In the event of a change (real or perceived) in the relationship between you and the employer, or if the employer argues that the relationship is not actually what it was originally represented to be, then having a carefully-written contract may provide you some protection. You should be sure to protect yourself through your contract with the employer, keeping the first three points of the guidelines above in mind. The CRA primarily uses this as a means of reviewing and summarizing the previous three. The exact manner in which integration can be measured is unfortunately not fully clarified. Where the worker integrates his activities to the commercial activities of the payer, an employer-employee relationship probably existsвЂќ. IntegrationДЄccording to the CRA, вЂњWhere the worker integrates the payerвЂ™s activities to his own commercial activities, a business relationship probably exists. If these three factors are applicable to your situation, you are a contractor and not an employee. Do you risk financial loss due to factors such as damage to equipment, delays or bad debts?.Is there an opportunity for you to make a profit?.The differentiation is fairly simple and relies on three points: This can easily be measured based on your level of financial involvement with a business. This applies to equipment such as laptops and mobile devices for those who work online from home. As a result, the CRA instead considers the cost of using the tools as a more reliable indicator.ДЄccording to the CRA, вЂњWhen workers purchase or rent equipment or large tools that require a major investment and costly maintenance, it usually indicates that they are self-employed individuals, because they may incur losses when replacing or repairing their equipmentвЂќ. There are, however, certain professions that require an employee to do the same, such as a car mechanic. Typically, a contractor is responsible for providing their own tools. On the other hand, if the worker determines for himself how, when and where work is to be done, then this is considered a business relationship, though the contractor should take care to ensure that they can demonstrate that they are the one planning the work. They can be considered to be in control even if they do directly control the workerвЂ™s activities. In this relationship, the employer also maintains the right to hire and fire workers. Who determines the specifics of work to be done, such as time, place and manner of working? Who determines the salary to be paid? If it is the employer, then this is an employer-employee relationship. 4 POINTS TO DETERMINE YOUR STATUS ControlД¬ontrol is the main point to be considered. More information can also be found in CRAвЂ™s Employee or Self Employed Guide which will вЂњin most cases, allow payers and workers to determine the nature of their relationshipвЂќ. The CRA uses a 4-point list as a means to determine the type of relationship you have with your employer. It is therefore important for you to protect your contractor status, but how? The definition of the relationship between a contractor and employer falls into something of a grey area which may change on occasion. As a contractor, your reasonable business expenses may be ineligible too. If the CRA should happen to disagree, both you and your employer will find yourselves responsible for unpaid taxes, CPP and EI premiums, in addition to interest and penalties. It is important, however, to verify that you are indeed considered a contractor. The contractors also have certain benefits, a significant one being the ability to deduct any reasonable business expenses. This is because the independent contractor is responsible for their own CPP contributions and taxes, and the employer also saves by not having to do payroll, provide benefit packages, or make payments on the workerвЂ™s behalf. Employers enjoy an easier hiring process, and often a less expensive worker. There are benefits to be had for both independent contractors and those that employ them. While the person you work for can always be referred to as your employer, do you know what your relationship to them is? Are you an employee? Or an independent contractor? You had best be certain, otherwise you may face some surprises at tax time if the Canada Revenue Agency (CRA) takes a different view.

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