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Can your PREC pay an assistant? Ontario's rules, and the payroll that follows

Your PREC can employ an unregistered assistant for administrative work, but not for anything counting as a trade in real estate, and never a teammate's split.

By Matthew Reeves, FounderAugust 23, 2026 · 8 min read

Summary

A personal real estate corporation, or PREC, is an Ontario company through which one real estate agent takes their commission: their brokerage, meaning the firm they’re registered under, pays the company rather than the person. The company itself doesn’t register with the Real Estate Council of Ontario (RECO), the regulator whose registration is what people call a real estate licence. An Ontario regulation exempts the company from registering, and lets a brokerage pay it, only while a list of conditions all hold. The first section below sets that list out.1

Two questions decide whether your PREC can pay someone who works alongside you.

  1. Does the work count as a trade in real estate? Ontario defines trading very widely, reaching a sale, purchase, lease or rental plus anything done, directly or indirectly, to help one happen.2 Whoever does that work must be registered with RECO, and registered to your brokerage. Only the brokerage may pay them, or their own PREC where the brokerage paid it there first.21
  2. If the work is purely administrative, who employs the person? Nothing in the conditions stops your corporation employing an unregistered assistant (e.g. for scheduling, listing paperwork and marketing). We’d usually make the PREC the employer rather than hiring in your own name, because a wage paid out of the company reduces its taxable profit, and the commission is already sitting there.

Hiring starts a payroll calendar. You’ll open a payroll account with the Canada Revenue Agency, send it the amounts withheld from each pay plus the corporation’s own contributions by the 15th of the following month, and issue T4 slips by the last day of February.

Your PREC can never pay another agent a share of a commission. A commission split, meaning the agreed cut of a deal a teammate takes, has to be arranged with the brokerage, which then pays each agent directly.12

Our cost of an employee calculator prices what an assistant on your payroll actually costs the PREC, once the corporation’s own CPP, EI and vacation pay are counted.

The conditions your PREC runs on

Ontario’s regulation sets six criteria for what counts as a PREC and eleven conditions it has to keep to stay unregistered.1 In plain language, all of these have to hold at once:

  • The company is incorporated under Ontario’s Business Corporations Act, and you own every voting share in it (i.e. an ownership stake in the company itself, which isn’t a share of a commission).
  • You are its sole director and only officer. Non-voting shares may go to your spouse, child or parent, or to trustees for your minor children.
  • A brokerage employs you to trade in real estate, and the company does no real estate business beyond supplying your services to it.
  • Nobody connected with the company tells the public that it trades in real estate.
  • The company is paid for trading only by your brokerage, you only by your brokerage or your own company, and the company never holds a client’s money.
  • You, the company and the brokerage have signed an agreement, which the brokerage has confirmed in writing satisfies the conditions.

Before the company receives any commission, give the registrar at RECO written notice of its legal name and address for service.1 Break a condition later and the exemption goes, so your brokerage can’t pay the company at all: it may only pay a PREC whose exemption it has confirmed.1

The line between administrative work and trading

Ontario’s Trust in Real Estate Services Act, 2002 (TRESA) governs agents, brokerages and PRECs. It defines a trade as the sale, purchase, lease or rental itself plus “any act, advertisement, conduct or negotiation, directly or indirectly, in furtherance of” one, meaning anything anyone does to help a deal happen.2 Wording that broad is why an assistant can end up needing a registration nobody intended.

The prohibition falls on the person doing the work rather than on whoever pays for it. Nobody may trade in real estate unless registered, and an unregistered person may not perform the functions of a broker or salesperson.2 So the question isn’t who pays your assistant, it’s what your assistant does. Your PREC can’t buy that work in either, because the conditions above bar it from real estate business beyond supplying your services.

Where the boundary falls in a particular job is less settled than the definition: paying an assistant to book a showing and keep a file moving isn’t the same act as paying them to run the showing. We’d write that boundary into a job description before day one, and agree it with your broker of record, the individual broker legally answerable for your brokerage.

Commission splits on a team

Two of the conditions above decide whether your PREC can pay a teammate’s split, and they decide it outright: the company may be paid for trading only by your brokerage, and you only by your brokerage or your own corporation. TRESA puts the matching limit on every registered agent, none of whom may take trading pay from anyone but their employing brokerage or their own PREC.21

One payment from your PREC to a teammate breaks the rule on both sides at once. Your corporation would be doing real estate business beyond supplying your services, which costs it the exemption, and your teammate would be taking trading pay from a company that’s neither their brokerage nor their own PREC. Splits have to run through the brokerage instead.

The payroll a PREC takes on

Everything here assumes an employee, which is what most assistants working for a single PREC are, whatever their contract calls them. Get that wrong and the CRA can make the corporation pay both halves, the amounts it should have withheld as well as its own, plus penalties and interest.3 Our guide to contractors and employees works the CRA’s test, and our guide on paying your spouse the family case (i.e. how much of a relative’s pay you can deduct, and whether premiums are owing).4

Open the payroll account, known as an RP account, before your first payment of withheld money falls due. A payment like that is a remittance, and the first falls on the 15th day of the month after the month you start withholding.5 On day one, have the employee fill in the federal TD1 and the Ontario TD1ON, two forms recording the personal tax credits they claim (e.g. the basic personal amount). Enter their pay and those claims in the CRA’s free Payroll Deductions Online Calculator, which returns the exact amounts to hold back.6

Three amounts come off each pay: income tax, Canada Pension Plan contributions and Employment Insurance premiums. Your corporation then pays its own money on top of the wage. It matches the pension contribution dollar for dollar, which for 2026 means 5.95% of earnings between the $3,500 basic exemption and the $74,600 ceiling, capped at $4,230.45 for the year.7 Its employment insurance premium is 1.4 times the employee’s, and the employee pays 1.63% of gross pay on the first $68,900 earned in 2026, so their maximum is $1,123.07 and the corporation’s is $1,572.30.8 On a $50,000 salary those two employer amounts come to about $3,900, roughly 8% on top of the wage.

Most PRECs are regular remitters: everything the CRA required them to remit across an earlier calendar year, staff deductions and the employer’s own contributions together, averaged under $25,000 a month. A brand new employer is one by default, and pays by the 15th of the month after the pay run.9 Ordinary late-remittance penalties apply to the amount above $500, from 3% at one to three days to 10% past a week. A $2,000 remittance ten days late therefore costs $150.9 Worse, if the corporation takes money off your assistant’s pay and doesn’t send it in, the CRA can collect the shortfall from its directors personally, with interest and penalties on top. A PREC’s controlling agent has to be its sole director, so the director it comes to is you, alone, out of your own money.10 Finally, file the T4 slips with the CRA along with a T4 Summary, and give the employee their copy, both by the last day of February following the calendar year.11

Three Ontario obligations sit outside the CRA and outside this article, and all want attention in the same week. Registering with the Workplace Safety and Insurance Board is due within 10 calendar days of the hire where coverage is mandatory for the way it classifies you, and its questionnaire settles whether it applies.12 The Employment Standards Act exemption for real estate salespeople reaches only people a brokerage employs to trade, so your assistant gets the full entitlements, minimum wage included, at $17.60 an hour to September 30, 2026 and $17.95 after that.13 Eligible private employers share a $1,000,000 Ontario Employer Health Tax exemption across associated employers for 2026. Check that group before assuming a PREC with one or two staff owes nothing.1415

How often this changes

Re-run all of this once a year, and straight away when any of the following happens:

  • Your assistant’s work starts touching a trade, at which point that part of the job belongs to a registered person paid by the brokerage.
  • January 1 arrives and the pension and premium rates and ceilings reset, changing what the same salary costs the corporation.
  • October 1 arrives and Ontario’s general minimum wage changes, which bites hardest where part of the pay is commission.
  • Anything affecting the exemption changes, a move to a new brokerage included, and the registrar needs written notice within five days.1

Closing thoughts

Adding a first employee to a real estate business is mostly a calendar problem once the payroll account exists. The harder part is holding two lines at once. Registration rules decide what your assistant may do, tax rules decide what your assistant is, and the two are drawn by regulators who don’t read each other’s files. Writing both down before anyone starts is cheap.

How we handle it

Payroll means two different things, and the difference matters when you’re deciding what to hand over. Payroll tax filings, meaning remittances, T4s, payroll-account reconciliations, WSIB and Employer Health Tax coordination and contractor-versus-employee analysis, sit in our Year-Round Tax Partner package. Running payroll itself, meaning pay runs, direct deposit, new-hire paperwork and records of employment (the form Service Canada requires when someone leaves or their pay stops, so they can claim EI), sits in Tax + Accounting. We can run it end to end, or work alongside the payroll provider you already use.

Footnotes

  1. Source: King’s Printer for Ontario (e-Laws), “Ontario Regulation 536/20, Personal Real Estate Corporations”, made under the Trust in Real Estate Services Act, 2002, at https://www.ontario.ca/laws/regulation/200536. Section 2 sets the six criteria for what counts as a PREC, including the requirement that all equity (voting) shares be legally and beneficially owned by the controlling shareholder, and the paragraph 5 permission for non-equity shares held by a family member or by trustees for minor children. Section 3 sets the eleven conditions for the exemption from registration. Section 4 requires the brokerage to confirm in writing that those conditions are met before it pays a PREC. Section 5 is the exception letting a controlling shareholder accept trading remuneration from their own PREC, capped at what the brokerage paid the PREC. Section 6 covers the notices to the registrar: the legal name and address for service before the corporation receives any remuneration, and any change affecting eligibility within five days. Section 7(2) puts the duty to keep a non-exempt corporation out of registered work on the broker or salesperson personally. The consolidation runs from December 1, 2023, and the last amendment was Ontario Regulation 358/22. The e-Laws currency date is August 19, 2026. Verified 2026-08-23. ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8

  2. Source: King’s Printer for Ontario (e-Laws), “Trust in Real Estate Services Act, 2002”, S.O. 2002, c. 30, Sched. C, at https://www.ontario.ca/laws/statute/02r30. Section 1(1) defines “trade”, and defines “broker” and “salesperson” as individuals employed by a brokerage to trade in real estate. Section 4(1) prohibits trading in real estate without registration. Section 4(2)(b) bars an unregistered person from performing the functions of a brokerage, broker or salesperson. Section 5(3) is the exemption a PREC relies on. Section 30(b) and (c) bar a brokerage from employing an unregistered person for a function requiring registration, or paying anyone for such a function. Section 31(2) bars a broker or salesperson from accepting remuneration for trading from anyone but the brokerage employing them, except as the regulations provide. Verified 2026-08-23. ↩ ↩2 ↩3 ↩4 ↩5 ↩6

  3. Source: Canada Revenue Agency, “RC4110, Employee or self-employed”, at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4110/employee-self-employed.html. The CRA decides status in two steps, first the intent of the parties and then whether the facts support it, and says the status the parties choose “must reflect their working relationship”. An employer who failed to deduct has to pay both the employer’s share and the employee’s share of any contributions and premiums owing, plus penalties and interest. Verified 2026-08-23. ↩

  4. The reasonableness limit on the corporation’s deduction is Parliament of Canada, “Income Tax Act” section 67, at https://laws-lois.justice.gc.ca/eng/acts/i-3.3/section-67.html. On employment insurance, “Employment Insurance Act” section 5(2)(i) excludes employment where the employer and employee are not dealing at arm’s length, and section 5(3)(a) sends the arm’s-length question to the Income Tax Act. Section 5(3)(b) then deems related persons to deal at arm’s length, so the employment is insurable, where the Minister is satisfied that a substantially similar contract would have been made at arm’s length, having regard to the remuneration, terms, duration and nature of the work. See https://laws-lois.justice.gc.ca/eng/acts/E-5.6/section-5.html. On pension contributions, “Canada Pension Plan” section 6(2)(d) makes employment of a person by their spouse or common-law partner excepted employment, unless the remuneration is deductible to that spouse, at https://laws-lois.justice.gc.ca/eng/acts/C-8/section-6.html. Where the corporation rather than the spouse is the employer, that exception does not apply and contributions are payable in full. Verified 2026-08-23. ↩

  5. Source: Canada Revenue Agency, “Determine if you need to register for a payroll account”, at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/open-manage-payroll-account/determine-need-register.html. Issuer language: “You have to register for a payroll account before the first remittance due date. Your first remittance due date is the 15th day of the month following the month in which you began withholding deductions from your employee’s pay.” You also have to get the employee’s social insurance number within three days of their start date, per the same agency’s “Social insurance number”, at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/set-up-new-employee/social-insurance-number.html. Both verified 2026-08-23. ↩

  6. Source: Canada Revenue Agency, “TD1 Personal Tax Credits Returns”, at https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns.html, which publishes the 2026 federal TD1 and the provincial forms including the TD1ON. The calculator is the same agency’s “Payroll Deductions Online Calculator”, at https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-businesses/payroll-deductions-online-calculator.html. Both verified 2026-08-23. ↩

  7. Source: Canada Revenue Agency, “CPP contribution rates, maximums and exemptions”, at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp/cpp-contribution-rates-maximums-exemptions.html. For 2026: maximum annual pensionable earnings $74,600, basic exemption $3,500, maximum contributory earnings $71,100, employee and employer rate 5.95% each, and a maximum annual contribution of $4,230.45 each. Verified 2026-08-23. Earnings above $74,600 attract a second, smaller contribution on both sides. Both sets of figures are stated in full at our guide to salary and dividends, which owns them. ↩

  8. Source: Canada Revenue Agency, “EI premium rates and maximums”, at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/ei-premium-rates-maximums.html. For 2026 outside Quebec, maximum annual insurable earnings are $68,900 and the employee rate is 1.63%. The maximum annual employee premium is $1,123.07, and the maximum annual employer premium is $1,572.30 at 1.4 times the employee premium. For 2027 outside Quebec the same table gives maximum annual insurable earnings of $70,800 and an employee rate of 1.64%. The 2027 maximum annual employee premium is $1,161.12, and the maximum annual employer premium is $1,625.57, still at 1.4 times. The Canada Employment Insurance Commission set the 2027 rate in a news release of September 14, 2026, “Canada Employment Insurance Commission confirms 2027 Employment Insurance premium rate”, at https://www.canada.ca/en/employment-social-development/news/2026/09/canada-employment-insurance-commission-confirms-2027-employment-insurance-premium-rate.html. The release gives the same 2027 maximums and says employers “pay 1.4 times the employee rate”. The multiple itself is Employment Insurance Act section 68, which still reads “1.4 times” in the consolidation current to 2026-09-03. The 2026 figures were verified 2026-08-23, and both years on 2026-09-24. ↩

  9. Source: Canada Revenue Agency, “Remit (pay) payroll deductions and contributions: When to remit (pay)”, at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-due-dates.html. The average monthly withholding amount is the total of all required remittances in a calendar year divided by the number of months that required one, measured for the calendar year before the previous one. A regular remitter’s is under $25,000, and payment is due the 15th day of the next month. A new employer whose payroll account has been open under 12 months may remit quarterly instead where its total remittances in each calendar month are under $1,000 and its payroll and GST/HST accounts have a perfect compliance record, on April 15, July 15, October 15 and January 15. A month with no pay still needs a nil remittance filed on time. The full penalty scale runs 3% at one to three days late, 5% at four or five days, 7% at six or seven days, and 10% beyond that or where nothing is remitted. A second such penalty in a calendar year is 20% where the failures were knowing or grossly negligent. Income Tax Act 227(9.1) applies the ordinary penalty only to the amount by which the total required remittance exceeds $500, unless the failure was knowing or grossly negligent. The $2,000 example therefore uses ($2,000 minus $500) times 10%, or $150. Rechecked 2026-09-25 against https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-227.html. Verified 2026-08-23. ↩ ↩2

  10. Director liability comes from Parliament of Canada, “Income Tax Act” section 227.1, at https://laws-lois.justice.gc.ca/eng/acts/i-3.3/section-227.1.html, with the parallel provisions for pension contributions in “Canada Pension Plan” section 21.1 and for employment insurance premiums in “Employment Insurance Act” section 83. Directors at the time of the failure are jointly and severally liable for the amount, plus the interest and penalties on it. Under subsection 227.1(2) the CRA must first have exhausted collection against the corporation, through a returned execution, liquidation or dissolution proceedings, or bankruptcy. Subsection 227.1(3) relieves a director who exercised the care, diligence and skill a reasonably prudent person would have exercised to prevent the failure. Verified 2026-08-23. ↩

  11. The filing deadline comes from the Canada Revenue Agency, “File information returns: When to file”, at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/file-information-returns-slip-summaries/when-to-file.html. The obligation to give the employee their own copy comes from the same agency’s “Distribute the slips”, at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/file-information-returns-slip-summaries/distribute-slips.html. Both fall on the last day of February of the following calendar year, and the return rolls to the next business day where that date is a Saturday, a Sunday or a public holiday recognised by the CRA. Filing late costs a flat $100 under the relieving administrative policy for a return of one to five slips. Distributing late costs $25 per day per slip, with a minimum of $100 and a maximum of $2,500. Both verified 2026-08-23. ↩

  12. Source: Workplace Safety and Insurance Board, “Do you need to register with us?”, at https://www.wsib.ca/en/businesses/registration-and-coverage/do-you-need-register-us. Issuer language: “You have 10 calendar days to register with us from the day you hire your first employee.” The same page lists the industries for which coverage is mandatory, including sales and services, without naming real estate, and directs businesses not on the list to its registration questionnaire. Non-construction executives are not automatically covered and may apply for optional insurance. Verified 2026-08-13. ↩

  13. The exemption is Ontario Regulation 285/01, section 2(1)(g), which exempts a person employed “as a salesperson or broker, as those terms are defined in the Trust in Real Estate Services Act, 2002” from Parts VII, VII.1, VIII, IX, X and XI of the Employment Standards Act, 2000. See King’s Printer for Ontario (e-Laws) at https://www.ontario.ca/laws/regulation/010285, e-Laws currency date August 19, 2026. TRESA section 1(1) defines both terms as individuals employed by a brokerage to trade in real estate, so an administrative assistant employed by a PREC is outside the exemption on the regulation’s own words. Minimum wage comes from the Ontario Ministry of Labour, Immigration, Training and Skills Development, “Minimum wage” in “Your guide to the Employment Standards Act”, at https://www.ontario.ca/document/your-guide-employment-standards-act-0/minimum-wage. The general rate is $17.60 an hour from October 1, 2025 to September 30, 2026, and $17.95 from October 1, 2026 to September 30, 2027. Ontario indexes the rate annually, publishing the new one on or before April 1 to take effect the following October 1. Compliance is assessed on a pay-period basis, and pay based wholly or partly on commission has to reach the minimum wage for each hour worked. The other entitlements the exemption would have removed are overtime at 1.5 times the regular rate after 44 hours in a work week, public holiday pay, and vacation pay of 4% of gross wages under five years of service and 6% at five years and over. All verified 2026-08-23, except the vacation-pay percentages, verified 2026-08-13. ↩

  14. Source: Ontario Ministry of Finance, “Employer Health Tax (EHT)”, at https://www.ontario.ca/document/employer-health-tax-eht. The exemption is $1,000,000 of Ontario remuneration for 2026, scheduled for inflation adjustment on January 1, 2029. Rates run from 0.98% to 1.95% and are set by total payroll before the exemption is deducted. Associated employers share one exemption between them, so a second corporation under common control does not get its own. Registration and filing are both triggered by payroll exceeding the exemption. Verified 2026-08-13. ↩

  15. Ontario, “Employer Health Tax (EHT)” (https://www.ontario.ca/document/employer-health-tax-eht), and “Associated employers” (https://www.ontario.ca/document/employer-health-tax-eht/associated-employers): associated employers share the exemption, and eligible private employers with combined Ontario payroll over $5 million cannot claim it. Verified 2026-09-25. ↩

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