As your small business grows, the ability to hire your first employee is a major milestone. However, once you have employees on the payroll, your company must follow certain criteria to stay compliant with Revenu Québec.
What Do I Need to Do When I Hire my First Employee?
To legally work for your company, your employee should have a social insurance number (SIN). This ensures Canada Revenue Agency (CRA) can help your employee with employment insurance and register them for the Canada Pension Plan. With the SIN, CRA deducts taxes and pays applicable tax credits.
In Québec, you must also ask your employee to fill out form TP-1015.3-V, Source Deductions Return. This form enables you to generate a source deduction code for your worker.
What If I Hire my First Employee and he or she is a Student?
If your first employee is a student, you, as the employer, must still make source deduction and pay the proper employee contributions if one more more of the basic conditions are met. Therefore, the student fills out form TP-1015.3-V if he or she works for your Québec business, does not work for you in Québec but is paid from your Québec office, or if the employee lives in Québec.
However, if your first employee is under 18, you do not have to collect or remit Québec Pension Plan contributions.
Dealing with Exceptions and A-typical Situations
Of course, when you hire your first employee, it’s not always as simple as filling out a form and calculating deductions.Let’s say the employee is on a phased retirement plan, your place of business is undergoing an ownership change or succession, or the type of employment is specialized (armed forces, artist, foreign farm worker, etc.). Then, different rules and exemptions apply. To help you determine what source deductions you need to make, Revenue Québec has a renumeration schedule you can consult.
How AF Accounting Helps
Taxes, tables, remittances, deadlines! If this is something you enjoy fitting in during your busy work day, you’ll love all the paperwork that happens when you hire your first employee! However, if you’d rather spend your time on the parts of the business you know best, turn to AF Accounting instead.
We focus on helping small businesses with their bookkeeping and accounting needs; therefore, we have the staff, expertise, and experience to ensure your business stays compliant when your hire your first employee. We are also here for you as your business grows and changes, ensuring that every step of the way you get the accounting and tax help you need.
Our services are à la carte, meaning you only pay for what you need, when you need it. We also offer a variety of modern solutions, including cloud-based Xero accounting and specialized software for Amazon resellers.
No matter what business you run in Canada, AF Accounting can help. Contact us today if you are ready to hire your first employee, or if you have any other bookkeeping or accounting needs.
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