The CRA decides employee vs contractor status from the real working relationship, not the contract title. The test, the factors, the cost of getting it wrong, and how to get a ruling.
Author
Karim Bitar
Karim Bitar is the lead accountant at BBA Tax Accounting Services in Ottawa and an ELITE Certified QuickBooks ProAdvisor. He and his team prepare personal and corporate tax returns, keep the books for small businesses, handle GST/HST and payroll filings, and represent clients during CRA reviews and audits. His articles explain Canadian tax rules in plain language.
Articles by Karim
Personal Services Business Rules in 2026: Is Your Ottawa Consulting Corporation at Risk?
If your consulting corporation looks like an employee of its client, the CRA can tax it as a personal services business. How the rules work, why Ottawa consultants are exposed, and how to reduce the risk.
Holding Company in Canada: Should Your Ottawa Business Set One Up in 2026?
A holding company defers tax, shields surplus cash from creditors and protects your capital gains exemption — but it costs several thousand dollars a year. Here is the threshold where it starts to pay for itself.
Lifetime Capital Gains Exemption 2026: How to Shelter $1.275 Million When You Sell Your Business
The lifetime capital gains exemption is worth $1,275,000 in 2026 — but most owners discover their shares do not qualify weeks before closing. Here is what the three QSBC tests require, and how far ahead to start.
T4A Slips in Canada: When Your Business Must File for Subcontractors
T4A slips explained for 2026: when your business must file for subcontractors, Box 048 fees, deadlines and penalties, and T4 vs T4A vs T5018.
GST/HST Quick Method in Canada: Could Your Business Save Thousands?
The GST/HST Quick Method explained for 2026: who qualifies, Ontario remittance rates, a real savings example, and how to file the GST74 election on time.
SR&ED Tax Credit in Canada: How Small Businesses Claim It in 2026
The SR&ED tax credit explained for 2026: who qualifies, how much CCPCs can claim, eligible costs, and how to file Form T661 with your Canadian tax return.
CRA Tax Instalments in 2026: Who Has to Pay and How to Avoid Interest
CRA tax instalments in 2026: who has to pay, the quarterly due dates, how the CRA calculates them, and how to avoid instalment interest and penalties.