Employment status determines who is responsible for deducting CPP contributions, EI premiums, and income tax from remuneration paid. If the worker is an employee, the payer (employer) is responsible. If the worker is an independent contractor (i.e., self-employed), the payer has no responsibilities in that regard.
CRA looks at the following factors to determine employment status:
- What was the intended relationship? (Employer–Employee or Payer–Independent Contractor?)
- How much control does the payer have over the payee? (What autonomy does the payee have?)
- Who provides tools & equipment?
- Can the payee subcontract work or hire assistants?
- How much financial risk does the payee incur?
- Who has responsibility for investment and management?
- Does the payee have opportunity for profit or loss?
For detailed information, see CRA’s guide, Employee or Self-Employed?