Are you an employer?

Employers have responsibilities they must fulfill. Employers who do not comply with the payroll requirements may have to pay the deductions not withheld, a penalty, and face other consequences.

Employment status directly affects a worker’s entitlement to employment insurance benefits under the Employment Insurance Act. It can also affect how a worker is treated under other legislation such as the Canada Pension Plan and the Income Tax Act. Because of this, it is important that you know whether a worker is an employee or a self-employed individual.

The facts of the working relationship as a whole decide the employment status. However, we generally consider you to be an employer if:

• you pay salaries, wages (including advances), bonuses, vacation pay, or tips to your employees; or
• you provide certain taxable benefits, such an automobile or allowances, to your employees.

Although a written contract might mean that an individual is self-employed (and therefore working under a contract for services), we cannot consider the individual as self-employed if there is evidence of an employer-employee relationship. This relationship is referred to as employment under a contract of service

If you or a person working for you is not sure of the worker's employment status, either one of you can request a ruling to determine the status. If you are a business owner, you can use the "Request a CPP/EI ruling" service in My Business Account.

A worker can ask for a ruling by using the My Account service. Choose “Submit documents,” then “I do not have a case or reference number,” and finally “Form CPT1 or documents for a CPP/EI Ruling request.”

You can also use Form CPT1, Request for a Ruling as to the Status of a Worker Under the Canada Pension Plan and/or the Employment Insurance Act and send it to your tax services office.

For more information on employment status, see Guide RC4110, Employee or Self-Employed?.

Are you an employer, a payer, or a trustee?

• If no, payroll will not apply.
• If yes, you have to follow the payroll requirements. See Opening a payroll program account.

Forms and publications

• Guide RC4110, Employee or Self-Employed?
• Form CPT1, Request for a Ruling as to the Status of a Worker Under the Canada Pension Plan and/or the Employment Insurance Act

Multimedia

• Video: Do I have employees? Am I an employer | 2:03 min.
• Webinar: Employee or Self-Employed? | 27:43 min.

Video: Do I have employees? Am I an employer

Webinar: Employee or Self-Employed?

Date modified:

2017-01-25