Fishers and Employment Insurance

T4005(E) Rev. 16

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La version française de ce guide est intitulée Les pêcheurs et l'assurance-emploi.

Table of contents

• Is this guide for you?
• Definitions
• Are you a designated employer?
  • Buyer of a catch
  • Head fisher of a crew
  • Agent
  • Common agent
• What is a self-employed fisher?
• What are your responsibilities as a designated employer?
• Calculating the insurable earnings of a fisher
  • Calculations
• Deducting and remitting EI premiums
• Filing a T4 information return
• Keeping records
• Examples
• Online services
  • My Account
  • Handling business taxes online
    • Receive your CRA mail online
    • Authorizing the withdrawal of a pre–determined amount from your bank account
  • Electronic payments
• For more information
  • What if you need help?
  • Direct deposit
  • Forms and publications
  • Electronic mailing lists
  • Teletypewriter (TTY) users
  • Service complaints
  • Tax information videos

Is this guide for you?

This guide will help to determine if you are a designated employer of fishers under the Employment Insurance (Fishing) Regulations. It will also explain your responsibilities as a designated employer, and how to calculate the insurable earnings of a fisher.

There are four types of designated employers:

• the buyer;
• the head fisher;
• the agent; and
• the common agent.

For more information on each type of designated employer, go to Are you a designated employer?.

If you hire workers as employees in the fishing industry, you do not need this guide. Instead, go to guides T4001, Employers' Guide – Payroll Deductions and Remittances, and T4032, Payroll Deductions Tables.

Definitions

Buyer – A person who buys a catch to resell it raw or after processing it. A buyer does not buy a catch to use it for food, feed, or bait.

Catch – Any natural product or by-product of the sea, or any other body of water, that a crew catches or takes. A catch includes fresh fish, cured fish, Irish moss, kelp, and whales. However, it does not include fish scales or seals.

If only part of a catch is delivered to a buyer, the part delivered is the catch. If more than one catch or part of a catch is delivered to a buyer at one time, the catches or parts delivered are the catch.

Crew – A single fisher or a group of fishers who make a catch together.

Cured fish – Fish and fish products identified as follows:

• salted groundfish, smoked and pickled herring, pickled mackerel, pickled turbot, pickled and salted alewives, pickled trout, and other pickled fish products; and
• cod oil and cod livers.

Designated employer – A person who is considered to be the employer of self-employed fishers. For more information, see the section Are you a designated employer?.

Fisher – A self-employed individual who fishes. This means a person who does the following:

• makes a catch;
• builds a fishing vessel for personal use or for the use of a crew of which the person is a member in making a catch; or
• works to make or handle a catch. This includes loading, unloading, transporting, or curing a catch made by the crew of which the person is a member. It also includes preparing, repairing, dismantling, or laying up the fishing vessel or fishing gear the crew uses to make or handle a catch, when the person doing this work is also making the catch.

A fisher does not include a person who works as an employee or who fishes for sport. For more information, see the section What is a self-employed fisher?.

Fishing gear – Any specialized equipment that a crew uses only to make a catch. It does not include hand tools or clothing.

Fresh fish – Fish that is not cured fish.

Are you a designated employer?

You are a designated employer if any of the following conditions applies to you.

Buyer of a catch

You are the designated employer of all the self-employed fishers who make the catch if you buy the catch and both of the following conditions are met:

• it is bought for resale and not for your own use as bait, feed, or food; and
• it is delivered in Canada to either you or your agent.

If you do not operate under these conditions, for example, if the delivery is made to an American buyer in the United States, you are not the designated employer.

Head fisher of a crew

You are the designated employer if you are the head fisher of a crew and:

• the buyer of the catch is not the designated employer; and
• the gross returns from the sale of the catch are paid to you.

You are the designated employer of all other fishers who are members of the crew, but not yourself.

Agent

You are the designated employer if you are an agent acting either for the buyer or for the crew and:

• the buyer of the catch is not the designated employer;
• the catch is delivered by a member of the crew; and
• the gross returns from the sale of the catch are paid to you.

If you are a member of the crew, you are the designated employer of all the other fishers who are members of the crew, but not yourself.

Common agent

You are the designated employer if you are a common agent acting for both the buyer and the crew at the same time. If you are a member of the crew, you are the designated employer of all the other fishers who are members of the crew, but not yourself. If you are not a member of the crew, you are the designated employer of all the fishers who are members of the crew.

What is a self-employed fisher?

To be a fisher as defined under the Employment Insurance (Fishing) Regulations, an individual has to be a self-employed person and also has to:

• participate in making a catch;
• not be fishing for his or her own or another person's sport; and
• meet at least one of the following conditions:
  • own or lease the boat used to make the catch;
  • own or lease specialized fishing gear (not including hand tools or clothing) used to make the catch;
  • hold a species licence, issued under the authority of Fisheries and Oceans Canada, necessary to make the catch; or
  • have a right of ownership to all or part of the proceeds from the sale of the catch and be responsible for all or part of the expenses incurred to make the catch. This means the worker is required to pay a predetermined amount or percentage of the expenses incurred by the crew to make the catch, regardless of the value of the catch. Such expenses can include the cost of fuel used to make the catch.

For more information, go to Workers engaged in fishing.

If a worker in the fishing industry does not meet any of the above conditions but you believe that he or she is a self-employed individual, you can request a ruling to have the status determined. If you have a payroll program account and are registered on My Business Account, you can use the "Request a CPP/EI ruling" service. For more information, go to My Business Account.

A designated employer or a worker can request a ruling by sending a letter or a completed Form CPT1, Request for a Ruling as to the Status of a Worker Under the Canada Pension Plan and/or the Employment Insurance Act, to their tax services office.

You can get this form at Forms and publications or by calling 1-800-959-5525. For a list of our tax services offices and tax centres, go to Tax services office and tax centres.

It is important to determine a person's employment status as it affects your responsibilities and it could affect the processing of the person's file under the Canada Pension Plan, Employment Insurance Act, and the Income Tax Act.

For more information about the employment status of workers, see Guide RC4110, Employee or Self-employed?

What are your responsibilities as a designated employer?

If you are a designated employer of self-employed fishers, including self-employed Indian fishers whose earnings are tax exempt, you are responsible for:

• calculating the insurable earnings of each fisher;
• deducting employment insurance (EI) premiums from each fisher and remitting the EI premiums, including the employer portion, to the Canada Revenue Agency (CRA);
• filing a T4 information return; and
• keeping records.

Calculating the insurable earnings of a fisher

The insurable earnings of a fisher are the amounts paid or payable to the fisher from the sale of a catch. These earnings do not include amounts paid for a catch or part of a catch made by other persons who were not members of the crew.

Calculating the insurable earnings of a fisher depends on the circumstances of the particular fisher. To help illustrate the calculation of earnings, we have categorized the fishers as one of two types, either "1" or "2." This labelling is done for the purposes of this guide only to help explain the calculation process.

"Type 1" fisher – a member of the crew who either:

• owns or leases the boat or specialized fishing gear used to make a catch; or
• employs other persons under a contract of service to make a catch.

"Type 2" fisher – any self-employed fisher who is not considered "type 1." This includes a single fisher who borrows a boat and specialized fishing gear and has no employees. In this situation, you should ask for the details of ownership or leasing from the person who makes the delivery.

Calculations

To calculate the insurable earnings of a "type 1" fisher, start with the gross value of a catch, not including the value of any part of a catch the crew did not make. Then subtract:

• 25% of the gross value of the catch;
• the amounts paid or payable to other members of the crew according to the share arrangement; and
• the total amount of wages paid to others employed, as employees, to make a catch.

The remaining amount is the insurable earnings of the "type 1" fisher.

To calculate the insurable earnings of a "type 2" fisher, use the amount paid or payable to the fisher from the proceeds of a catch based on the sharing arrangement agreed to prior to embarking on the fishing trip. Do not include any amount paid for a catch or any part of a catch made by other persons who were not members of the fisher's crew.

Deducting and remitting EI premiums

When you pay self-employed fishers, you have to deduct EI premiums from the first $50,800 of insurable earnings for 2016. There is no minimum amount of insurable earnings. You start deducting EI premiums on the first dollar of insurable earnings, and you only stop when you have deducted the maximum of $955.04 for 2016 (the maximum for workers in Quebec is $772.16 for 2016). At that point, the worker can continue to earn income without having any additional EI premiums deducted by the designated employer.

You have to remit the premiums you deduct, plus the employer portion, to the CRA on a regular basis. The due date of your remittance depends on the date we consider you to have paid your employee or employees.

• If you are the employer and the head fisher or the agent of a crew, we consider that you paid your employees on the last day of the week in which you received the proceeds from the sale of the catch.
• If you are the employer and the buyer who settles accounts with a fisher at intervals of more than seven days, we consider that you paid your employees on the day the account is settled.
• If you are the employer and the common agent, we consider that you paid your employees on the last day of the week in which the catch is delivered.

For information on how to deduct and remit EI premiums, see Guide T4001, Employers' Guide – Payroll Deductions and Remittances. For information on how to calculate the amounts you have to deduct from the remuneration of your employees, see Guide T4032, Payroll Deductions Tables.

Earnings of a fisher may be subject to employee and employers premiums for the Québec Parental Insurance Plan (QPIP). For information see the publication TP-1015.G-V, Guide for Employers – Source Deductions and Contributions, which you can get from Revenu Québec.

Filing a T4 information return

You have to file a T4 information return if:

• you are a designated employer and make EI premium deductions for a self-employed fisher or self-employed Indian fisher; or
• a fisher gives you a completed Form TD3F, Fisher's Election to Have Tax Deducted at Source, in a calendar year.

A T4 information return includes the T4 slips and the related T4 summary. You have to give each of the fishers and crew members two copies of their T4 slips each year on or before the last day of February following the calendar year to which the information return applies. For more information on how to fill out T4 slips and summary, see Guide RC4120, Employers' Guide – Filing the T4 Slip and Summary.

Keeping records

You have to keep records to support the following:

• the earnings of the fishers;
• the EI premiums you have to remit; and
• the dates on which the EI premiums are payable.

Your records should include:

• the name, address, and social insurance number of each crew member and the member's share of proceeds from the sale of a catch;
• the amount and date of each fisher's insurable earnings for the period; and
• the amount and date the EI premiums are payable.

Your records have to accurately reflect all transactions and contain supporting documents to substantiate your claims. Do not send your records with your T4 information return, but keep them in case we ask to see them. If we determine that your records do not support the insurable earnings you report, we may estimate the insurable earnings. Your premiums payable in 2016 would be calculated as 4.51% of our estimate.

You have to keep your records for six years. If you want to destroy them before the six-year period is over, you have to get permission from your tax services office. To do this, either use Form T137, Request for Destruction of Records, or prepare your own written request. For more information, go to Keeping records.

Examples

We have included examples to explain the various types of earnings of a fisher and how to calculate insurable earnings. For information on calculating EI premiums, see Guide T4001, Employers' Guide – Payroll Deductions and Remittances.

Online services

My Account

Using the CRA's My Account service is a fast, easy, and secure way to access and manage your tax and benefit information online, seven days a week.

To register for My Account, go to My Account for Individuals. You will need to complete two steps. You will be asked to enter some personal information and create a user ID and password or use a Sign‑in Partner. Be sure to have your current and previous year’s personal tax returns on hand when registering. After you complete step one, you will have instant access to some of your tax and benefit information. Step two includes the mailing of the CRA security code. We will mail it to the address we have on file for you. The separate mailing of the security code is a measure used to protect you from identity theft and to ensure the security of your personal information. You will have access to the full suite of services available in My Account once you enter your code.

An authorized representative can access most of these online services through Represent a Client.

Handling business taxes online

Save time using the CRA's online services for businesses. You can:

• authorize a representative, an employee, or a group of employees, who has registered with Represent a Client, for online access to your business accounts;
• request or delete authorization online through Represent a Client, if you are a representative;
• change addresses;
• file or amend information returns without a web access code;
• register for online mail, get email notifications, and view your mail online;
• authorize the withdrawal of a pre‑determined amount from your bank account;
• provide a nil remittance;
• request the transfer of a misallocated credit;
• enrol for direct deposit, update banking information, and view direct deposit transactions;
• request a refund;
• view your account balance and transactions;
• register a formal dispute (Appeal);
• request a CPP/EI ruling; and
• do much more.

To register or log in to our online services, go to:

• My Business Account, if you are a business owner; or
• Represent a Client, if you are an authorized representative or employee.

For more information, go to E-services for Businesses.

Receiving your CRA mail online

You, or your representative (authorized at a level 2), can choose to receive most of your CRA mail for your business online.

When you or your representative registers for online mail, an email notification will be sent to the email address(es) provided when there is new mail available to view in My Business Account. Correspondence available through online mail will no longer be printed and mailed. To register, select the “Manage online mail” service and follow the steps.

Using our online mail service is faster and easier than managing paper correspondence.

Authorizing the withdrawal of a pre–determined amount from your bank account

Pre‑authorized debit (PAD) is an online, self‑service, payment option. Through this option, you agree to authorize the CRA to withdraw a pre‑determined amount from your bank account to pay tax on a specific date or dates. You can set up a PAD agreement using the CRA’s secure My Business Account. PADs are flexible and managed by you. You can view historical records, modify, cancel, or skip a payment. For more information, go to Pay by pre-authorized debit.

Electronic payments

Make your payment using:

• your financial institution’s online or telephone banking services;
• the CRA’s My Payment service at Make a payment to the Canada Revenue Agency; or
• pre authorized debit at My Business Account.

For more information on all payment options, go to Make a payment to the Canada Revenue Agency.

For more information

What if you need help?

If you need more information after reading this guide, go to Farmers and fishers and Payroll or call 1-800-959-5525.

Direct deposit

Direct deposit is a faster, more convenient, reliable, and secure way to get your refunds and rebates deposited directly into your account at a financial institution in Canada.

You can choose to have all amounts deposited into one account or to have refunds and rebates from different programs deposited into different accounts.

To start direct deposit or to change the banking information you have already given us, complete Form RC366, Direct Deposit Request for Businesses, and send it to your tax centre.

You can view your direct deposit information and online transactions at My Business Account.

For more information, go to Direct deposit.

Forms and publications

To get our forms or publications go to Forms and publications or call 1-800-959-5525.

Electronic mailing lists

We can notify you by email when new information on a subject of interest to you is available on our website. To subscribe to our electronic mailing lists, go to Electronic mailing lists.

Teletypewriter (TTY) users

TTY users can call 1-800-665-0354 for bilingual assistance during regular business hours.

Service complaints

You can expect to be treated fairly under clear and established rules, and get a high level of service each time you deal with the Canada Revenue Agency (CRA); see the Taxpayer Bill of Rights.

If you are not satisfied with the service you received, try to resolve the matter with the CRA employee you have been dealing with or call the telephone number provided in the CRA’s correspondence. If you do not have contact information, go to Contact information.

If you still disagree with the way your concerns were addressed, you can ask to discuss the matter with the employee’s supervisor.

If you are still not satisfied, you can file a service complaint by filling out Form RC193, Service-Related Complaint.

If the CRA has not resolved your service related complaint, you can submit a complaint with the Office of the Taxpayers' Ombudsman.

Tax information videos

We have a tax information video series for new small businesses that provides an introduction to topics such as registering a business, GST/HST, and payroll. To watch our videos, go to Video gallery.

Date modified:

2016-08-12