Employee vs. Contractor

Question 1

Employee vs. Contractor

Taxation

Answer 1

Employee vs. Contractor (Taxation)
* 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