Hiring your first employee in Canada
Source deductions, WorkSafeBC, and the paperwork you need before the first paycheque, with the 2026 CPP and EI rates.
The first hire turns a business into an employer, with a new set of accounts, deductions, and deadlines. None of it is complicated once it's set up, but the setup has to happen before the first payday.
Before the first day
- 01Open a CRA payroll program account. It's an RP account added to your Business Number, used to send the deductions you withhold.
- 02Register with WorkSafeBC. Any business that hires workers (full-time, part-time, casual, or some contractors) needs coverage. WorkSafeBC suggests applying 30 days before you hire. If you aren't registered and a worker is injured, you can be liable for the full claim costs plus unpaid premiums.
- 03Collect the employee's details. Their Social Insurance Number, and completed federal and B.C. TD1 forms, which set how much income tax to withhold.
- 04Decide the pay schedule. In B.C., pay periods can't be longer than 16 days, and wages must be paid within 8 days after each period ends.
What comes off each paycheque
You withhold three things: income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. You also pay an employer share of CPP and EI on top of wages.
| 2026 | Employee | Employer |
|---|---|---|
| CPP rate (on earnings $3,500 – $74,600) | 5.95% | 5.95% |
| CPP maximum | $4,230.45 | $4,230.45 |
| CPP2 rate (earnings $74,600 – $85,000) | 4% | 4% |
| CPP2 maximum | $416 | $416 |
| EI rate per $100 (up to $68,900) | $1.63 | $2.28 |
| EI maximum | $1,123.07 | $1,572.30 |
The CRA's Payroll Deductions Online Calculator (PDOC) works out each deduction from gross pay if you aren't using payroll software.
Sending it to the CRA
Withheld amounts plus your employer share are sent to the CRA as a remittance. New employers are regular remitters: the remittance for each month's payroll is due by the 15th of the following month, unless the CRA assigns you a different schedule. Late remittances carry penalties.
B.C. employment rules
- 01Minimum wage is $18.25 an hour from June 1, 2026.
- 02Vacation pay is at least 4% of wages after five days of employment, and 6% after five years.
- 03Statutory holidays: B.C. has 11, with holiday pay once an employee qualifies.
- 04Job postings must include the expected pay or pay range.
Year-end and when someone leaves
- 01T4 slips. Give each employee a T4 and file the T4 return with the CRA by the last day of February for the previous year.
- 02Record of Employment. Issue an ROE when an employee has an interruption of earnings, such as quitting, layoff, or leave.
- 03Final pay. All outstanding wages and vacation pay go on the last cheque.
This summary is general information only. Payroll rules have many special cases (commission, contractors versus employees, taxable benefits); check the CRA's employer guide or ask before your first run.
Related guides.
Vacation pay and stat holidays in BC, explained
Entitlements, the 4% and 6% rules, and how to calculate stat pay.2026 British Columbia personal income tax change
The new lowest rate and the July to December catch-up.B.C. pay transparency reports
Pay ranges in job postings, and reports for employers with 50+ staff.
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