EMPLOYEE EMPLOYER RELATIONSHIPBy Kathie Shi

PREVIEW The difference between employee and self

employed The importance of determining employee-

employer relationshipsCanada Revenue Agency’s four criteria 1. Control2. Ownership of tools3. Chance of profit and risk of loss4. Integration

EMPLOYEE VS. SELF-EMPLOYED

Employee Self-EmployedEmployee-employer relationship

Business relationship

Paid through payroll department/ service

Paid through accounts payable department

Statutory deductions withheld from their pay

No deductions

FOUR CRITERIA

1. Control2. Ownership of tools3. Chance of profit and risk of loss4. Integration

1. CONTROL - EMPLOYEE

Interviewed Work method is determined by the employer

CONTROL - EMPLOYEE

Could be laid off or dismissed by the employer

Has to try to complete all the work that is asked of him

Perform work in their own manner

Not interviewed

CONTROL – SELF-EMPLOYED

CONTROL – SELF-EMPLOYED

Work more day and hours??

No Way

Able to choose their work

2. OWNERSHIP OF TOOLSEmployee Self-employed

Employer supplies and covers the cost of the equipments and tools for employees

Self-employed worker supplies and covers cost of their own tools and equipments

3. CHANCE OF PROFIT AND RISK OF LOST

Employee Self-employedDoes not assume any financial risk

May make profit or incur loss

4. INTEGRATIONEmployee Self-employed

Integrates his/her activities to the commercial activities of the payer

integrates the payer’s activities to his/her own commercial activities

SUMMARY Importance of determining employee-

employer relationship CRA’s 4 criteria Reference:

www.rev.gov.on.ca/en/bulletins/eht/0196.html

www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-08e.pdf

WHO HAS QUESTIONS?