What Are My Obligations When I Hire My First Employee?

Hiring the first employee is a milestone that arrives wrapped in administration. From the first pay, you are withholding income tax, Canada Pension Plan contributions, and Employment Insurance premiums from someone else's wages — money that belongs to the government from the moment you deduct it.

Around the payroll core sit provincial obligations most new employers meet for the first time: workers' compensation registration, employment standards (minimum wage, overtime, vacation, statutory holidays), and eventually the records of employment and T4 slips that mark the rhythm of an employer's year.

The sequence is standard: open a payroll program account under your business number before the first payment; collect the employee's TD1 forms (federal and provincial) to set withholding; calculate deductions each pay using CRA's payroll deductions calculator or software; and remit the withheld amounts plus the employer's share of CPP and EI (the employer matches CPP and pays 1.4 times the EI premium) by the deadline for your remitter category — monthly for most new employers. Late or missing remittances draw automatic penalties, and directors can be personally liable for unremitted source deductions even inside a corporation.

The employment-law layer runs in parallel: register with your provincial workers' compensation board (often mandatory within days of hiring), meet provincial employment standards from day one, and put a written employment agreement in place before the start date — terms offered after work begins may be unenforceable. Close the loop at the calendar's edges: a Record of Employment within days of any interruption in earnings, and T4 slips by the end of February each year. None of this is difficult; all of it is unforgiving of improvisation.