Determine if the worker’s corporation is carrying on a PSB

One of the conditions for a corporation to be carrying on a PSB is that the worker who provides services to the payer on behalf of the corporation would reasonably be considered an employee of the payer if the corporation did not exist. This is a question of fact.

Determining if the incorporated employee would have reasonably been considered an employee of the payer if not for the existence of the corporation is similar to determining if a worker is an employee or self-employed.

The factors used to determine whether an employee-employer relationship exists are the same factors used to determine whether a worker would have been an employee if the corporation did not exist. This must be analyzed on a case-by-case basis. Each case is unique and requires a thorough review of the facts.

You cannot ask for a CPP/EI ruling to determine if the incorporated employee would have been reasonably considered an employee of the payer if not for the existence of the corporation.

However, a worker who provides services for a PSB can request a ruling from CPP/EI Rulings as to whether they are an employee of the corporation carrying on a PSB or are self-employed.

Learn more about the factors to consider or if you are not sure whether the worker would reasonably be considered an employee: Guide RC4110 Employee or Self-employed.

If you determine that the worker would be reasonably considered an employee and meets the other conditions above, the worker’s corporation is considered to be carrying on a PSB.