Payroll Account (RP)

Definition

A payroll program account is the CRA identifier that lets a corporation remit Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and federal and provincial income tax withheld from employees. It is represented by the RP suffix on the nine-digit Business Number (BN), for example 123456789 RP 0001. The four-digit reference at the end distinguishes multiple payroll accounts under the same BN (for example, separate accounts for different operating divisions).

Key rules

• The obligation to open the account is triggered the first time the corporation pays salary, wages, bonuses, vacation pay, tips, or most taxable benefits to an employee, as set out in Income Tax Act s.153(1).
• The account must be registered before the first remittance due date (generally the 15th of the month following the first pay period).
• Ways to register: online through My Business Account, by calling CRA Business Enquiries at 1-800-959-5525, or by completing Form RC1.
• When the account is opened, CRA assigns a remitter type based on the corporation's average monthly withholding amount (AMWA). The four types and their thresholds are covered in remittance frequency.
• A director of a corporation can be personally liable under Income Tax Act s.227.1 and CPP s.21.1 for unremitted source deductions, including interest and penalties.
• Payments to true independent contractors do not require a payroll account, but CRA applies the common-law and control tests from RC4110 to reclassify workers who are effectively employees.

Example

A BC-incorporated consulting company hires its first employee on June 10, 2026, with a first pay date of June 20, 2026.

1. The director registers for an RP account in My Business Account on June 12, receiving 987654321 RP 0001.
2. On June 20, the company runs the first pay cycle, withholding CPP, EI, and federal and BC income tax.
3. Because the company is a new (regular) remitter, the June withholdings are due by July 15, 2026, paid through online banking using the BN plus RP suffix as the payee account.

Common mistakes

• Waiting until T4 season to register. CRA applies a 10% failure-to-deduct penalty on amounts that should have been withheld at source.
• Using a personal SIN instead of the corporation's BN when remitting.
• Opening a single RP account for multiple legal entities. Each corporation needs its own BN and its own RP.
• Confusing the RP account with the RT (GST/HST) or RC (corporate income tax) account. They are separate CRA programs under the same BN.
• Closing the RP account by simply stopping remittances. The corporation must file a nil T4 summary and request closure, otherwise CRA continues to expect monthly filings.

Related concepts

Once the RP account is live, the mechanics fall into place: TD1 forms set the withholding base, CPP, EI, and income tax are calculated each pay cycle, and the combined amount is sent to CRA with a PD7A voucher. Year-end reporting flows to T4 slips.