Employed or self-employed?
Are you an employer trying to determine whether a worker is an employee or self-employed? It's important to get this classification right, as it can have significant tax and legal implications for both parties.
The Canada Revenue Agency (CRA) uses a number of factors to determine whether a person is an employee or self-employed. These include:
● The overall working relationship: Does the payor set the hours of work, provide training and/or tools, control the method and amount of pay, and have the right to hire or fire the worker?
● The worker's ability to work for other payers: Does the worker require permission to work for other payers or have the freedom to do so?
● The nature of the work: Does the worker use email addresses and business cards provided by the payer, and do they have to do the work themselves without the ability to hire helpers or assistants?
● The financial aspects of the relationship: Is the worker in a position to realize an investment gain or loss, or are they financially responsible for not fulfilling the obligations of a contract?
It's important to note that the determination of employee vs. self-employed status is not based on one single factor, but rather a reasonable assessment of all factors as a whole. If you're not sure where you stand, it's a good idea to consult with a professional accountant or lawyer to ensure you're properly classified.
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