So this is it. You need the help and you've decided to hire employees. This Hiring Process Guide explains exactly what you have to do to get your new employees working for you and on the payroll.
What You Need Before Hiring Employees in Canada
1) Get a business number (BN) and/or open a Payroll Deductions Account.
If you don't already have a Business Number, you will need to get one from the Canada Revenue Agency as an employer you will need to open a Payroll Deductions account.
To get a Business Number, you can contact the Canada Revenue Agency by phone at 1-800-959-5525, mail or fax, or register for a Business Number online.
If you choose to register by mail or fax, you will have to fill out Form RC1, Request for a Business Number (BN).
If you already have a Business Number, you are basically adding a new account to your existing ones. Call the Canada Revenue Agency at 1-800-959-5525 and ask for a Payroll Deductions Account.
(Note that a business can have more than one Payroll Deductions account. If you had different offices in different cities, for example, you might also have separate Payroll accounts for each office.)
The Hiring Process
This outlines the nitty-gritty of the actual hiring process; what you have to do legally to hire an employee in Canada when you have decided you want to hire a person. These are the steps you need to take after you’ve gone through the whole preliminary hiring process of creating or refining a job description, advertised the job position(s), and interviewed prospective candidates. All of that is behind you.
You make the person an offer of employment. Now you have to:
1) Have the employee accept and sign the job offer.
The government doesn't require this but I think it's an excellent idea to have the terms of work in writing. It clarifies details such as the job duties, work hours, benefits, salary and probationary period if there is one and avoids future misunderstandings. (Of course when hiring employees, your job offer has to meet the employment standards of your province or territory.) See:
2) Examine the employee's Social Insurance Number (SIN).
The Social Insurance Number is used to administer government benefits. As an employer, you need to view every new employee's SIN card within three days of the employee starting work and record the employee’s name and SIN exactly as they appear on the card.
Watch for SINs that begin with the number "9"! A SIN starting with this number signals a person who is not a Canadian citizen or permanent resident and who is authorized to work only for a particular employer with a valid employment authorization issued by Citizenship and Immigration Canada.
(If a prospective new employee is eligible to work in Canada and does not have a SIN, direct him or her to apply for one at a Service Canada Office.)
3) Have the employee fill out Form TD1, Personal Tax Credits Return.
Form TD1 determines how much tax is to be deducted from a person's employment income. A new employee has to complete the federal TD1 and the provincial TD1 if more than the basic personal amount is claimed.
(Note that in Quebec, employees need to use the federal TD1 and provincial Form TP1015.3-V, Source Deductions Return.) See Filing Form TD1 for more details on who has to complete this form and which form they can or should use (Canada Revenue Agency).
4) Review the starting date and time and any other information pertinent to the person's first day of employment.
Is the new employee's day going to start with a meeting with a supervisor or a tour of the facility? Is there any special equipment she has to bring or a dress code she needs to adhere to? Is there a new employee orientation session or in-house mentoring? Filling the new employee in on whatever details pertain to her first day on the job will relieve her anxiety and get you both off to a good start.
5) Start a file for the employee if you haven't already.
It's a good idea to do this right away when hiring employees. As an employer you're going to collect employee records such as time sheets and performance evaluations and manage forms related to running payroll such as T4 slips. (See my Guide to Canadian Payroll Deductions for step by step information on how to run payroll in compliance with the Canada Revenue Agency.) Getting your employee records off to an organized start will save time later.