# Tax Registration

> Tax registration is the process of enrolling a business, or the employer of record acting for it, with a country's tax authority so it can legally withhold and remit payroll taxes and social contributions on behalf of its employees.

Tax registration is the step that makes an employer visible to a country's tax authority and legally able to operate payroll there. Before a business can withhold income tax and social contributions from wages and pay them over, it must open the right accounts with the authority and receive the identifiers that go on every filing.

What registration involves depends on the country. It usually means obtaining a business or employer tax number, opening a payroll or withholding account, and often registering separately for social-security and pension schemes. Each account has its own forms, deadlines and reporting duties once it is live.

Registration is a prerequisite, not a formality. Running payroll before the accounts exist, or filing under the wrong number, leaves an employer non-compliant from the first pay run. Because setting this up takes time in each new country, it is one reason companies use an employer of record, which is already registered locally, to start quickly.

## What does tax registration involve for an employer?

Typically you obtain an employer or business tax number, open a payroll withholding account with the tax authority, and register for social-security and pension schemes where they are separate. Each account comes with its own filing deadlines and reporting duties. The exact steps and identifiers differ from country to country.

## Why must an employer register before running payroll?

Withholding and remitting payroll taxes without the proper accounts is not legal, and filings need the identifiers that registration provides. Paying employees before the accounts exist leaves the employer non-compliant from the first run, exposed to penalties and back payments. Registration has to be in place before the first payday.

## How does tax registration relate to setting up an entity?

They are separate steps. Incorporating a legal entity gives a business a presence in the country, but it still has to register that entity with the tax authority for payroll before it can employ compliantly. An employer of record removes both steps, since it is already incorporated and registered locally.

## Key facts

- **Canada payroll registration:** In Canada, an employer must have a Business Number and open a payroll program account (RP) with the Canada Revenue Agency before it can withhold and remit payroll deductions for its first employee. (Source: Canada Revenue Agency, verified 2026-07-28)

## Frequently asked questions

### Is tax registration the same as registering a company?

No. Registering a company creates the legal entity. Tax registration enrols that entity, or an employer of record, with the tax authority so it can operate payroll. A business often has to do both, and in most countries the tax registration is a separate step that follows incorporation.

### How long does tax registration take?

It varies by country and by the accounts needed. Some registrations complete in a few days; others take several weeks, especially where separate social-security or pension enrolments are involved. Because an employee cannot be paid compliantly until it is done, the timeline should be built into any hiring plan.

### Does an employer of record need me to register for tax abroad?

No. An employer of record is already registered with the tax authorities in the countries it covers, so you do not open payroll accounts yourself. It withholds and remits the correct taxes and contributions for your employees under its own registrations, which is what lets you hire quickly.

### What happens if I run payroll without registering?

You are non-compliant from the first pay run. Withholding and remitting taxes under the wrong number, or with no account at all, can bring penalties, interest and back payments, and can complicate the employee's own tax position. Registration needs to be in place before the first payday.

## Sources

- [Program accounts you may need](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/business-registration/business-number-program-account/need-program-accounts.html), Canada Revenue Agency

_Last updated 2026-07-28. Reviewed by Teamed's in-house employment-law team. Source: https://www.teamed.global/glossary/tax-registration_