For Employment Insurance (EI) purposes, you may be considered an employer of the self-employed taxi driver or driver of other passenger-carrying vehicles, even if you do not provide a payment to them.

On this page

• Steps
• References
  

  Steps

  1. Determine if the worker is considered a self-employed taxi driver or driver of other passenger-carrying vehicles

     The taxi driver or driver of other passenger-carrying vehicles can either be an employee or self-employed.

     • If the worker is an employee, do not continue to next step.

       You must deduct CPP, EI and income tax as you would for your other employees.

       Learn more: How to calculate

       If you are not sure if the worker is an employee or self-employed for CPP/EI purposes
       

       It is important to determine if a worker is an employee or self-employed. Employment status has direct impacts on your reporting and withholding requirements for the worker under the Canada Pension Plan (CPP), Employment Insurance Act (EIA) and the Income Tax Act (ITA).

       You need to consider multiple factors to determine if the worker is an employee or self-employed.

       Learn more about the factors the CRA considers when determining a worker’s employment status: Employee or Self-employed

     • If the worker is a self-employed taxi driver or driver of other passenger-carrying vehicles, continue to Step 2 – Determine if you are considered to be an employer for EI purposes of the self-employed taxi driver or driver of other passenger-carrying vehicles.

  2. Determine if you are considered to be an employer for EI purposes of the self-employed taxi driver or driver of other passenger-carrying vehicles

     You, as the payer for which the driver is providing driving services, are considered to be their employer for EI purposes if all of the following conditions apply:

     • The driver does not own more than 50% of the vehicle
     • The driver does not own or operate a business, this means:
       
       • The driver is not in a position to gain a profit or risk a loss from the operation of the taxi business
       • The driver does not have the right to operate a taxicab

     • If you are not considered to be their employer for EI purposes, do not continue to next step.

       You do not withhold CPP, EI or income tax deductions because the worker is considered self-employed.

       Generally, if you provide payments to the self-employed taxi driver or driver of other passenger-carrying vehicles for their services and you are not considered their employer for EI purposes, you need to report the amounts on a T4A slip.

       Learn more: Payments of fees for services

     • If you are considered to be their employer for EI purposes, continue to Step 3 – How to calculate insurable earnings.

  3. How to calculate insurable earnings

     If you are considered the employer for EI purposes of the self-employed driver, including self-employed First Nations drivers whose earnings are tax-exempt, you are responsible to calculate the insurable earnings of each self-employed driver based on their net revenue.

     Your calculation of the insurable earnings of the worker for a week depends if you know the self-employed driver’s actual earnings and expenses or not.

     Calculate: You know the worker’s earnings and expenses

     If you know how much the driver earned in a week and the expenses incurred while operating the vehicle during the week:

     • equals Insurable earnings of the self-employed driver are the total actual earnings (net revenue) from the driver’s employment for the week up to the maximum annual insurable earnings
     Calculate: You do not know the worker’s earnings and expenses

     If you do not know how much the driver earned in a week or the expenses the worker incurred while operating the vehicle during the week, the amount of insurable earnings is the lesser of:

     • Calculation 1
       
       • Days worked per week
       • multiply by 1/390 of the maximum annual insurable earnings
         
       • equals Insurable earnings of the self-employed driver

       Calculation example

       In 2024, Steve is a self-employed taxi driver. He had worked 3 days during the week. The maximum annual insurable earnings for 2024 is $63,200.

       • 3 days worked per week
       • multiply by (1/390 x $63,200)
         
       • equals $486.15 is the insurable earnings of Steve as a self-employed taxi driver using calculation 1

       Steve’s insurable earnings as a self-employed taxi driver are $486.15, the lesser amount between $486.15 (calculation 1) and $810.26 (calculation 2).

     • Calculation 2
       
       • 1/78
       • multiply by Maximum annual insurable earnings
         
       • equals Insurable earnings of the self-employed driver

       Calculation example

       In 2024, Steve is a self-employed taxi driver. He had worked 3 days during the week. The maximum annual insurable earnings for 2024 is $63,200.

       • 1/78
       • multiply by $63,200 is the maximum annual insurable earnings
         
       • equals $810.26 is the insurable earnings of Steve as a self-employed taxi driver using calculation 2

       Steve’s insurable earnings as a self-employed taxi driver are $486.15, the lesser amount between $486.15 (calculation 1) and $810.26 (calculation 2).

     
     

     Learn more on how to calculate the EI premiums using the driver’s insurable earnings: Calculate EI deductions

     • If the payments are made to a self-employed First Nations driver, do not continue to next step.

       Learn more about if the tax exemption and specific reporting requirements apply: Payments to First Nations workers.

     • If the payments are not made to a self-employed First Nations driver, continue to Step 4 – Confirm which deductions you need to remit.

  4. Confirm which deductions you must remit

     Under special EI regulations, you must pay both the employee and employer's share of EI premiums. EI is remitted on behalf of the self-employed worker on all of their insurable earnings.

     The self-employed driver is responsible for remitting CPP contributions and income tax in the same way as other self-employed individuals.

  5. Report the payment on a T4 slip

     Depending on the self-employed driver’s situation, you must report the following amounts on a T4 slip:

     • Box 29 – Employment code 12
     • Box 24 – EI insurable earnings
     • Box 56 – PPIP insurable earnings if taxi driver or a driver of other passenger-carrying vehicle worked in the province of Quebec
     • Code 82 – Taxi drivers and drivers of other passenger-carrying vehicles – Gross income
     • Code 88 – Indian (exempt income) – Self-employment

     Learn more: How to report – T4 slip – Information for employers

References

Resources

• CPP/EI explained
• How to get a CPP/EI ruling
• What to expect during a payroll examination

Legislation

CPP: 6(1)(a)

Pensionable employment

EIA: 5(1)(a)

Insurable employment

EIA: 5(1)(d)

Employment included by regulations

EIA: 5(4)(c)

Regulations to include employment

EIR: 6(e)

Employment as a driver of a taxi or any other vehicle included in insurable employment

IECPR: 2 and 9

Insurable earnings and deemed employer for passenger vehicle operators