Hiring Your First Employee in BC: A Payroll Checklist
Hiring your first employee in BC means building a payroll process alongside the new role. Set up accounts, employment records, deductions, and deadlines before the first payday so the employee is paid accurately and your business keeps reliable records.
This checklist is a starting point for employers in Surrey, Vancouver, the Fraser Valley, Vancouver Island, and across BC.
Before the First Payday
Confirm worker status. Decide whether the relationship is employment or a genuine independent business arrangement based on the facts.
Set up the CRA payroll account. Confirm the payroll program account under your business number and the applicable remitter type.
Check WorkSafeBC registration. Most employers need coverage; confirm requirements, classification, and the effective date with WorkSafeBC.
Collect employee information securely. Obtain the required identification and completed federal and BC TD1 forms, and protect access to personal records.
Document employment terms. Set out duties, pay, hours, vacation, and other terms in a lawful written agreement.
Choose payroll software or support. Establish approval, payment, recordkeeping, and deadline procedures.
What to Deduct and Remit
Payroll generally involves income tax, CPP, and EI deductions, subject to employee eligibility, annual limits, and applicable exceptions. The employer generally matches CPP contributions and pays EI premiums at 1.4 times the employee amount unless a reduced rate applies.
Use current CRA calculations rather than carrying forward an old rate or maximum. Taxable benefits, bonuses, vacation pay, and owner-manager payroll can require additional attention.
Regular remitters generally remit by the 15th of the following month. Some qualifying employers remit quarterly, and larger employers can have accelerated schedules. Confirm the schedule CRA assigns to your account. Late-remittance penalties generally rise through 3%, 5%, 7%, and 10% depending on lateness; higher penalties may apply in specified repeated-failure situations. Interest and director liability can also be relevant.
Use the CRA employers’ guide to confirm deductions, reporting, and remittance obligations.
Year-End Slips and Other Employer Costs
T4 slips and the related return are generally due by the last day of February following the calendar year, subject to weekend and holiday rules. Reconcile payroll totals and remittances before filing. Review Record of Employment requirements when an interruption of earnings occurs.
WorkSafeBC premiums and reporting are separate from CRA payroll remittances. BC Employer Health Tax can also apply. A general $1 million exemption is available for qualifying employers, but associated-employer sharing, part-year rules, and special categories can change the result. Review eligibility rather than assuming every employer below that payroll figure owes nothing.
BC Employment Standards to Build Into Payroll
Minimum wage: check the current applicable rate and any special rules.
Hours and overtime: general daily and weekly thresholds apply, with exemptions and valid arrangements to consider.
Vacation: minimum vacation pay is generally 4%, increasing to 6% after five consecutive years, alongside vacation time requirements.
Statutory holidays and leave: eligibility and pay rules need separate review.
Pay statements and records: provide required statements and retain accurate hours and wage records.
Final wages: BC generally requires payment within 48 hours when the employer ends employment and within six days when the employee quits.
These are minimum standards, not a complete employment-law checklist. Exemptions and federal jurisdiction can change which rules apply. Review the BC employment standards information sheet and obtain advice on specific employment terms.
Employee or Independent Contractor?
A contract label does not determine status. CRA considers the actual relationship, including control, tools, opportunity for profit, risk of loss, and other relevant factors. No single factor, such as fixed hours, decides every case.
Tax, employment standards, and workers’ compensation rules can apply different tests. If uncertain, review the arrangement before payments begin and consider a CRA CPP/EI ruling where appropriate. Misclassification can create unpaid deductions, benefits, penalties, and other liabilities.
Speak With a BC CPA
TSB Chartered Professional Accountant Inc. serves business owners across British Columbia, including the Lower Mainland, Fraser Valley, and Vancouver Island. Book a free consultation to discuss your business and next steps.
Tristan Bagri, CPA
Founder & Director
Tristan@tsbcpa.ca | 778-707-4699
Frequently Asked Questions
Can a Bookkeeper or CPA Run Payroll?
Yes. Confirm the scope, approval process, remittance responsibilities, and year-end reporting in writing. The employer remains responsible for compliance.
Do Part-Time Employees Need Payroll?
Generally yes. Part-time or casual status does not remove payroll obligations, although deductions and entitlements depend on the circumstances.
Does Hiring Family Change the Rules?
Related-party employment can affect EI insurability and other rules. Confirm CRA and WorkSafeBC treatment rather than assuming an exemption.
What If I Already Paid Wages Without Deductions?
Reconstruct the records and review corrections promptly with your adviser. Correct future payroll and assess past remittances, slips, interest, and possible relief.
Disclaimer: This article is for general information and is not legal or tax advice. Tax treatment depends on your circumstances and the rules for the relevant year. Consult a qualified professional before acting.
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