A production company contracts with a non-resident individual and the services are performed under an employer-employee relationship. The non-resident individual is considered to be an employee of the production company. For further information, please refer to Publication RC4110 - Employee or Self-Employed.

Payments subject to withholding

Payments made to non-residents who provide services in Canada as employees are subject to the same withholding requirements as those made to resident employees under Regulation 102. These amounts are subject to tax deductions at the graduated rates.

However, there is an exception to the employer’s withholding obligation for certain non-resident employers paying employment income to non-resident employees for performing the duties of an office or employment in Canada after 2015. These non-resident employers, who apply for non-resident employer certification, will not have to withhold and remit tax on the payments they make to non-resident employees who are working in Canada for a limited time and are exempt from tax in Canada under a tax treaty.

For more information on qualifying non-resident employer and qualifying non-resident employee, see Non-resident employer certification.

If there is an employer-employee relationship deduction of Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums may be required. However there may be exceptions to this. An exemption of CPP may be available based on a reciprocal social security agreement between Canada and the employee's home country. In addition, an exemption for EI may also be available if the unemployment insurance laws of the employee's home country require payment of premiums on the same employment income.

For more information, see T4001, Employers' Guide - Payroll Deductions and Remittances.

Remitting tax withheld

The payer may be required to remit the tax withheld to the CRA on an accelerated basis, depending on the employer's source deduction history.

Reporting of payments by the payer

If you have paid amounts for employment services, only those amounts paid that are not excluded from reporting as per subsection 200(1.1) of the Income Tax Regulations must be reported on a T4, Statement of Remuneration Paid.

For more information see Guide T4001, Employers' Guide - Payroll Deductions and Remittances for more information.

Forms and publications

• RC4110 - Employee or Self-Employed
• T4, Statement of Remuneration Paid
• T4001, Employers' Guide - Payroll Deductions and Remittances
• RC473, Application for Non-Resident Employer Certification