![]() Degree of control or independenceĬonsider the degree of control held by the payer or the degree of independence held by the worker. Both parties’ intentions form part of the context of the employment that the CRA analyses.Ĭontrol is the ability, authority, or right of a payer to exercise control over a worker concerning the manner in which the work is done and what work will be done. To decide the parties’ intentions, the CRA gets a copy of the contract, or testimony by the parties and examines the parties’ actions. Sometimes the two parties have a different understanding as to the status of their working relationship, in which case there is no common intent. Sometimes the intent can be found in a written agreement. Sometimes the intention is clear and both parties are in agreement (common intent). The CRA needs to know how they defined their working relationship and why they defined it as such. Did the two parties intend to enter into a contract of service (employer-employee relationship) or did they intend to enter into a contract for services (business relationship)? The CRA asks the worker and the payer what their intent was when they entered into the working arrangement. To do this, we examine the total relationship between the worker and the payer, using a two-step approach. When the CRA examines whether a person is an employee or a self-employed individual, the key question to ask is whether the person is engaged to carry out services as a person in business on their own account, or as an employee. For more employer information, go to Payroll.ĭeciding a worker's employment status in a province or territory other than Quebec Employers are responsible for deducting Canada Pension Plan (CPP) contributions, EI premiums, and income tax from remuneration or other amounts they pay to their employees. Employers must remit these deductions along with their share of CPP contributions and EI premiums to the Canada Revenue Agency (CRA).Īn employer who fails to deduct the required CPP contributions or EI premiums has to pay both the employer's share and the employee's share of any contributions and premiums owing, plus penalties and interest. In an employer-employee relationship, the payer is considered an employer and the worker an employee. The facts of the working relationship as a whole decide the employment status. It can also have an impact on how a worker is treated under other legislation such as the Canada Pension Plan and the Income Tax Act. Employment status directly affects a person's entitlement to employment insurance (EI) benefits under the Employment Insurance Act. It is important to decide whether a worker is an employee or a self-employed individual. Formal disputes (objections and appeals).Authorizing the withdrawal of a pre-determined amount from your Canadian chequing account.CPP/EI Explained – Interpretive articles.Deciding a worker's employment status in the province of Quebec.Responsibility for investment and management.Subcontracting work or hiring assistants.Deciding a worker's employment status in a province or territory other than Quebec.Ruling period that applies to a decision.Employment insurance for self-employed individuals.
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