BU357 Chapter 3: Chapter 3- Employment Income
Document Summary
For tax purposes, the distinction between an employee and an independent contractor is important b/c: The deductibility of expenses is considerably more restricted for employees self- employed individuals may be in a position to claim more deductions. Employers must remit income tax and ei and cpp payments to cra for employees only. Ineligible for general ei benefits (special benefits like maternity, parental, sickness, and compassionate care benefits), holidays, and employer-paid or other non-cash benefits. Potential liability issue for the services they perform. Lack job security, and assume increased economic risk. Independent contractors are treated as businesses and are allowed to deduct all reasonable expenses incurred for the purpose of gaining or producing income from business, except capital outlays (cost of land and other fixed assets) Employees strictly limited to deductions listed in section 8. For income tax purposes: self-employed status preferred by both worker and payer.
