WHAT ARE THE ADVANTAGES and DISADVANTAGES OF EMPLOYEE or SELF-EMPLOYED?


It is important to know whether you are Employee or Self-Employed contractor in terms of income tax returns and benefits and also dealing with Canada Revenue Agency (CRA).


CRA examines the working relationship with six (6) main factors in order to determine a worker’s status. These factors are:


  1. Control over the worker

  2. Ownership of tools and equipment

  3. Subcontracting work

  4. Degree of financial risk taken by the worker

  5. Responsibility for investment and management

  6. Opportunity to make profit


In both cases, whether you are Employee or Self-Employed, both have their advantages and disadvantages which explained below.


EMPLOYEE: By definition, Employee is an individual who works part-time or full-time under a contract of employment. Some of the Employee advantages and disadvantages are as following:


Employee Advantages


  • Eligible for employee benefits such as vacation pay, provincial medical plan, pension plans, workers’ compensation coverage etc.

  • Qualify for Employment Insurance (EI)

  • Canada Pension Plan (CPP) premiums paid 50 % by employer

  • Overtime payments with high rate

  • If you terminated, you are eligible for severance payment


Employee Disadvantages


  • Few expenses deductible

  • No flexibility or control over working hours and conditions

  • Need to pay Employment Insurance (EI) premiums


SELF-EMPLOYED: Self-Employed is an individual who earns themselves by using their own capital, tools, equipment and knowledge. Some of the Self-Employed advantages and disadvantages are as following:


Self-Employed Advantages

  • More expenses are deductible

  • Flexible to choose working hours

  • Can register GST/HST account even for small suppliers

  • Employment Insurance (EI) premium payment voluntarily

  • Opportunity to increase bottom line


Self-Employed Disadvantages


  • More record-keeping require

  • No qualify for Employment Insurance (EI)

  • No severance pay if terminated


Contact us: If you have any questions or inquiries regarding Employee or Self-Employed, you can contact us at 647-861-2099 or send email to info@globalabcservices.com.

Categories
Archive
Recent Posts
Follow Us
  • LinkedIn Social Icon
  • Facebook Basic Square
  • Twitter Basic Square
  • LinkedIn Social Icon
  • Facebook Social Icon
  • Twitter Social Icon
  • Instagram
  • YouTube

This website created by Future Art Services Company