Canada Pension Plan and Employment Insurance Explained

How to obtain a ruling for Canada Pension Plan and Employment Insurance purposes

Introduction

A ruling is an official decision issued by an authorized officer of the Canada Revenue Agency (CRA). A ruling states whether a worker is an employee or is self-employed, and whether or not that worker's employment is pensionable or insurable. It may also indicate the amount of pensionable or insurable earnings a worker has and whether or not Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums must be paid. A ruling can also indicate the number of insurable hours an employee has in insurable employment.

Requesting a ruling

An employer, an employee, or a person claiming to be an employer or an employee can request a ruling. If an employer is not sure whether CPP contributions and EI premiums should be deducted from a worker's pay, the employer can request a ruling from CRA. The same is true for a worker who wants to know whether CPP contributions and EI premiums should be deducted from his or her pay.

For general information about determining whether a worker is an employee or is self-employed, see Guide RC4110, Employee or Self-employed?

An employer or a worker can request a ruling by sending a letter or a completed Form CPT-1, Request for a Ruling as to the Status of a Worker under the Canada Pension Plan or Employment Insurance Act, to their tax services office.

The Canada Employment Insurance Commission (CEIC), an entity under the umbrella of Human Resources and Social Development Canada (HRSDC), can also request a ruling from the CRA. Generally, the CEIC will request a ruling when it is not sure whether the worker was working in insurable employment or had insurable earnings or insurable hours.

Time limit to request a ruling

A worker or an employer can request a ruling before June 30 of the year following the year to which the question relates. For example, if the employment took place in 2006, the ruling request has to be made before June 30, 2007.

The CEIC is not subject to the same time limit. It can request a ruling from us at any time.

The ruling process

Once a ruling has been requested, an authorized CRA officer will contact the worker and the employer to discuss the working arrangement that was (or is) in place. Sometimes the officer has to ask the employer for more information such as payroll records, copies of written contracts, or other related documents. On receipt of the necessary information, the officer will decide whether or not the worker was (or is) an employee working in pensionable or insurable employment for purposes of the Canada Pension Plan, the Employment Insurance Act, or both.

Once a ruling has been made, the officer sends a letter to the worker and the employer informing them of the decision. Every ruling can be appealed and the procedure for doing so is explained in the letter. More information about appealing a ruling can be found in our pamphlet called Your Appeal Rights: Employment Insurance and Canada Pension Plan Coverage.

For more information

To get more information, call 1-800-959-5525.

Legislative references

• Section 26.1 Canada Pension Plan
• Section 90 Employment Insurance Act