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Hiring your first worker in Ontario

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Are you a budding entrepreneur just preparing to hire your first employee?  Here are some of the steps you should consider.

Letter of Offer

It is always recommended to establish the foundation for employment with your company by providing your new employee with a letter outlining the terms of their employment with you. CFIB has a sample Letter of Offer which you can customize for your new employee and have them sign confirming that they understand what you are offering. Just ask a CFIB Business Counsellor for a sample Letter of Offer, by calling 1 888 234-2232.

Employee Contract

CFIB has some helpful information when hiring an employee which includes a sample Employment Contract. Have a look at the write-up on Reducing Employment Termination Exposure. Sometimes it may not be clear whether a worker is an employee or self employed. For clarification on this, please see the Canada Revenue Agency document Employee or Self-Employed

Payroll

    It will be necessary to open an account with Canada Revenue Agency (CRA) for your payroll deductions that you will make from your employee's pay cheque. To open an account contact Canada Revenue Agency at 1 800 959-5525. You will need to have your employee complete a TD-1 in order to determine how much income tax to deduct. Do not send the TD-1 to Canada Revenue Agency. It is for your records only.  In addition there is the TD-1ON specifically for Ontario. You will also need to make the other necessary deductions from your employee's wages, such as Employment Insurance and CPP. Some of these deductions have an employer's portion that must be paid. CRA has an on-line payroll deductions calculator to help you determine these deductions. 

    Workers Compensation or WSIB

    Depending on your provincial requirements, it may be necessary to open an account with the Workers' Compensation or WSIB and pay premiums on behalf of your employee. These premiums must be paid by the employer and cannot be deducted from the employee's wages. For information on registration, please see the WSIB website or call 1 800-387-8638.

    Employment Standards

    As an employer you will need to familiarize yourself with Employment Standards, which are the rules surrounding a worker's employment with you. They include vacation pay, regular hours, calculating overtime, statutory holiday and more. Contact your local Ministry of Labour office for guidelines to Employment Standards  at 1 800-531-5551.