Introduction

One of the most common points of confusion for new and recently incorporated business owners in Canada is the alphabet soup of CRA account numbers. A business number, an HST account, a payroll account, a corporate income tax account — they are related but distinct, and understanding the difference is foundational to staying compliant.

The Business Number: The Master Identifier

A Business Number (BN) is a unique nine-digit identifier assigned by the CRA to a business or other entity. It is the master identifier — all other CRA accounts associated with a business are sub-accounts of the BN.

When a corporation is incorporated and registered with the CRA, it receives a Business Number. That BN identifies the corporation in all dealings with the CRA. It appears on correspondence, assessments, and account statements.

The BN itself does not indicate what types of accounts the business has — those are the sub-accounts described below.

The Corporate Income Tax Account (RC)

The corporate income tax account is automatically created when a CCPC or other corporation is registered with the CRA. Its account identifier takes the format 123456789 RC 0001.

This account tracks the corporation's T2 filings, tax assessments, payments, and balances owing. When the CRA issues a Notice of Assessment for a T2 return, it is reflected in this account. When a corporation makes an instalment payment or pays its year-end balance, it is applied here.

Every incorporated business has a corporate income tax account from the moment of incorporation.

The GST/HST Account (RT)

An HST (or GST) account is a separate sub-account that is opened when a corporation registers to collect and remit HST. Its identifier format is 123456789 RT 0001.

Registration for HST is mandatory once taxable supplies exceed $30,000 in any four consecutive calendar quarters. It is also available on a voluntary basis for businesses below this threshold that wish to claim input tax credits.

Once registered, the HST account is where the corporation's GST/HST returns are filed, amounts owing are tracked, and refunds are processed. It is separate from the corporate income tax account — HST payments and corporate tax payments are made to different accounts and should never be conflated.

The Payroll Account (RP)

A payroll account (identifier: 123456789 RP 0001) is opened when a corporation begins paying employment income to employees or to owner-managers. This account is used to remit source deductions — income tax, CPP, and EI — withheld from employee pay, along with employer CPP and EI contributions.

T4 slips, T4 summaries, and payroll-related correspondence are all associated with the payroll account. A corporation that does not pay any employment income does not need a payroll account.

The Import/Export Account (RM)

Less relevant to most small corporations, but worth noting: corporations that import or export goods may have an RM account for customs and tariff purposes. This is administered separately from the other sub-accounts described above.

Why This Distinction Matters

Confusion between these accounts is a surprisingly common source of compliance errors. Payments directed to the wrong account do not satisfy the corresponding obligation. A corporate tax payment made to an HST account number does not reduce the T2 balance owing. CRA customer service representatives can redirect misapplied payments, but this takes time — and late payments still accrue interest in the interim.

Similarly, a corporation that receives a request for information from the CRA relating to one of these accounts should confirm which account the correspondence relates to before responding. An HST audit is not the same as a corporate income tax review, and the documentation requested differs accordingly.

When to Speak With a CPA

If you are unsure which CRA accounts your corporation has open, or if you have recently incorporated and have not yet confirmed your account structure with the CRA, a CPA can review your CRA My Business Account profile and ensure the right accounts are in place for your activities.

Rotaru CPA helps incorporated business owners understand and manage their CRA account structure from the outset. Book a consultation to review your accounts.