The PREC with a team: assistants, coordinators and payroll

Licence status decides who can pay whom, and the tax follows from that. Your corporation pays unlicensed people directly — an administrative assistant, a transaction coordinator, a marketing person — as employees or as contractors, on the ordinary tests. Anyone licensed, paid for licensed work, is generally paid by the brokerage, because that is where provincial real estate legislation makes commission flow. The compliance lands on the first group: the day one of them is an employee, the corporation has a payroll account, a remittance schedule the CRA assigns, and a February slip deadline running on the calendar year whatever your year-end is.

The regulator answers first, and the CRA answers second

Trading in real estate is licensed activity, and provincial legislation generally requires remuneration for it to be paid by the brokerage — to the registrant, or to that registrant’s personal real estate corporation where the province allows one. The same legislation generally bars paying an unlicensed person for licensed work. None of that is a tax rule and none of it bends for a tax reason, so it gets settled first — by your regulator, not the CRA.

Unlicensed people can still do most of what a team runs on: scheduling, listing input, conveyancing paperwork, marketing, chasing conditions, the books. Your corporation pays for that directly, and the tax questions are the ordinary ones any employer faces.

What owners get wrong is the shape of the payment rather than the person. Handing your unlicensed coordinator ten percent of a closing is not a commission split — it is a bonus, employment income, withheld on and reported on the T4 like any other pay. Whether such a payment is permitted at all is your regulator’s question; paying for hours and duties answers both versions at once.

The other agent on your team is paid by the brokerage, and that money was never yours

Where a buyer’s agent works under you, the split is generally documented with the brokerage and paid by the brokerage on each side of the deal. Two things follow. Their share never becomes your corporation’s revenue, so it is not a deduction and produces no slip from you — the same presentation the brokerage split and desk fees already get. And if that agent has their own PREC, the brokerage pays that corporation, which handles its own registration and returns. Nothing touches your payroll account.

Booking the gross and expensing the other side inflates the revenue everything else is measured against. Some arrangements do run that way, with the brokerage paying the lead agent’s corporation and expecting it to pay onward — read your commission statements against the team agreement rather than assuming they match, and check that version against your regulator’s rules first.

Employee or contractor is the test you actually get assessed on

A transaction coordinator who works your hours, in your CRM, on your logins, with no other clients, looks like an employee whatever the invoice says. If the CRA agrees, the assessment lands on your corporation: both shares of the CPP and EI that should have been withheld, plus penalties and interest, reaching back over years you consider closed. The factors, and the evidence a defensible contractor file rests on, are on the payer’s side of the test.

Two wrinkles are particular to a team. An assistant shared between two agents and paid by two corporations is two payroll relationships, each tested on its own facts. And an assistant who gets licensed mid-year changes category on the day it happens — what your corporation can pay them for narrows from that date, and the payroll record changes with it, not at the next year-end.

Once one person is an employee, the payroll account is the calendar

The account goes with the first salary or taxable benefit, not with the incorporation. After that the machinery is the one every employer runs: income tax, CPP and EI withheld from each pay plus the corporation’s contributions on top, remitted on a schedule the CRA assigns from your average monthly withholding, a record of employment to Service Canada on every interruption of earnings, T4s by the last day of February. The restaurant payroll guide works all of it through, and a three-person team runs the identical routine on a shorter list.

One line changes character the first time someone other than you is on the pay run. As the owner controlling the corporation you are generally not insurable for EI; your coordinator is — EI on both sides, and an ROE the day she leaves. Workers’-compensation premiums and any provincial payroll levy sit outside the CRA entirely, on their own accounts and their own definition of assessable earnings.

Who pays, and what it produces:

A spouse on the team is two tests, not one

Salary for work actually performed is not split income, so the tax on split income never reaches it; the whole test is whether the amount is reasonable for the job, proved with hours recorded as you go and something showing where the rate came from. Dividends need an exclusion instead — roughly 20 hours a week in the business, or shares that clear the excluded-share test, whose carve-out for service businesses (generally less than 90% of business income from services) a commission practice usually fails. Which door is open is settled before the first pay run, not at filing, and the share question is the regulator’s first: provincial PREC rules govern who may hold shares at all.

If your spouse is a licensed agent on your team, the licensed side of their income is the brokerage’s to pay. Both doors above apply only to the unlicensed work your corporation buys.

A worked example: C$520,000 of production, two people on the team

Illustrative, round numbers, December 31 year-end, no provincial rate applied. The point is where each dollar lands.

Your board reports C$520,000 of gross commission across you and one buyer’s agent. Under the arrangement documented with the brokerage, the brokerage pays the agent C$75,000 directly; it never reaches your corporation. On the remaining C$445,000 the brokerage’s split and desk fees take 20%, or C$89,000. So C$356,000 arrives — and that, not C$520,000, is the revenue figure everything else is measured against.

Against it, the people:

• The transaction coordinator, unlicensed and employed — C$58,000, plus the employer’s CPP share, both deductible. A payroll account, semi-monthly runs, remittances by the 15th of the following month, EI on both sides, a T4 in February.
• Your spouse, on listing admin and the books — C$24,000, on the same payroll, tested on what a stranger would have been paid for the same hours.
• A marketing freelancer with three other clients — C$16,000 on invoice, plus GST/HST the corporation recovers as an input tax credit. No payroll; a T4A question rather than a T4 one.

That is C$98,000 before the employer’s CPP, leaving C$258,000 before your own pay and before the vehicle, marketing and dues the first-year guide covers. Take C$130,000 as salary and the corporation deducts that too; what survives is active business income, taxed federally at 9% on the first C$500,000 for an eligible CCPC in 2026, plus your province’s rate.

Now compare two lines. The C$75,000 to the buyer’s agent produced no deduction, no account and no slip from you. The C$58,000 to the coordinator produced a deduction, a payroll account, twelve remittances, EI on both sides, a T4, and an ROE the day she leaves.

What Cadence does

We open the payroll account when the first hire is real rather than at incorporation, set the remitter schedule and the pay runs, and put the February slips on the same calendar as the GST/HST returns and the instalments. Before a hire we look at the arrangement rather than the invoice, and we read the team agreement against the commission statements — the line between a split that never reaches you and a payment your corporation makes is the one most often booked wrong. A spouse’s rate gets set against something defensible and written down. Remittances, T4s and T4As and contractor-versus-employee analysis are GST/HST and payroll work; running the cycle itself sits in the year-round packages, and on the annual-returns package payroll is an add-on scoped at the estimate. PRECs sit with consultants, agencies and professional services. Where the answer turns on who your regulator permits you to pay, that goes to the regulator first, and we say so.