Employee or Self-Employed?

The guide entitled Employee or Self-Employed is a tool to assist you in determining if a worker is an employee or a self-employed individual.

Eligibility Criteria

Use the guide if you are a payer or a worker. It will help you understand how to determine a worker’s employment status.

Summary

It is important to determine if you are considered an employee or a self-employed individual because your employment status directly affects your entitlement to Employment Insurance (EI) benefits. Employment status can also have an impact on how you are treated under legislation such as the Canada Pension Plan, the Employment Insurance Act, and the Income Tax Act.

If the worker is an employee, (employer-employee relationship) the payer is considered an employer. Employers are responsible for deducting Canada Pension Plan (CPP) contributions, Employment Insurance premiums, and income tax from remuneration or other amounts they pay to their employees. They must remit these deductions along with their share of CPP contributions and EI premiums.

An employer who fails to deduct the required CPP contributions and EI premiums must pay both the employer’s share and the employee’s share of any contributions and premiums owing, plus penalties and interest.

If the worker is a self-employed individual (business relationship), he or she is considered to have a business.

This guide will help determine if a worker is an employee or a self-employed individual, and if there is an employer-employee relationship or a business relationship. The determining factors are detailed in Canada Revenue Agency's publication RC4110 - Employee or Self-Employed.

Quebec Contact(s):
See National Contact.

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National Contact(s):
Canada Revenue Agency
Toll-free (information): 1-800-959-5525 (Business Enquiries and Registrations)
Toll-free (publications): 1-800-959-2221 (Forms and Publications)
Web site: http://www.cra.gc.ca/menu-e.html