The summer rush tends to show up a little ahead of schedule. One week the calendar looks manageable, and the next there is more work than your current team can cover. For a lot of Grande Prairie businesses, the fix is familiar: a student home from school for a few months, or a seasonal worker brought on to carry the busy stretch.
Adding people to the team is one of the better problems a business can have. It also comes with a short set of obligations. Handled in June, they take an afternoon. Handled in October, after the fact, they tend to arrive as back-owed remittances and a letter from the Canada Revenue Agency. The gap between those two outcomes is almost entirely a matter of sequence: doing a few small things, in the right order, before the first paycheque goes out.
First, open a payroll account
The starting point is a CRA payroll program account, the one with “RP” in the number. Any business that pays salary, wages, or tips is considered an employer, and an employer needs this account before remitting a single dollar of deductions.
Registration is faster than most people expect. Using the CRA’s Business Registration Online system, it is often completed quickly, sometimes the same day. To get through it in one sitting, have a few things ready:
- Your nine-digit business number, legal name, and business address
- The date your new hire will receive their first wages
- Your expected pay period (weekly, biweekly, and so on) and rough total payroll
This is also the step that gets skipped most often. A business owner gets busy, hires someone, runs payroll, and only later learns the account should have come first. By then the missed remittances have been quietly stacking up. Opening the account early removes that risk entirely. If you are also setting up online access to manage the account, our guide to setting up your My Business Account walks through it.
Know what comes off each cheque
Once the account is open, every paycheque carries three deductions: Canada Pension Plan contributions, Employment Insurance premiums, and income tax. You withhold these from the employee, add the employer’s share of CPP and EI, and hold the total in trust for the government.
That phrase, in trust, matters. The money is never really the business’s to spend. It belongs to the Receiver General, and your job is to pass it along by the due date, usually the fifteenth of the month after you withheld it. Missing that date is one of the most common and most avoidable ways businesses run into trouble. Our post on avoiding CRA penalties and interest covers what those slips actually cost.
The CRA publishes the current rates and a free payroll deductions calculator, so you are not estimating by hand.
Employee or contractor? For most summer hires, employee
It can be tempting to label a short-term worker a contractor and skip the payroll steps. Resist that. The CRA does not care what the arrangement is called; it looks at the actual relationship, including who controls the work and who supplies the tools. For most traditional summer student arrangements, a worker putting in your hours, at your shop, with your equipment, will usually be considered an employee. Getting this wrong is expensive to unwind. We break down the test in should I hire an employee or contractor.
The summer wage detail worth knowing
Alberta has a reduced student minimum wage of $13 per hour, and many employers assume it applies to anyone in school. It does not apply over the summer. That lower rate is limited to students under 18 working 28 hours or fewer during the school year. Once school is out, or once a student passes 28 hours in a week, the general minimum wage of $15 per hour applies. Plan your summer budget around $15, not $13.
Vacation pay applies too. Even a worker on for only two or three months earns it. Under Alberta Employment Standards, the minimum is 4 percent of wages for the first years of employment, and many employers handle a short-term hire cleanly by adding that 4 percent to each paycheque. If you pay it out this way, identify the vacation pay as a separate line on the pay statement rather than folding it silently into the hourly total.
A few rules for younger workers
If your summer hire is under 18, a set of provincial rules comes into play, and they vary by age and by the type of work. Some workers aged 13 and 14 may require written consent from a parent or guardian, and certain jobs may require an Employment Standards permit. Some kinds of work are restricted or prohibited outright for younger workers, there are limits on hours, and every employer is expected to assess and control workplace hazards for staff under 18. Because the details shifted with recent changes to Alberta’s youth employment rules, check the specifics rather than assuming. The Government of Alberta’s youth employment laws page lays out exactly what applies by age.
If you are bringing on a teenager and wondering about perks like a gift card or a small bonus at the end of the season, our note on gifts to employees explains how the CRA treats those.
Set it up once, benefit every summer
Here is the part worth holding onto. The work of a summer hire is front-loaded. Open the account, set the deductions, classify the worker correctly, and the rest of the season runs itself. Next summer, the account already exists and the routine is familiar.
Keeping clean records as you go is what makes that true. Solid bookkeeping through the season means next spring’s tax filing inherits an organized year instead of a pile of guesswork. A summer hire should make your business feel lighter, not heavier. Done in the right order, it does.
If you would like a hand getting payroll set up before your first summer paycheque, our team in Grande Prairie is glad to walk through it. Call us at 780-539-3400 or email [email protected].