In this post, we provide a resource available through CRA to help determine whether your independent contractor is really an employee.
If you are hiring contractors or consultants, it is important to decide whether they are considered employees or self-employed. Penalties are steep in the event of a CRA audit.
If employers are unsure, CRA will provide a written ruling to show whether a worker is an employee or self-employed, and whether that worker’s employment is pensionable or insurable (eligible for CPP and EI).
In general, CRA will look at four standard areas to determine the status of a worker as they relate to tools/equipment, control, integration and risk vs. reward.
To help understand how to decide a worker’s employment status, you can use this guide.