A subcontractor is a self-employed person or business you hire to help on a job. They work for you temporarily, use their own tools, set their own schedule, and invoice you for their work. They are NOT your employee — this is an important distinction for tax purposes.

No. Unlike employees, you pay subcontractors the full amount they invoice you. No CPP, no EI, no income tax deductions. That's their responsibility to handle on their own taxes. You just pay the invoice.

A T4A is a slip you send to CRA and the subcontractor at the end of the year showing how much you paid them. You only need to issue a T4A if:

• You paid them more than $500 in the calendar year, AND
• They are an unincorporated individual (not a registered company)

If your subcontractors are registered businesses with their own HST number and invoice you formally — you generally do NOT need a T4A. Just keep their invoices on file as your business expense records.

When in doubt, ask your subcontractor if they are incorporated or have a business number. If yes — no T4A needed.

• Keep every invoice they send you — this is your proof of the business expense
• Keep a record of how much you paid each one per year (this app does that)
• Note their business name, HST number if they have one, and contact info
• CRA can audit up to 6 years back, so keep records for at least 7 years

Before your employee's first day you need to:

• Register for a CRA Payroll Account — go to canada.ca, log into your CRA My Business Account, and add a payroll (RP) account. It's free and takes about 10 minutes. This is separate from your regular business number.
• Have your employee fill out a TD1 form — this tells you how much federal and provincial tax to withhold. Download it from canada.ca/td1.
• Register for WSIB if you haven't already — employees must be covered.

Each time you pay your employee, you need to calculate and deduct three things from their gross pay:

• CPP (Canada Pension Plan) — a % of their gross pay goes toward their pension
• EI (Employment Insurance) — a % of their gross pay goes toward EI
• Income Tax — based on their income level and TD1 claim amount

The easiest way to get the exact amounts: use the CRA Payroll Deductions Online Calculator at canada.ca/pdoc — just enter their province, pay period, and gross pay and it spits out exactly what to deduct. Free, official, and accurate.

Pay them their net pay (gross minus the three deductions). Give them a pay stub showing gross pay, each deduction, and net pay. You hold onto the deductions — that money belongs to CRA.

By the 15th of the month following each pay period you must send CRA:

• The CPP you deducted from your employee PLUS an equal amount from yourself (you match it dollar for dollar as the employer)
• The EI you deducted from your employee PLUS 1.4× that amount from yourself
• The income tax you deducted — you don't pay extra on this one

Example: If you deduct $100 CPP and $50 EI from your employee, you send CRA: $200 CPP ($100 + $100 match) + $120 EI ($50 + $70 employer share) + whatever income tax you withheld. Pay online through your CRA My Business Account.

• Issue a T4 slip to your employee showing their total annual earnings and all deductions
• File a T4 Summary with CRA (the total of all your T4s)
• The Year-End Summary table in this app gives you all the numbers you need — just hand it to your accountant or use it to fill in the slips yourself on CRA's website

• Missing a remittance deadline = 3–10% penalty on what you owe, plus interest
• Missing T4 filing deadline = $100 minimum penalty per slip
• Not registering for payroll before hiring = possible audit and back-penalties