Placement and employment agency workers

The following guidelines apply to placement or employment agencies that hire workers:

1. An agency that hires employees (even if they are located at a client’s premises) has to deduct CPP contributions, EI premiums, and income tax from amounts they pay to these employees. The agency also has to report these amounts on a T4 slip.
2. When an agency places workers in an employment under the direction and control of a client of the agency and the agency pays the worker, the agency has to deduct CPP contributions and EI premiums, but not income tax. The agency has to prepare a T4 slip for the worker.
3. When an agency places workers in an employment under the direction and control of a client of the agency and the client of the agency pays the worker, the client has to deduct CPP contributions and income tax but not EI premiums. The client has to prepare a T4 slip for the worker.
4. An agency that hires a worker under a contract for services does not have to deduct CPP contributions, EI premiums, or income tax since the worker is self-employed. Neither the agency nor the client is required to file a T4 slip. However, the agency may be required to file a T4A slip. For more information, see T4A slip – Information for payers.

The gross earnings of workers described in paragraphs b) and c) must be reported on their T4 slip. For reporting instructions, see T4 slip – Information for employers.

See the reporting instructions on how to complete the T4, Statement of Remuneration Paid (slip).

Related topics

• Placement/employment agencies