Employee vs. Contractor (Taxation)

Question 1

Employee vs. Contractor (Taxation)

Answer 1

• No single test is decisive. Must consider:
  o Intention of the parties
  o Control of work (hours, location, how job is completed)
  o Ownership of tools (who supplies)
  o Chance of profit and risk of loss
  o Ability to subcontract work or hire assistants
  o Integration
• Issues:
  o Contractors can deduct all reasonable expenses whereas employment deductions are limited
  o Employees can receive EI benefits, contractors can opt in with restrictions
  o Employers are required to withhold source deductions for employees
  o Employer may be responsible for both employee and employer contributions of EI and CPP if an individual is incorrectly classified as a contractor
  Reference: RC4110