The CRA Business Number and Its Accounts: What You Actually Need to Register

The business number is a single nine-digit identifier for your business with the CRA. Everything else hangs off it as a program account, and each account is opened separately, only when you need it.

That structure confuses people into either registering for nothing or registering for everything. Both are avoidable.

How the number is built

A business number looks like this:

123456789 RT 0001
└───────┘ └┘ └──┘
    │      │   └── account reference: 0001, 0002 for a second of the same type
    │      └────── program identifier: which account this is
    └───────────── your nine-digit business number, one per business, forever

The nine digits never change. You add program accounts to them as your obligations arrive.

The four you are likely to meet

Others exist for import/export, excise and specific industries, but most small businesses only ever touch these.

RT, the GST/HST account

Mandatory once your worldwide taxable revenue exceeds $30,000 across four consecutive calendar quarters. That test is gross revenue, not profit, and it includes associated businesses.

Register voluntarily below the threshold when your clients are businesses, since they recover the tax and your effective price is unchanged, or when you have meaningful startup purchases whose input tax credits you want back.

Register at around $27,000 rather than waiting to be forced, because exceeding the threshold obliges you to charge tax from a date that is usually behind you. Full detail in GST/HST registration.

RP, the payroll account

Required before your first pay run, and that includes paying yourself a salary from your own corporation.

Withholdings are remitted on a schedule set by your average monthly withholding amount, typically by the 15th of the following month for a new employer. The penalty for late remittance is calculated on the full remittance, not the shortfall.

A corporation paying its owner only dividends does not need an RP account. That administrative saving is one of the practical arguments in salary vs dividends.

RC, the corporate income tax account

Created for you when you incorporate federally or provincially and the registration flows through to the CRA. Occasionally it does not, and the first sign is a demand to file for a year you did not know you owed a return for.

Check that it exists in your CRA My Business Account rather than assuming. A corporation files a T2 every year even with no activity and no tax payable.

RZ, the information returns account

Needed for T5s (dividends and interest), T5018s (construction subcontractors) and several other slips. Sometimes issued automatically alongside another account, sometimes not.

If your corporation pays you dividends, you need to be able to file a T5. See T4 and T5 slips.

The frequency is assigned to you, and it is worth checking

Opening an account is the easy half. What most people never look at is the frequency the CRA attached to it, which is set by formula and is not always the one you want.

GST/HST reporting periods are assigned by revenue, and you can generally elect to file more often than required. Filing annually is less work and holds the money longer; filing quarterly catches errors while they are still small and suits a business in a refund position. The filing deadlines follow the period:

That last row is the one that bites. A sole proprietor who reads “annual filer” and works to the June date pays interest from May 1, which is the same mismatch that runs through the personal filing deadlines. Note also that returns are now filed electronically by nearly every registrant, with a penalty for paper.

Payroll remitting frequency is set by your average monthly withholding amount from two calendar years ago. A new small employer with a clean compliance record can be a quarterly remitter; a regular remitter pays by the 15th of the following month; above the accelerated thresholds you remit twice a month, then up to four times a month. Growing past a threshold changes your due dates without anyone telling you.

Incorporating does not carry your number over

A sole proprietor who incorporates is not the same person to the CRA. The corporation is a new legal entity and gets its own nine-digit business number, with its own RT, RP and RC accounts.

What goes wrong is the overlap. The proprietorship’s GST/HST account keeps expecting returns until it is closed, the corporation starts invoicing under a number nobody registered, and payroll gets remitted to the old account for months. Open the corporate accounts, move billing to the new GST/HST number on a clean date, then close the old accounts with a final return.

Multiple accounts of the same type

The trailing four digits allow more than one of each. Two divisions with separate GST/HST reporting would be RT0001 and RT0002.

Most small businesses never need this. If someone suggests it, ask what problem it solves.

Sole proprietors: you may not need one at all

A sole proprietor under the GST/HST threshold, with no employees, generally needs no business number. You report business income on your personal return using your SIN, on form T2125.

You need one the moment you register for GST/HST or hire someone. Not before.

Registering

Online through Business Registration Online, or by phone. Free, and quick.

Two things to have ready: your SIN if you are a sole proprietor, and your legal business name and structure. For a corporation, the incorporation details.

Worth being clear about what that name is doing for you, which is less than most owners assume: registering a business name is not owning it, and neither a business number nor a name registration gives you any rights in the brand.

Five costly errors, from late GST/HST to dormant accounts

Registering for GST/HST too late. Costs real money because you cannot usually recover tax from clients after the fact.

Registering for GST/HST unnecessarily when your customers are individuals. Adding 13% to a consumer price is a real price increase and you now file returns forever.

Paying yourself a salary with no RP account. The remittances have nowhere to go, and the penalties for late remittance are the harshest in the small business system.

Assuming the RC account exists. Check it.

Ignoring an account you no longer use. An open GST/HST account expects returns whether or not you have revenue. Nil returns are still returns, and failing to file them generates demands. If a line of business ends, close the account deliberately.

Register only the accounts you trigger, and close the rest

1. Decide which of RT, RP, RC and RZ your business will actually trigger
2. Register only those, when they trigger
3. Confirm each account appears in CRA My Business Account
4. Set the filing frequency deliberately rather than accepting the default
5. Close accounts you stop using

Every account you open adds a return with a date attached. Once the list runs to three or four, it is usually the point at which owners hand the filings, and the reconciliation behind them, to a monthly bookkeeping arrangement.

If you are unsure which accounts your situation requires, it is a ten-minute question and an expensive one to answer by guessing.