Personal income tax returns for 2011 are due Monday, April 30, 2012. Freelancers can take advantage of a later deadline: they have until Friday, June 15, 2012 – but any tax owing must be paid by April 30.
Posts Tagged ‘Contract/Freelancer’
Personal Income Tax Deadline is April 30
Thursday, March 29th, 2012
Don’t get stuck paying both the employer’s and employee’s share of EI and CPP
Thursday, March 22nd, 2012If the CRA determines that a staff member has been improperly treated as a self-employed person, you can be charged both the employer’s and the employee’s share of EI premiums and CPP contributions for the period in question.
Employee and employer contributions to the CPP
Tuesday, March 13th, 2012Employees and employers contribute equally to the Canada Pension Plan. In 2011, the rate is 4.95% of earnings over $3,500. Self-employed individuals pay the entire amount – that is, 9.9% of earnings over $3,500.
Consult the CRA Definitions for Employee vs Self-employed
Friday, February 17th, 2012The Canada Revenue Agency provides definitions that help you determine whether your staff should be treated as employees or self-employed. Review this material.
Only Staff on Payroll Can Apply for Benefits
Wednesday, February 8th, 2012Only staff on payroll, who contribute to the Employment Insurance plan, are eligible to apply for benefits. Freelancers are not covered.
Employee or Self-Employed? HR story highlights hazards
Monday, February 6th, 2012Staff Post
By Heather Young
From time to time I will share stories from the field – names and details obscured!
One company went through a nerve-wracking time when a former worker – who had been hired on a fee-for-service contract as a freelance consultant – tried to claim EI and insisted to the folks at HRSDC that s/he had been an employee.
The government responded by notifying the company that they were responsible for remitting both the employer and the employee portions of EI and CPP for the duration of the contract. It was up to the company to appeal this decision, and prove that the worker had been properly treated as a freelancer.
To help the organization prepare its appeal, the government provided a lengthy questionnaire, much of it based on concepts you can read about in the CRA publication Employee or Self-employed?, published online.
The company also did some research, including checking the former worker’s social networking activities, where the individual clearly self-identified as a consultant for hire. It’s unclear whether that influenced the happy ending – but I can tell you that in at least one comparable case the defendant’s Facebook page did him in.
After many hours of work and months of waiting, the company finally received the happy news that their appeal was successful.
The CRA ruling made a strong effort to be balanced, stating that “the parties did not share a common intention as to the worker’s employment status” – although the company feels the status was always clear. It outlined all the terms of employment in some detail, noting that the level of “control”, or supervision, of the employee and ownership of tools and equipment were neutral factors – they could have been interpreted to either party’s benefit. The fact that the worker was providing services personally and was not able to subcontract assigned work was deemed consistent with the worker’s contention that s/he was an employee, but the fact that the worker was free to take on other projects for personal profit, and promoted him/herself as a freelance communication consultant suggested to the CRA that s/he was “embarking on a business enterprise on his/her own account.” Weighing all factors, the CRA ruled in the company’s favour: but in reading the written ruling, it looks like it was a close call.
Arts organizations and charities secure all sorts of services on part-time, part-year contracts. It’s worth the effort to research how a particular position should be treated (employee or self-employed?), and to be crystal-clear with the worker both verbally and in a written contract.