Summary
Hiring your first employee turns an Oakville startup into an employer, with new obligations to the CRA, WSIB and Ontario's Employment Standards Act. Before the first payday you need a payroll account under your CRA business number, WSIB registration if your industry requires it, signed TD1 forms, payroll software set to 2026 rates and a remittance calendar. This checklist walks through every step, explains the 2026 CPP and EI figures and includes a calculator showing what your first hire really costs.
Oakville's startup scene stretches from tech and professional firms in the Uptown Core and along the QEW corridor to retailers in Downtown Oakville and Kerr Village and light manufacturers near Burloak. Sooner or later, every founder reaches the same milestone: the work is too much for one person, and it's time to hire.
The first hire is exciting, but it also brings rules most founders haven't dealt with before. You become responsible for withholding and remitting CPP, EI and income tax, paying your own employer share, following Ontario's minimum standards for pay and vacation, and keeping records that the CRA and the Ministry of Labour can review.
The good news is that payroll set up properly at the start mostly runs itself. This checklist covers everything in the order you'll need it. Ledgerive's bookkeeping services can handle payroll setup, every pay run and every remittance, so founders can focus on growing the business.
Hiring your first employee?
Get your CRA payroll account, WSIB and payroll software set up correctly before the first payday. Book a free 30-minute call.
1. Before You Hire: Budget and Classification
Start by deciding whether you are hiring an employee or engaging a contractor. If you set the hours, supply the tools, direct the work and the person has no real chance of profit or loss, the CRA will likely treat them as an employee, even if the contract says otherwise. Misclassification can mean paying both shares of missed CPP and EI plus penalties.
Then budget for more than wages. A full-time employee at minimum wage earns about $37,336 a year for 40 hours a week, and every employee comes with employer CPP, EI, WSIB premiums where required, and any benefits you offer.
A hiring plan also belongs in your forecast. Our financial modeling services build monthly headcount and payroll models so you know how many months of runway each hire uses.
2. Step 1: CRA Payroll Account and BN Registration
Payroll runs through your nine-digit CRA business number. If you incorporated recently, you may have a business number for corporate tax but no payroll account yet.
- BN registration: if you don't have a business number, register for one through the CRA's Business Registration Online or when you incorporate.
- Payroll (RP) account: open it before the first payday; it creates your remittance account, such as 123456789 RP0001.
- Remitter type: most new employers are regular remitters, paying by the 15th of the following month.
- My Business Account: register online to view remittances, file T4s and receive notices under your CRA business number.
- Authorize your bookkeeper: give your bookkeeper or payroll provider online access to the RP account.
3. Step 2: WSIB, EHT and Ontario Rules
| Obligation | What it is | When it applies |
|---|---|---|
| WSIB | Workplace insurance premiums based on your industry rate | Within 10 days of hiring your first worker, in industries where coverage is mandatory |
| Employer Health Tax (EHT) | Ontario payroll tax | Eligible employers are exempt on the first $1 million of annual Ontario payroll |
| ESA poster | Ontario's Employment Standards poster | Give each employee a copy within 30 days of hire |
| Written employment information | Employer name, contact, work location, wage, pay period and pay day, expected hours | Required before the first day for employers with 25 or more employees |
| Minimum standards | Minimum wage, overtime after 44 hours a week, public holidays, vacation pay | From the first day of employment |
Some industries aren't required to carry WSIB coverage, which includes some technology and professional businesses, so check your classification with WSIB rather than assuming. If you're exempt, you can still choose voluntary coverage. Even before you reach 25 employees, giving every new hire a written summary of their pay and hours is good practice and prevents disputes later.
4. Step 3: Collect New-Hire Paperwork
- Signed employment agreement: job title, pay, hours, probation, termination terms and confidentiality, reviewed by an employment lawyer.
- Social Insurance Number (SIN): collect it within three days of the employee starting.
- TD1 and TD1ON forms: the federal and Ontario personal tax credit returns that set income tax withholding.
- Direct deposit details: a void cheque or bank form for electronic pay.
- Emergency contact and benefits enrolment forms, if you offer a group plan.
- ESA poster and policies: the poster within 30 days, plus any workplace policies required for your business.
5. Step 4: Software, Pay Schedule and 2026 Rates
Cloud payroll software calculates deductions, produces pay statements, tracks vacation pay and prepares T4 slips. Pick a pay schedule (weekly, bi-weekly, semi-monthly or monthly) and stick to it. Bi-weekly is the most common for hourly staff; semi-monthly suits salaried teams.
| Item | 2026 figure | Who pays |
|---|---|---|
| CPP rate | 5.95% on earnings between $3,500 and $74,600 | Employee and employer each |
| CPP maximum contribution | $4,230.45 | Employee and employer each |
| CPP2 (second ceiling) | 4% on earnings from $74,600 to $85,000; maximum $416 | Employee and employer each |
| EI rate | 1.63% on earnings up to $68,900; maximum $1,123.07 | Employee |
| EI employer premium | 1.4 times the employee premium; maximum $1,572.30 | Employer |
| Ontario minimum wage | $17.95 an hour from October 1, 2026 | Employer |
6. Interactive First-Employee Cost Calculator
Enter wages paid this year (including vacation pay) and your costs to estimate employer contributions, the total annual cost and what you'll remit to the CRA each month. The calculator uses 2026 CPP, CPP2 and EI figures; results are illustrative and exclude income tax withheld.
7. Step 5: Run Payroll and Remit on Time
| Task | Deadline |
|---|---|
| Pay employees and give pay statements | Every regular payday |
| Remit CPP, EI and income tax (regular remitter) | 15th of the month after the pay date |
| WSIB premiums | Monthly, quarterly or annually depending on payroll size |
| Record of Employment (ROE) | Within five calendar days after an interruption of earnings, for electronic filers |
| T4 slips and summary | Last day of February following the calendar year |
Late remittances are expensive: the CRA charges a penalty of 3% to 10% depending on how late the payment is, plus interest. Schedule each remittance the day you run payroll so the money never sits in your operating account.
8. Step 6: Records, Bookkeeping and Year-End
- Keep payroll records: hours, pay rates, deductions, vacation and public holiday pay, generally for six years for the CRA and at least three years under the ESA.
- Post payroll to the books: record gross wages, employer contributions and remittance liabilities separately each pay run.
- Reconcile monthly: the payroll liability account should equal what you owe the CRA after each remittance.
- Track vacation accruals so vacation pay owed on termination isn't a surprise.
- Review year-end: confirm T4 totals match the general ledger and the CRA's PD7A statement.
Payroll rules get more complex by industry. Hospitality businesses deal with tips and minimum wage changes, as covered in our article on fractional CFO services for restaurants in Vaughan, while clinics manage staff alongside physician overhead, as explained in our guide to bookkeeping services for medical clinics.
As your team grows, payroll becomes your largest cost. Our fractional CFO services build hiring budgets and cash flow forecasts, and our business plan services show lenders how new hires will grow revenue. If you're financing equipment or a new space alongside hiring, see our CSBFP loan package checklist.
9. Common First-Payroll Mistakes
- Paying the first employee before opening a payroll account, then scrambling to remit late.
- Treating an employee as a contractor to avoid paperwork.
- Forgetting the employer share of CPP and EI in the cash flow budget.
- Missing WSIB registration within 10 days of the first hire in a mandatory industry.
- Not paying vacation pay of at least 4% to hourly staff.
- Using last year's rates because the software wasn't updated in January.
- More general errors are covered in our guide to bookkeeping mistakes business owners keep making in Ottawa.
10. Frequently Asked Questions
How do I set up payroll for my first employee in Ontario?
Register a payroll (RP) program account under your CRA business number, register with WSIB if your industry requires it, collect the employee's SIN and federal and Ontario TD1 forms, choose a pay schedule and payroll software, then deduct CPP, EI and income tax each pay and remit them, with your employer share, to the CRA by the due date.
How much does it cost to hire an employee in Ontario?
Beyond wages, employers pay their own share of CPP (5.95% of pensionable earnings above $3,500 in 2026, plus CPP2 on higher earnings), EI premiums at 1.4 times the employee rate of 1.63%, WSIB premiums where coverage applies (an average of $1.23 per $100 of payroll in 2026), and any benefits. For a $60,000 salary that typically adds roughly 9% to 15%.
When do I need to register for WSIB in Ontario?
Most businesses in industries where WSIB coverage is mandatory must register within 10 days of hiring their first worker, whether full-time or part-time. Some industries are not required to have coverage, so check your business's classification with WSIB before your first payday.
When are payroll remittances due to the CRA?
Most new employers are regular remitters, so CPP, EI and income tax deducted in a month, plus the employer share, must reach the CRA by the 15th of the following month. Larger employers remit more often, and some small employers with a perfect compliance history can qualify to remit quarterly.
Do I have to pay vacation pay in Ontario?
Yes. Under Ontario's Employment Standards Act, most employees earn at least two weeks of vacation and vacation pay of at least 4% of wages each year, rising to three weeks and 6% after five years with the same employer. Vacation pay is pensionable and insurable, so CPP and EI apply to it.
Summary
Before your first Oakville hire is paid, open a payroll account under your CRA business number, register with WSIB if required, collect the SIN and TD1 forms, and set up payroll software with 2026 rates: CPP at 5.95%, EI at 1.63% (1.4 times for employers) and the $17.95 minimum wage. Budget roughly 9% to 15% above wages, remit by the 15th of each following month and keep clean records. Get it right once and payroll runs smoothly as your team grows.
Get payroll right from day one
Ledgerive sets up and runs payroll for startups in Oakville, Burlington, Mississauga and across Ontario. Book a free 30-minute call or reach us directly.
Sources: 2026 CPP, CPP2 and EI figures; WSIB, 2026 average premium rate; Ontario, Mandatory information for employees; Ontario minimum wage increase to $17.95. Confirm rates with the CRA's payroll deduction tables; calculator results are illustrative.