see Late payroll remittance and Late T4 and T5 slips.
• You need the entries in your books: see Payroll journal entry.