# Non-T4 Income



## TaxedUser (Apr 26, 2015)

I worked on the side on the weekends in 2014. I did not get a T4 because I believe my employer considers me to be a contractor. How do I claim this income? Any help would be appreciated.


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## stardancer (Apr 26, 2009)

Need more info- did you only work for 1 employer? How much was it? Did you have to provide your own tools, etc? Depending on the type of work and the conditions, you were either self-employed and can write off some expenses, or you were a small part-time employee and the income would go on line 104.


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## TaxedUser (Apr 26, 2015)

stardancer said:


> Need more info- did you only work for 1 employer? How much was it? Did you have to provide your own tools, etc? Depending on the type of work and the conditions, you were either self-employed and can write off some expenses, or you were a small part-time employee and the income would go on line 104.


Thank you for your reply. I worked for one employer as a cleaner. I have had to buy my own cleaning material (such as, a broom, etc.) on a couple of occasions, mainly because I was not getting replacement materials in a timely manner. It was not necessarily a requirement of my employment to provide my own tools considering all that was needed were a broom and a mop. I made a total of approximately $8000. If this type of work is considered self-employed, have I had to incorporate a business to do this?

Thank you.


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## AltaRed (Jun 8, 2009)

TaxedUser said:


> If this type of work is considered self-employed, have I had to incorporate a business to do this?


No. You can be a sole proprietor type business, the most common type amongst, for example, home based businesses. Some corporations do insist on incorporation to issue contract work (to avoid employee labels) but that is more typical of higher paid professionals working for bigger corporations.


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## TaxedUser (Apr 26, 2015)

AltaRed said:


> No. You can be a sole proprietor type business, the most common type amongst, for example, home based businesses. Some corporations do insist on incorporation to issue contract work (to avoid employee labels) but that is more typical of higher paid professionals working for bigger corporations.


Thanks for the reply, Alta. I need help with figuring out how to claim the income, i.e. should it be claimed in Line 104 as has been previously suggested, or does my work fall more in the category of self-employment. If it falls in the self-employment category, where does one claim it on the form, please?


Thanks.


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## OptsyEagle (Nov 29, 2009)

Most likely you were not self-employed, but your employer was too lazy to deal with payroll items like withholding taxes, EI and CPP and more likely too cheap to pay EI premiums and CPP contributions on your behalf. The problem you have is doing anything about it. 

If I were in your position I would either add it to line 104 (other employment income) or fill out a T2125 for self-employment income. With the later option you will definitely be responsible for both yours and the employers share of CPP. Those amounts will add up to about 9.9% of your income (so almost $800 for CPP alone), unless this was your only income for 2014. You will be allowed a tax credit for half of that and a tax deduction for the other half, which should reduce your taxes a little due to the CPP, by a couple hundreds dollars, plus or minus a little. All the obligations for CPP payable is determine on schedule 8.

Even if you use line 104, CRA will most likely come back later and ask questions to determine if you should pay CPP on this and since it is work income, the answer will end up being YES and hence the amount owing will be asked at that time plus interest. This is not for certain, but in larger amounts they do this and I would think $8,000 would qualify as a large amount. Where they don't ask is if you were a waiter and earned $300 in tips. They would probably ignore the CPP obligations in that situation. In that example I am just giving my guess, with no actual experience to go along with it.

Anyway, that is what I would do. Probably the T2125 route. 

I suspect the proper way would have been for your employer to have declared you an employee and withheld the proper amounts and paid his share of it, but he is not the first one to attempt to do things this way. They may catch on to his abuse someday, especially during a CPP audit of the use of line 104, and if that happens he will wish he had done things properly when CRA gets done with him, but as I said, there is probably not much you can do about it.

Maybe others have some thoughts.


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## stardancer (Apr 26, 2009)

Partly it depends on how much the income was and how deeply you will be going into an extra job. If the pay was only (up to) $1000, I would probably just put it on line 104 (employment without a T4 and no expenses). However, since you did have to buy some of your own materials, you probably should go the T2125, self-employed route, so you can take advantage of the expenses to offset the extra CPP premiums. You don't have to incorporate; this would leave you free to add to your cleaning business should you decide to expand. Just make sure you keep good records (income and expenses) in case CRA gets curious.


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