Introduction

This article provides information on what the Canada Revenue Agency (CRA) looks at when determining whether the employment of a worker engaged in agriculture or horticulture is pensionable or insurable, or both, under the Canada Pension Plan (CPP) and the Employment Insurance Act (EIA).

Employer responsibilities

All employers are required by law to deduct CPP contributions and employment insurance (EI) premiums from most amounts they pay to their employees. Employers must remit these amounts to the CRA along with their share of CPP contributions and EI premiums. More information on employer responsibilities and obligations can be found through our Payroll menu page.

Explanations

Generally, agricultural workers are employed in farming, in activities such as these:

• clearing land, cultivating or conserving the soil
• producing or harvesting most agricultural products, such as wild berries, honey, eggs, dairy, and maple products
• breeding or raising most livestock
• offering for sale or selling, exhibiting, advertising, assembling, freezing, storing, grading, processing, preparing, packing and transporting agricultural products when these activities are part of the farming activities described above

Horticultural workers are employed in activities such as these:

• breeding, producing, raising or harvesting vegetables, flowers, shrubs or ornamental grasses and seeds, seedlings, grafts or cuttings
• landscape gardening

Workers who are engaged in aquaculture (cultivation of aquatic plants or animals), silviculture (cultivation of trees) or viticulture (cultivation of grapevines) are not considered to be agricultural or horticultural workers.

Employee or self-employed worker?

To determine if a person is an employee or a self-employed worker, the CRA looks at the factual working relationship between the worker and the payer. For general information, see Guide RC4110, Employee or Self-employed

If the worker is self-employed, the employment is neither pensionable nor insurable. Therefore, the remainder of this article will not apply to the employment in question. However, all self-employed workers pay the CPP contributions at the time they file their income tax return and may opt into the EI program for self-employed individuals. Please see Responsibilities, benefits and entitlements for employees and self-employed workers for more information.

If, on the other hand, the worker is an employee, continue reading to determine whether the employment is pensionable or insurable, or both.

Pensionable and insurable employment?

An employee in the field of agriculture or horticulture is engaged in pensionable or insurable employment, or both, in accordance with the CPP and EIA.

However, an employee in the field of agriculture or horticulture is not engaged in pensionable or insurable employment, or both, when this employment meets the conditions outlined in the CPP and EI Regulations. These conditions are explained in detail in the following sections:

Conditions excepting the employment from pensionable employment

When an employee works in agriculture or horticulture, the employment is not pensionable if one of the following conditions applies:

• the employer pays the employee less than $250 in cash^{Footnote 1} in the same calendar year; or
• the employer pays the employee in cash for a period of less than 25 working days in a calendar year. The 25 working days do not have to be consecutive, but they must be in the same calendar year and they must be with the same employer. Periods of employment with the same employer may be combined in order to qualify for the 25-day requirement provided they are in the same calendar year.

If neither of these conditions applies, the employment is pensionable, starting from the first day of work.

However, the worker may elect to pay CPP contributions on these earnings when certain conditions are met. Please refer to Form CPT20, Election to Pay Canada Pension Plan Contributions for more information.

Examples of excepted employment:

• Bert worked for 25 days and received a cheque for $249. The first condition applies because Bert received less than $250 in cash
• Nancy worked for 25 days and received a cheque for $100 and three cords of wood valued at $75 per cord for a total of $325. The first condition applies because even though the amount received is over $250, the value of the wood is not considered to be a cash payment
• Paul worked for 24 days and received a cheque for $500. The second condition applies because Paul received a cash payment for less than 25 working days in a calendar year

In these three cases, the employment is not pensionable because one of the conditions applies.

Conditions excluding the employment from insurable employment

When an employee works in agriculture or horticulture, the employment is not insurable if one of the following conditions applies:

• the employee works for less than seven days in a calendar year. The seven days do not have to be consecutive, but they must be in the same calendar year and they must be with the same employer. Periods of employment with the same employer may be combined in order to qualify for the seven-day requirement, provided they are in the same calendar year; or
• the employee works for seven days or more in a calendar year and the employer does not pay the employee in cash^{Footnote 1} for that employment (for example, the employee could receive room and board only, or goods only).

If neither of these conditions applies, the employment is insurable, starting from the first day of work.

Examples of excluded employment:

• Bert worked for six days and received a cheque for $500. The first condition applies because Bert worked for less than seven days in the year.
• Susan worked for eight days. In exchange for her services, she received six cords of wood valued at $70 per cord. The second condition applies because she was not paid in cash for her eight days of work. The cords of wood are not considered to be a cash payment.

In both cases, the employment is not insurable because one of the conditions applies.

How to request a ruling

If a worker or payer is not sure of the worker's employment status, either party can request a ruling by the CRA to have the status determined. More information on the ruling process is available in How to get a CPP/EI ruling.

For information on the possible implications of a CPP/EI ruling, go to Have you received a CPP/EI ruling?

For more information

To get more information, call the CRA’s business enquiries line at 1-800-959-5525.

Legislative references

• Subsection 13(3) Canada Pension Plan
• Paragraph 6(2)(a) Canada Pension Plan
• Section 29 Canada Pension Plan Regulations
• Subsection 2(2) Canada Pension Plan Regulations
• Paragraphs 5(2)(h) and 5(6)(e) Employment Insurance Act
• Subsections 9(1) and 9(2) Employment Insurance Regulations

Footnotes

Footnote 1

An employee who is paid by cheque or direct deposit is also considered to be paid in cash.

Return to footnote 1 referrer