# What is my employment status?



## ITConsultant (Mar 5, 2014)

I'm trying to decide who to put for my employer. I get asked this from time to time. I do online stuff, specifically websites, programming, apps, etc. That along with investing is how I make a living. This goes through two separate companies. One for the tech stuff, and one for the investing.

Legally I'm not employed by either company, companies do not have a payroll number, I don't take a salary, don't pay employment taxes, but I am the president of both companies and the only shareholder which receives dividends from one (sometimes both) companies.

Is it wrong to say I'm an "employee" of one or both companies for purposes of employment records in legal and government documents?


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## stardancer (Apr 26, 2009)

I would say you are self-employed


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## Just a Guy (Mar 27, 2012)

Well, you work as owner/CEO/president/pick whatever title you want for the tech company (janitor? Chief cook and bottle washer?)...which is more of an active company from the sounds of it...

The investing company can also give you such glorious sounding titles, but it sounds more like a holding company.

I'd use the tech company more so, unless you are trying to impress someone with your financial expertise.


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## Rusty O'Toole (Feb 1, 2012)

Self employed which lenders read as `bum`unless you are Donald Trump.


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## Nemo2 (Mar 1, 2012)

Consultant?


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## OhGreatGuru (May 24, 2009)

ITConsultant said:


> ...Is it wrong to say I'm an "employee" of one or both companies for purposes of employment records in legal and government documents?


Yes, it would be wrong. You are self-employed. To say otherwise is fraudulent misrepresentation.


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## ITConsultant (Mar 5, 2014)

I'm curious: for those that are saying self-employed. What is your reason for this? The companies are separate incorporated entities.


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## Eclectic12 (Oct 20, 2010)

According to CRA:


> If the worker is an employee (employer-employee relationship), the payer is considered an employer.
> Employers are responsible for deducting Canada Pension Plan (CPP) contributions, EI premiums, and income tax from remuneration or other amounts they pay to their employees.
> 
> They have to remit these deductions along with their share of CPP contributions and EI premiums, to the Canada Revenue Agency (CRA).
> ...


http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-e.html#employee_selfemployed

So unless you want to start paying CPP and EI for yourself (or run the risk of CRA followup), it looks like "self-employed" is the better choice.


Another link:
http://www.cga-bc.org/tax_matters.aspx?id=1698


From a more practical standpoint, being an employee requires a salary, does it not? 


Cheers


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## Homerhomer (Oct 18, 2010)

ITConsultant said:


> I'm curious: for those that are saying self-employed. What is your reason for this? The companies are separate incorporated entities.


Because an option : I am an owner of a company without payroll is usually not one of the available options ;-)

and self-employed best describes your situation.

If you draw the funds from the corporation via dividends it doesn't make you employee, if you take management few you are self-employed ;-)

Since you are not an employee, self employed is probably better than unemployed ;-)


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## james4beach (Nov 15, 2012)

ITConsultant said:


> I'm curious: for those that are saying self-employed. What is your reason for this? The companies are separate incorporated entities.


Slightly off topic as I knw this isn't your situation: I operated a small business and was also a consultant (in both cases a sole proprietorship) and I listed myself as self-employed.

Regarding a comment above, I did not find the banks treated me as a bum. They wanted more documentation... Notices of Assesment etc... but I had no trouble obtaining credit from both TD and RBC while self-employed. But yes, they verified income, and it's easy enough to prove income with your CRA notices.


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## OurBigFatWallet (Jan 20, 2014)

CRA uses four criteria to determine employment vs self employment. 

1. Control test. Is the person able to exercise control over the workers services
2. Ownership of tools test. Who owns the tools and who provides them
3. Chance of profit or loss. Who bears the risk of any losses 
4. Integration test. Is the worker effectively part of the organization providing the services

Although not mentioned my guess is that you own the computer used to do the tech work. You also set your own hours (control), and the chance of profit or loss lies with you. 

Therefore - you are a shareholder of both, not an employee


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## Guban (Jul 5, 2011)

ITConsultant said:


> I'm curious: for those that are saying self-employed. What is your reason for this? The companies are separate incorporated entities.


If you pay yourself and issue yourself a T4, then you are also an employee.

You sound like you are self employed because you are basically the company. You get the jobs, and your performance represents the entire performance of the company.


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## marina628 (Dec 14, 2010)

My husband always fills out credit applications as an employee even though he owns 51% of our business but he pays his CPP and takes a steady pay cheque.Our bank knows we own the business and they always accepted him as an employee so I guess it depends who is asking on how you answer the questions.I don't take a regular pay cheque as I have been retaining earnings for my retirement inside the business so I always say self-employeed.


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## Eclectic12 (Oct 20, 2010)

^^^^

... by being owner and taking a pay cheque/paying CPP, it sounds like your husband has a choice.

The OP on the other hand, isn't taking a pay cheque, is not paying employment taxes and likely isn't paying CPP/QPP or EI. The income is all dividends so I don't see "employee" as an option. 

Worse - I don't see any upside to claiming to be an employee and a lot of potential for time wasted with CRA, should the "employee" tag come to their attention. 

Even if it never pops up or is low risk - it seems dubious.


Cheers


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