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How to Complete the Payroll Tax Page

Updated

Available for the following plan: Free, Standard, Premium, Platinum
Available for the following user access levels: Admin

This guide will walk you through setting up your company's Canadian payroll tax information. Entering these details correctly is crucial for ensuring accurate tax calculations and remittances to the Canada Revenue Agency (CRA).

You can find this page by navigating to Settings   > Payroll > Payroll Tax.

This article explains how to complete the fields on this page.

Getting started

Click through the sections below to learn how to complete each section of the Payroll Tax page. 

Screenshot of Payroll Tax settings page showing Canada Revenue Agency (CRA) section with CRA Business Number 138393039, CRA Program Code RP, CRA Reference Number 3938, Remitter Type Threshold 1 accelerated, and Reduced employer Employment Insurance (EI) rate section with Custom employer EI rate field showing 1.4
Canada Revenue Agency (CRA) and Remitter Type

Canada Revenue Agency (CRA)

This section links your Employment Hero payroll account to your official CRA payroll program account. You can find this information on any payroll-related correspondence from the CRA, such as your Statement of Account.

  • CRA Business Number: Enter your 9-digit Business Number (BN) assigned by the CRA. Example: 123456789.
  • CRA Program Code: For a payroll account, this code is always RP.
  • CRA Reference Number: Enter the 4-digit reference number associated with your payroll account. Example: 0001.
  • Your full CRA Payroll Account Number will look like this: 123456789 RP 0001.

Remitter Type

Your remitter type determines how frequently you need to send your payroll deductions (like CPP, EI, and income tax) to the CRA. The CRA assigns this status to you based on your average monthly withholding amount.

Select your assigned remitter type from the dropdown menu. Common types include:

  • Regular: Remit monthly.
  • Quarterly: For eligible small employers, remit once per quarter.
  • Threshold 1 Accelerated: For larger employers, remit twice a month.
  • Threshold 2 Accelerated: For the largest employers, remit four times a month.

Unsure of your Remitter Type?

If you are unsure of your remitter type, please refer to your CRA documentation or contact the CRA directly. Selecting the wrong type can lead to penalties for late remittances.

Reduced Employer Employment Insurance (EI) rate

Some employers who provide their employees with a short-term disability (STD) plan may be eligible for the EI Premium Reduction Program. This allows you to pay a lower employer EI premium rate.

  • Custom employer EI rate (Optional): If you have been approved for a reduced rate by Service Canada, enter that specific rate here (e.g., 1.227 instead of the standard rate). If you are not part of this program, leave this field blank.
Employer Payroll Tax (EPT) Exemption Override

Most provinces and territories provide an annual payroll exemption, meaning you don't pay provincial employer health tax until your total gross payroll for the year exceeds a certain threshold (e.g., the first $1 million in Ontario).

By default, the system will automatically apply this exemption and will only start calculating the tax after your payroll has surpassed the provincial threshold.

The override feature is for businesses that expect their annual payroll to exceed the exemption threshold and prefer to pay the tax from the very first payroll of the year. This helps avoid a large, unexpected tax bill later in the year.

How to Use the Override:

  1. Click the + Add year button.
  2. Select the provinces and territories where you want to waive the exemption.
  3. Select the calendar year for which the override should apply.
  4. Click Save.