Employee or Self-Employed? - Timmins Economic Development ...

Employee or Self-Employed?It is important to determine whether a worker is an employee or a self-employedindividual. Often a person thinks they are self-employed, but in reality, RevenueCanada and the Workplace Safety and Insurance Board would actually considerthem to be a worker, which impacts both the employer and the worker.When examining whether or not a person is an employee or a self-employedindividual, the key question to ask is whether or not the person is engaged toperform services as a person in business on their own account, or as an employee.To do this, Revenue Canada examines the total relationship between the workerand the payerA person is considered an employee if:o They are a subordinate. The payer will often direct, scrutinize, and controlmany elements of how the work is performed.o The payer controls the worker with respect to both the results of the work andthe method used to do the work.o The payer determines and controls the method and amount of pay.o The worker requires permission to work for other payers while working forthis payer.o The payer has priority over the worker’s time.o The payer determines what jobs the worker will do.o The payer supplies the tools and equipment required by the worker.o The worker cannot hire helpers or assistants.o The worker does not have the ability to hire and send replacements.A person is considered self-employed if:o They do not have anyone overseeing them.o They are free to work when and for whom they choose and may provide theirservices to different payers at the same time.o They can accept or refuse work from employers.o The relationship between the person and the payer does not present a degreeof continuity, loyalty, security, subordination or integration.o Someone self-employed provides the tools and equipment required for thework, and is responsible for their repairs, insurance, and maintenance.o They supply their own workspace, and are responsible for the costs tomaintain it.o They do not have to perform the services personally. A self-employed personcan hire another party to either complete the work or help to complete thework.o The payer has no say in who does the work.o They are hired for a specific job rather than an ongoing relationship.o They advertise their services and actively market themselves.o They have an established business presence.

o They are compensated by a flat fee and incur expenses in performing theservices.It is important for both workers and payers to know whether the governmentwould consider them an employee or self-employed. You may engage someonethat you consider to be self-employed, but during an audit, you’ll have to pay thefee when Revenue Canada determines that they were in fact, an employee. Knowthe difference! Learn more at www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-06e.pdfFor more information please contact the Timmins Economic DevelopmentCorporation at (705) 360-2656.