Consult a tax professional if you're unsure whether you need to register your business.
Step 1: Determine if you are an employer who must register with the CRA
You are considered an employer when you:
- Hire a person
- Establish regular working hours (for example, 9:00 AM to 5:00 PM)
- Assign and supervise tasks
If you pay your nanny, babysitter, or other domestic worker a salary, the CRA will likely require you to report that income and pay the associated taxes. However, you may not be required to register with the CRA. For further information about employing a caregiver, babysitter, or domestic worker, visit the Government of Canada's website.
Step 2: Open a payroll program account with the CRA
A payroll program account is an account number assigned to employers for the purposes of identifying themselves when dealing with the Canada Revenue Agency (CRA).
For further information about when you have to open a payroll account number and how to open it, visit the Government of Canada’s website.
The payroll program account number follows the format 12345 6789 RP 0001, where RP identifies the CRA payroll program account.
Step 3: Register your business
Once you've determined that you are considered an employer, you can register your business with the CRA.
Step 4: Enter your payroll program account number into your Wave account
Once you receive your payroll account number, enter it into your Wave account by following these steps:
- Log in at waveapps.com.
- Click on your business name at the top right menu, then click Business settings.
- Under the Payroll section, select the Tax Profile button, and enter your number on this page.
Frequently Asked Questions
I'm not a business, so why do I have to become a business?
You may not consider your home a business, but you could be considered a business according to the CRA. When a person is paid for regular work, the CRA generally requires reports of the income earned and taxes paid. If you run payroll and pay your nanny or babysitter, the income and taxes will be recorded for the business number you create when you register with the CRA. Using your business number, you can generate a T4 for your nanny or babysitter, who can use the T4 to report their income.
What's the difference between a payroll account number and a business number?
Your Business Number is a 9-digit account number that identifies your business to federal, provincial, and municipal governments. A payroll account number is a type of business number, and you can sign up for a payroll (deductions) account number when you sign up for a business number.