Transcript

Host: Welcome to the segment called Do I have employees/Am I an employer?, part of the Payroll Information for a New Small Business video.

This segment mentions links where you can get more information. You can find all these links on the Related links for this segment.

I'm your host, Kathleen Sinclair.

With me is Frank Stewart. Welcome Frank.

Subject matter expert: Thank you, Kathleen.

Host: Before we get into discussing the basics of payroll for an employer, I think that it would be worthwhile to understand what the CRA means when they call someone an employer.

Subject matter expert: Right. Well, the CRA generally considers an employer as someone who:

• pays salaries or wages;
• pays tips or gratuities;
• pays bonuses or vacation pay; or
• provides benefits or allowances to employees.

Host: That's pretty clear so far. But is everyone who works for a business necessarily an employee?

Subject matter expert: No, a worker can either be an employee or a self-employed individual.

The distinction will directly affect how the rules of employment insurance, Canada Pension Plan, and income tax apply.

Host: Does that really make a difference for the potential employer though?

Subject matter expert: Yes, it makes a difference.

Employers have certain obligations under the Employment Insurance Act, the Canada Pension Plan, and the Income Tax Act. If a payer is an employer and does not comply with these obligations, they may be liable for the amounts not deducted. They may also have to pay a penalty and interest.

There are factors to help you determine if a person working for you is self-employed or an employee. We will look at those factors in the segment of this video called Determining if a worker is an employee or is self-employed.

Host: Thank you Frank.

This concludes the segment called Do I have employees/Am I an employer? part of the CRA's Payroll Information for a New Small Business video. Thank you for watching.