Economical Weekly Payroll Services for Canadian Businesses

For the 2026 tax year, federal rates are 14% on the first $58,523 of taxable income, 20.5% from there to $117,045, 26% to $181,440, 29% to $258,482, and 33% above that. Each rate applies only to the income inside its own band, so moving into a higher bracket does not raise the tax on the income below it. Provincial or territorial tax is added on top.

The business number is the single identifier the CRA uses for your business, with a separate programme account opened under it for each obligation: GST/HST, payroll deductions, corporate income tax, import and export. Register through Business Registration Online, by phone or by mail, or receive one automatically when you incorporate federally. You need it before you can remit payroll or file GST/HST. Provincial registration is separate in some provinces, notably Quebec, where Revenu Québec administers its own accounts.

Multiply the pre-tax price by the rate that applies where the sale happens. In Ontario that is 13% HST for 2026; in Alberta 5% GST; in British Columbia 5% GST plus 7% PST, each applied to the same base. Quebec is the exception, where 9.975% QST is charged on the pre-GST price, giving 14.975% combined. To back the tax out of a tax-included price, divide by one plus the rate.

Federally, no. Employer contributions to a private health services plan covering medical, dental and hospital care are not a taxable benefit, so they do not show up in your income. Quebec taxes them provincially, which is why a Quebec slip can show an amount the federal one does not. Premiums you pay yourself, including the employee share deducted from pay, can count as medical expenses on your T1. Group life and some wage-loss plans are treated differently.

They tell an employer or pension payer how much tax to hold back from each payment. You list the credits you expect to claim for the year on one federal return and one for your province, payroll converts that total into a claim code, and the deduction follows. The federal amount everyone starts from is the basic personal amount, $16,452 for 2026, tapering once net income is high. Claim with one employer only if you have several jobs.

Your employer withholds income tax, CPP and EI. For 2026, CPP is 5.95% on earnings between the $3,500 basic exemption and the $74,600 ceiling, plus CPP2 at 4% on earnings up to $85,000, and EI is $1.63 per $100 of insurable earnings up to $68,900. Income tax withheld depends on your pay, your province and the credits you claimed on the personal tax credits return given to your employer. Federal rates for 2026 start at 14%.

In Canada, tax revenue funds public services rather than a single account. Federal revenue pays for elderly benefits, the Canada child benefit, health and social transfers to the provinces, defence, debt interest and federal operations; employment insurance is funded separately by premiums. Provincial and municipal taxes fund health care delivery, schools, roads, policing and waste collection. Actual amounts appear each year in the federal budget and the Public Accounts of Canada, and in each province's budget.

A supplementary or omitted bill comes from your municipality when the assessed value of a property changes part way through a year, usually after new construction, an addition, a major renovation or a change of use, or when the property was left off the assessment roll earlier. It charges tax on the added value from the date it took effect, so one bill can cover more than one year. If your lender pays your taxes, confirm whether this amount is included.

File as soon as you can. If you owe, the late-filing penalty is 5% of the balance owing plus 1% for each full month the return is late, to a maximum of 12 months, and compound interest runs on the unpaid amount. If you are due a refund there is no late-filing penalty, but benefit and credit payments such as the Canada child benefit can pause until the return is assessed. The 2025 deadline was 30 April 2026.

Scholarships, fellowships and bursaries are reported on your return, but the scholarship exemption often removes them from tax entirely. A full-time student in a qualifying educational programme can usually claim the exemption for awards connected to that programme, leaving nothing taxable. Part-time students get a narrower exemption, and post-doctoral fellowship income is treated as income. An award that is really payment for services counts as employment income and the exemption does not apply.

Owing money is not a criminal offence, so an unpaid balance alone does not lead to jail. The CRA collects it through interest, garnishment of wages or bank accounts, liens and offsetting benefit payments. Imprisonment only becomes possible where tax evasion or fraud is prosecuted in criminal court and a judge imposes a sentence, which follows a deliberate act such as concealing income or filing false records. Correcting a filing before the CRA contacts you generally avoids prosecution.

Have each new employee complete federal and provincial TD1 forms, then use the CRA payroll deductions online calculator or payroll software to work out income tax, CPP and EI for every pay period; a Quebec employee also needs Revenu Québec's calculator for Quebec provincial tax, QPP and QPIP, remitted to Revenu Québec and reported on an RL-1 alongside the T4. Remit the employee withholding together with the employer share by your assigned remitter due date, and report the totals on T4 slips after the calendar year ends. Late or short remittances attract penalties and interest.