Relevant Factors In Employee Or Independent Contractor Determination

A determination of whether an employee or independent contractor relationship applies between parties will significantly impact tax obligation and liability. The determination will inform an employer's or worker's withholding and remittance obligations with respect to payroll and GST/HST and in some circumstances, cause the "personal services business" rules to apply to a corporation.

Whether an employee or independent contractor relationship exists is a question of fact. There is no single factor that determines the distinction in and of itself, nor a set formula. The factors vary with the circumstances. The central question in evaluating the relationship is whether the worker is performing services for their own business or as an employee.