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:
Control over the worker
Ownership of tools and equipment
Degree of financial risk taken by the worker
Responsibility for investment and management
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:
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
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:
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
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 email@example.com.