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self-employed vs employee... TAX HELP!


TRIBE Member
I have been working as a receptionist at a holistic health clinic since May 2005. When I started working there I was told they would not be taking taxes from my pay and that at the end of the year I could pay my income tax when I do my taxes. Thinking this was fine, I put aside money for this. (I was not being paid cash, I was being paid with cheques from my boss)

Last week I asked the accountant about vacation pay (I wanted to verify it was 4% of my total income for the year, and get that money paid to me on my next pay cheque) and at that time I was informed that I am considered a contract worker and since I am self employed I am not eligible for vacation pay.

I looked into how we "determine a workers status" and found that I do not fall under the category of self employed. I am not a "freelance" receptionist. I work 9-5 each day, come to the office, use their computer, do what my employer asks, under the pay she determined, have benefits which are paid for by my employer, etc. I told the accountant that I did not think I met Revenue Canada's definition of self employed, she told me that it would be up to my boss if I was to receive vacation pay.

The T4 I was given is a T4A and has my income ($10,500) listed under "self employed commissions" with no deductions taken whatsoever. My total income this year is a bit less than $20,000 - the other jobs I had previously all deducted tax, CPP, EI, the proper things.

I am unsure of all the ramifications of being "self employed".
1. I am now responsible for paying my contribution to CPP as well as my employers contribution. Is that kosher?
2. What else am I required to pay as a self employed person?
3. If I request a ruling as to my worker status, and it is decided I am indeed an employee, is it true my employer will be fined and have to pay both her and my portion of the CPP?
4. Will this cause my boss to be audited?

I am very concerned that I haven't put away enough money, and that I
am paying amounts that should have been paid for by my employer. And I'm not sure what happens when I fill out the form to request a ruling as to my worker status...

If anyone knows anything about this or could recommend a good accountant that would be lovely.
Alex D. from TRIBE on Utility Room


TRIBE Member
fear_of_fours said:
If anyone knows anything about this or could recommend a good accountant that would be lovely.

Based on your quick description, you are an employee. In this case, your employer is on the hook for a whole whack of employer tax contributions, plus responsible for your vacation pay etc. The main test is whether there is a master/slave relationship (not my term 0 this is the term CRA uses) - it is one thing to be on a contract with a fixed term/goal whereby you act as an independent contractor (provide your own equipment etc), it is entirely another to be expected to act as an employee while your employer shirks their responsibilities to save a few bucks.

You will be responsible for withholdings etc, and as a contractor, can write off work related expenses incured as a result of your job, but from the sounds of it, your *boss* (which implies an employer/employee role) is trying to scam the system, and the penalty to them is far greater than it is to you.

In the end you will probably need an employement lawyer to help sort things out - an accountant is only goign to assist you with the surface issue of how to handle your immediate tax problem.


TRIBE Member
I think if they give you a T4... then you're an employee.

This is what happens when you work for hippies.