The Canada Revenue Agency (CRA) is once again scrutinizing small businesses for how they classify employees vs vs independent contractors. Small businesses are often reluctant to hire employees because of payroll taxes, benefits and severance pay. The workers want to be hired as independent contractors to enjoy the benefits of deducting significantly more expenses.
The courts have provided these guiding criteria for the correct classification of worksers:
You are likely to be considered self-employed if:
- You control the time, place, and manner in which you perform your activities;
- You supply your own equipment , and cover the rental and maintenance costs;
- You make a profit or incur a loss, and cover your operating costs; and
- You integrate your client’s activities into your own business activities.
You are likely to be considered an employee if your employer:
- Decides where, when and how work should be performed.
- Dictates your working hours.
- Determines your salary.
- Supervises your activities.
- Manages your performance and assesses the quality of your work.
Business owners and contractors should be aware of these guidelines and should be able to defend their positions based on the criteria outlined above.
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This article was published at Accounting Services of Charlotte, NC
Eddie and his brother bought the Lighthouse Resturant and marina in Colonial Beach Virginia in 2006. He talks about his business, taxes and making tasty crabs at the best time of year to eat them..right before hibernation. Video by Lisa Miller, Tea Party WDC
This article was published at Accounting Services of Charlotte, NC
