CRA Requirements for U.S. Employers Hiring Canadians
Complete guide to Canada Revenue Agency requirements for foreign employers. Learn about registration, payroll accounts, remittances, and compliance obligations.
When hiring Canadian employees, U.S. companies must comply with Canada Revenue Agency (CRA) requirements for payroll, tax deductions, and remittances. Understanding these requirements is essential for legal compliance.
Registration Requirements
What you need to register with the CRA
Business Number (BN)
All employers in Canada must have a Business Number (BN) from the CRA. This is a 9-digit identifier used for all CRA program accounts.
Payroll Account
You must register for a payroll program account (RP account) to remit payroll deductions. This account is used for:
- Income tax deductions
- CPP contributions
- EI premiums
- Provincial variations (QPP, QPIP in Quebec)
GST/HST Registration
If your business activities in Canada exceed $30,000 CAD in annual revenue, you must register for GST/HST. This is separate from payroll registration.
Note: With EOR services, we handle all CRA registration and compliance on your behalf. You don't need to register directly with the CRA.
Mandatory Deductions
What must be deducted and remitted to the CRA
Income Tax
Federal and provincial income tax based on employee's TD1 form and province of residence. Rates vary by province and income level.
Source: CRA Payroll Information
CPP Contributions
5.95% of earnings up to $66,600 (2024). Both employer and employee contribute equal amounts. Maximum annual contribution applies.
Source: CRA CPP Rates
EI Premiums
2.21% of earnings up to $60,300 (2024). Employer pays 1.4x the employee rate. Maximum annual premium applies.
Source: CRA EI Rates
Remittance Requirements
When and how to remit deductions to the CRA
Remittance Frequency
The CRA determines your remittance frequency based on your average monthly withholding amount:
- Monthly: Average monthly remittances less than $25,000
- Quarterly: Average monthly remittances less than $3,000 (requires CRA approval)
- Accelerated: Average monthly remittances $25,000 or more
Remittance Deadlines
Deadlines vary by frequency:
- Monthly: 15th of the following month
- Quarterly: 15th of the month following the quarter end
- Accelerated: Varies (3-4 times per month)
Penalties for Late Remittances
Late remittances result in:
- Penalty charges (3% for first occurrence, 5% for repeat)
- Interest charges on overdue amounts
- Potential requirement for more frequent remittances
Annual Reporting Requirements
Year-end reporting obligations
T4 Information Return
Employers must file a T4 Summary and issue T4 slips to employees by the last day of February following the tax year. This reports:
- Total earnings for the year
- Income tax deducted
- CPP contributions
- EI premiums
- Other deductions and taxable benefits
Record Keeping
The CRA requires employers to maintain detailed payroll records for 6 years, including:
- Payroll registers
- Employee information
- Deduction calculations
- Remittance records
- T4 slips and summaries
Avoid CRA Complexity with EOR Services
We handle all CRA requirements for you
Managing CRA requirements involves complex registration, ongoing remittances, and annual reporting. Our Canadian Employer of Record services handle everything:
- CRA registration and account management
- Accurate deduction calculations
- Timely remittances to CRA
- T4 slip generation and filing
- Record keeping and compliance
- Ongoing support and expertise