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Determining Independent Contractor Status

The Canada Revenue Agency (CRA) presumes that all individuals who provide a service are employees unless there is evidence to support classification of the individual as an independent contractor. Therefore, if the university engages an individual as an independent contractor, it must be able to support this position.

Determining independent contractor status is driven by specific facts and circumstances. What makes one individual an independent contractor may differ from what makes another individual an independent contractor.

As a general rule, TMU employees are not treated as independent contractors when providing services to the university, even if the services are outside of the normal duties of their position. For more details, see the Establishing Employee/Employer Relationships policy.

In addition to CRA requirements, there are many other statutory and regulatory obligations that apply to the employment relationship. Also important to note is that even if an individual is determined as a non-employee for CRA purposes, they could be considered an employee under Employment Standards, Workplace Safety and Insurance, Occupational Health and Safety, Human Rights, etc. legislation, or under the terms of TMU’s collective agreements.

Resources to determine employment relationship and payment

Independent Contractor (ICON) Form

Complete the  (PDF file) ICON form prior to beginning a new contract and return it to your HR advisor. In addition to being legislatively required for all independent contracts, it also allows you to generate a Purchase Requisition number with Financial Services in the event that independent contractor status is confirmed. If your request is urgent, please contact your HR advisor for assistance.

Employment Relationship and Payment Decision Tree

Refer to the Employment Relationship and Payment Decision Tree to help determine the employment relationship and related payments, processes and forms:

Employee Employer Relationship Decision Tree
  1. Is the work covered under a collective agreement? If yes, use the employee payment process (use eAppoint or complete appropriate form). The process is then complete. If no, ask yourself: Did the individual provide services and were/are they a Ryerson employee at the time the services were provided?
  2. If yes, use the employee payment process (use eAppoint or complete appropriate form). The process is then complete. If no, ask yourself: Did the individual provide services as an independent contractor or is the payment for products/goods?
  3. If yes, use the business payment process (complete purchase requisition - must have business number - and requires ICON form). The process is then complete. If no, ask yourself: Is the individual a nonresident of Canada?
  4. If yes, use the nonresident payment process (complete appropriate form). The process is then complete. If no, as yourself: Is this a guest lecturer per the Employee/Employer Relationship policy?
  5. If yes, use the guest lecturer payment process (use eAppoint). The process is then complete. If no, ask yourself: Is this a one-time token payment to an individual who is not a Ryerson employee and the payment is $500 or less?
  6. If yes, use the honorarium payment process (use eAppoint). The process is then complete. If no, use the honorarium payment process (use appropriate form for token payments over $500 as these will be reviewed as exceptions). The process is then complete.

Other important considerations

Other important considerations to ensure compliance with the Employment Standards Actand Canada Revenue Agency (CRA) include:

Employees' wages should be paid for time worked based on established pay schedules, e.g. monthly or biweekly, as appropriate. This means that payments cannot be withheld based on deliverables and that appointments must be processed to ensure payment on the relevant pay date. The CRA also requires remittance of statutory deductions on a monthly basis. Retroactive adjustments to these remittances should only occur on an exceptional basis.

For tax purposes, a nonresident is generally a foreign national who provides services in Canada, but does not establish residential ties. Nonresident payments are one-time payments for short-term work, e.g. Guest Lecturer.

If an individual will be providing services over several pay periods, they will need to provide evidence of a study or work permit, get a SIN card and be paid as any other similar employee at TMU.