Determining Employee vs Contractor

Determining Employee vs Contractor

Most home sharing providers are considered independent contractors, which means: 

• You are not an employee of CLBC or the agency coordinating supports 

• The income is non-taxable  

• You are responsible for filing your own taxes and managing employment deductions and benefits 

• You have flexibility in how services are provided, but must meet the contract’s terms of your agreement 

It is important to understand your role and status at the time of contracting and consult with a financial advisor or accountant to help manage your obligations. 

CRA Bulletin 

The Canada Revenue Agency (CRA) has published a bulletin to help home sharing providers understand: 

• Why and in which circumstances income is classified as business or employment income 

• What deductions are available (e.g., meals, transportation, home modifications) 

• How to apply tax rules specific to caregiver arrangements 

Payments for Home Sharing 

Canada Revenue Agency Technical Interpretation 

Please note that the following information, although believed to be correct at the time of publication, may not represent the current position of the CRA. 

Income Tax Act Section 81(1)(h) Social Assistance Payments 

Paragraph 81(1)(h) of the Income Tax Act (the “Act”) states: 

“where the taxpayer is an individual (other than a trust), a social assistance payment (other than a prescribed payment) ordinarily made on the basis of a means, needs or income test under a program provided for by an Act of Parliament or a law of a province, to the extent that it is received directly or indirectly by the taxpayer for the benefit of another individual (other than the taxpayer’s spouse or common-law partner or a person who is related to the taxpayer or to the taxpayer’s spouse or common-law partner), if 

(i) no family allowance under the Family Allowances Act or any similar allowance under a law of a province that provides for payment of an allowance similar to the family allowance provided under that Act is payable in respect of the other individual for the period in respect of which the social assistance payment is made, and 

(ii) the other individual resides in the taxpayer’s principal place of residence, or the taxpayer’s principal place of residence is maintained for use as the residence of that other individual, throughout the period referred to in subparagraph (i);” 

Also, the CRA’s policy with respect to the determination of one’s principal place of residence for the purposes of the application of paragraph 81(1)(h) is found in Income Tax Technical News No. 31R2, which reads as follows: 

“An individual’s “principal place of residence” is the place where the individual regularly, normally or customarily lives. In our view, the place where the individual normally sleeps is a significant factor in making this determination.”