Tax & Trade Blog

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EMPLOYEE OR INDEPENDENT CONTRACTOR?

SIGNIFICANT TAX & LEGAL CONSEQUENCES COME WITH MISCLASSIFICATION

One area of Indirect Tax that is often underemphasized and underappreciated by businesses and tax professionals alike is the proper classification of employees and independent contractors. Canada’s rules generally mirror those in the United States, and in both jurisdictions, misclassification of a worker (i.e., classifying the worker as an independent contractor instead of an employee) can give rise to significant tax and legal consequences.

In this Report, we review the Canadian and U.S. rules, and the challenges businesses face in navigating this classification process.

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EMPLOYEE OR INDEPENDENT CONTRACTOR?

SIGNIFICANT TAX & LEGAL CONSEQUENCES COME WITH MISCLASSIFICATION

One area of Indirect Tax that is often underemphasized and underappreciated by businesses and tax professionals alike is the proper classification of employees and independent contractors. Canada’s rules generally mirror those in the United States, and in both jurisdictions, misclassification of a worker (i.e., classifying the worker as an independent contractor instead of an employee) can give rise to significant tax and legal consequences.

In this Report, we review the Canadian and U.S. rules, and the challenges businesses face in navigating this classification process.