Hiring your first employee at a Canadian dental practice

There’s a particular moment most dental practices recognize: you’re booked up, you’re running behind, patients are waiting longer, and it’s clear the practice has outgrown what one person can manage. Bringing on your first employee is the obvious answer. To transition from a solo operator to an employer in Canada, you must register for a Canada Revenue Agency (CRA) payroll account, determine if your new team member is an employee or a contractor (like an associate), and implement a payroll solution that handles deductions and remittances automatically.

The good news is that it’s all very manageable once you know what’s involved.

This guide walks you through the decisions, the documentation, and what those first few paydays look like as you grow your practice.

Is your dental practice really ready to hire?

Hiring is not just about adding capacity, it’s about building a system that can support growth. A wrong hire affects patient experience, clinical workflow, and cash flow simultaneously. Before you move forward, it’s worth pressure-testing a few things:

• How do you know when to hire your first employee at a dental practice? A sustained increase in patient volume or a reliable block of unfilled hours is a stronger signal than a few busy weeks. Hiring based on short-term pressure can create longer-term payroll obligations you’re not ready to carry.
• How much does it cost to hire a dental employee in Canada? Wages are only part of it. As an employer, you’re also responsible for your share of Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums on top of what your new hire earns. Budget for the total cost, not just the take-home number.
• What does a dental practice need to set up before hiring? Scheduling, onboarding, payroll, and day-to-day management all need some structure. Hiring your first employee is the moment your practice shifts from solo operator to employer.
• Should you hire a dental assistant or receptionist first? If your chair time is full and you’re turning patients away, a clinical hire makes sense. If billing errors or scheduling gaps are slowing things down, an administrative hire may have a bigger impact. The role you choose will shape not just your operations, but how your payroll needs to be set up.

Pro tip: Dentists often work across two chairs for efficiency, but without a dental assistant handling turnover and prep, things slow down quickly. That’s a hire you need to make before you expand, not after.

Employee or contractor? Getting the classification right 

How you classify your team is one of the most important decisions in dental office payroll. It determines whether you deduct and remit payroll taxes on their behalf, whether employment standards apply, and what your exposure looks like if the Canada Revenue Agency (CRA) ever audits the relationship.

The special case for associate dentists

Many practices treat associates as independent contractors, but the CRA assesses classification based on the actual nature of the working relationship rather than a checklist. It can feel subtle, but knowing the difference between an employee and a contractor is important and a key part of keeping your business’s books and workers and the government happy.

If you’re unsure, reference the CRA’s guidance on employees vs self-employed individuals to help understand how to decide a worker’s employment status. 

Full-time, part-time, or somewhere in between 

One question that comes up often is whether part-time staff are treated differently. The short answer is no. 

A dental assistant working two days a week is an employee with the same entitlements as a full-time one. Vacation pay, CPP, and EI all apply, calculated on their actual earnings and hours. Part-time status doesn’t reduce your obligations as an employer, and it doesn’t move someone closer to contractor territory. The employee vs. contractor distinction is about the nature of the working relationship, not the number of hours worked.

What an employee actually costs, beyond wages

 One of the most common surprises for first-time employers is how much employment costs beyond salary or hourly pay. Once you hire someone, you are responsible for:

• CPP and CPP2 contributions — both you and your employee contribute, and you remit both shares to the CRA
• EI premiums — same two-party structure, with your employer share calculated on top of what you deduct from the employee
• Vacation pay — most provinces require a minimum of 4% of gross earnings
• Statutory holiday pay — calculated on a formula that varies by province

Overtime rules, minimum wage, and stat holiday eligibility also vary depending on where your practice operates. These costs are not optional. They are part of being an employer, and they need to be factored into your hiring decision upfront.

Before day one: what you need to set up as an employer

Before your first employee starts, there are a few key things you need in place to run payroll properly. 

1. Register for a CRA payroll account

To pay employees in Canada, you need a payroll program account linked to your business number. This is what allows you to remit income tax, CPP, and EI to the CRA.

2. Register for workers’ compensation

Each province requires employers to register with their workers’ compensation board. This is separate from the CRA and one of the most commonly missed steps for first-time employers. In Ontario, this is the Workplace Safety and Insurance Board (WSIB). In British Columbia, it is WorkSafeBC. Every province has its own equivalent.

Premiums are employer-paid and based on your insurable payroll and industry classification. If you miss this step, you may be required to pay back premiums and penalties.

3. Decide how you will run payroll

You have three main options:

• Manual payroll using CRA calculators
• Working with an accountant or bookkeeper
• Using payroll software

For a single employee, manual payroll can work. As your team grows, most practices move to payroll software or a provider to reduce risk and save time. Tools like Wagepoint are designed to handle calculations, remittances, and year-end reporting for you, so you’re not managing it all manually.

4. Choose a pay schedule

Your pay schedule affects how often you process payroll, common options include biweekly or semi-monthly. 

5. Set up how you’ll send payroll taxes to the CRA

You will need a process for sending deductions to the CRA on time, whether through online banking, pre-authorized debit, or your payroll provider.

These steps don’t take long, but they are essential. Without them, you cannot run payroll compliantly.

Before first payroll: what to collect from employees

Before you can process payroll, you need to collect a few key details from your employee.

• Legal first and last name
• Date of birth
• Hire date
• Social Insurance Number
• Current address
• Completed TD1 forms, both federal and provincial
• Banking information for direct deposit
• Confirmed vacation entitlement and paid time off amounts

The TD1 is what tells you how much income tax to withhold based on each employee’s personal tax credits. It can drift out of date as personal circumstances change, so a quick annual reminder to your team to review it is worth building into your routine.

For contractors: the same core information applies, except they don’t complete a TD1. If they’re incorporated, you’ll need their business number rather than a Social Insurance Number.

Getting this right from the start

Hiring your first employee changes the scope of what you’re responsible for day to day. You’re no longer just running a practice, you’re employing someone, which comes with expectations around how they’re paid, how things are documented, and how consistently everything is handled.

Getting the basics in place early makes that shift much easier to manage, and the day-to-day becomes predictable. To help that shift, tools like Wagepoint can handle the calculations, remittances, and year-end reporting as your team grows. 

Learn more about how Wagepoint can help you set up and run payroll with confidence here.