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CRA Payroll Account Setup — Bornara AI

Owner: Mahdi Moradi Status: To-Do — set up before next Narjes payment Version: 1.0.0 Last Updated: 2026-04-29 Applies To: Bornara AI (sole proprietorship) paying Narjes Ali Ahmad

Why You Can't Find Payroll in CRA My Business Account​

CRA payroll is a separate program account (suffix RP) that you must register on top of your existing BN (Business Number). A new sole proprietorship registered through Wealthsimple or as a self-employed T2125 filer does not get an RP account automatically — you have to add it.

Your business has program accounts like this:

123456789  RT0001   GST/HST          (only if you register — you have NOT, under $30k)
123456789  RP0001   Payroll          ← THIS is what you need to add
123456789  RC0001   Corporate tax    (corporations only — N/A for sole prop)

If you only see your personal SIN-based My Account and a T2125 filer profile, you have no payroll account yet.

Two Paths Forward​

Path A — Pay Narjes as a Contractor (recommended for now)​

No payroll account needed. Narjes invoices Bornara AI as an independent contractor.

Requirements:

  • She controls her own hours/methods (she does).
  • She has (or could have) other clients.
  • She uses her own tools (her own kitchen until commercial space; recipes are hers).
  • Written agreement stating she is a contractor, not an employee.
  • She invoices Bornara AI for hours worked.
  • Bornara AI pays the invoice from RBC Business → her personal account.

Year-end:

  • Issue T4A by Feb 28, 2027 if you paid her $500 or more in 2026 (Box 048 — Fees for services).
  • She reports the income as self-employment on her own T1 (or T2125).
  • She is responsible for her own CPP (both halves) and her own income tax.
  • No source deductions, no remittances, no T4.

Risk: CRA can later re-classify her as an employee if the relationship looks employer-like (control over schedule, integration into your business, exclusive work for you, you provide all the tools/equipment). For early-stage cookie work where she sets the recipes and runs her own kitchen, contractor classification is defensible.

Action items:

  1. Have Narjes send a simple invoice for 105 hours × $20/hr = $2,100 for Feb–Apr 2026.
  2. Pay from RBC Business by e-transfer or cheque.
  3. Keep the invoice in business/cra/invoices-received/2026/.
  4. Add expense entry under project: cookies, category contractor.

Path B — Register Payroll (RP) Account and Pay Her as Employee​

Use this once Narjes is full-time on cookies in your kitchen using your equipment.

How to register:

Option 1 — Online via My Business Account (fastest)

  1. Sign in: https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-businesses/business-account.html
  2. Make sure your BN is showing.
  3. Click "Manage program accounts" → "Add a program account".
  4. Choose "Payroll deductions and contributions (RP)".
  5. Answer the wizard:
    • First remittance date (use the date of first paycheque).
    • Estimated annual payroll (use ~$10k–14k for Narjes alone in 2026).
    • Frequency of pay (monthly recommended for one part-time worker).
    • Number of employees (1).
  6. RP number is issued immediately, e.g. 123456789RP0001.

Option 2 — Phone

  • Call 1-800-959-5525 (Business enquiries).
  • Say "I'd like to add a payroll program account to my Business Number."
  • Have your BN, name, address, and first remittance date ready.

Option 3 — Business Registration Online (BRO)

After registering — what you must do every pay run:

  1. Calculate gross pay (hours × $20).
  2. Use CRA Payroll Deductions Online Calculator (PDOC) to compute:
    • CPP contribution (employee + employer halves)
    • EI premium (employee + employer 1.4×)
    • Federal & Alberta income tax
  3. Pay Narjes the net amount.
  4. Remit the deductions + employer share to CRA by the 15th of the following month.
  5. File T4 slip by Feb 28, 2027, plus T4 Summary.

Costs of being an employer:

  • Employer CPP match: ~5.95% of pensionable earnings.
  • Employer EI: 1.4× the employee EI premium (~2.32% of insurable earnings).
  • Time/effort: ~30 min per pay run + year-end T4.
  • WCB Alberta — for cookie/kitchen work, registration may be required; check https://www.wcb.ab.ca/ ("Do I need to register?" wizard).

Decision Matrix​

FactorContractor (T4A)Employee (T4 + RP)
Setup time0 min~20 min online
Per-pay overheadNonePDOC + remittance
Year-end formT4A (one box)T4 + Summary + ROE on exit
Employer cost$0 above pay+~8% (CPP + EI)
Audit riskRe-classification possibleNone
Best forPre-launch hours, recipe devSteady ongoing kitchen work

Recommendation for 2026: Path A (contractor) until cookie revenue exceeds ~$2,000/mo and Narjes is doing daily kitchen production. Then switch to Path B.

Once Path A is Done​

  • Create a Narjes contractor agreement (one page, signed by both).
  • Save in business/contracts/narjes-contractor-agreement-2026.pdf.
  • Have her open a separate notebook or spreadsheet to track hours she invoices.
  • Each month: Narjes sends invoice → Bornara pays → file invoice → log expense.