RSM324H1 Chapter Notes - Chapter 4: Term Life Insurance, Loan, Independent Contractor
Document Summary
Individuals provide services at full direction and control of employer, in return for salary/wage/compensation. Providing services as an independent contractor, individual as great direction and control --> self-employed --> business income. 4 tests to determine ei (based on relationship not nature of service) Chance of profit or loss test - self-employed can earn a profit and bears the risks of realizing a loss; whereas an employer assumes all risk of profit/loss. An integral part of the business - the individual is probably an employee. Employee rights, benefits, etc. an accessory to the business - a self-employed contractor. If needed, courts consider the common understanding of the relationship - as highlighted on a written contract. All remuneration (including gratuities, bonuses, honoraria, director"s fees) included in ei when it is received by employee. All benefits (with specific exceptions) by virtue of employment are taxable. All amounts received as allowance (with specific exceptions) for personal living expenses / others are included in ei.
