Payments and earnings related to taxi drivers and drivers of other passenger-carrying vehicles

Content has been updated for clarity, completeness and plain language. No changes were made to the existing legislative requirement.

For Employment Insurance (EI) purposes, you may be considered an employer of the self-employed taxi driver or driver of other passenger-carrying vehicles, even if you do not provide a payment to them.

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  • Steps
  • References

    Steps

    1. Determine if the worker is considered a self-employed taxi driver or driver of other passenger-carrying vehicles

      The taxi driver or driver of other passenger-carrying vehicles can either be an employee or self-employed.


    2. Determine if you are considered to be an employer for EI purposes of the self-employed taxi driver or driver of other passenger-carrying vehicles

      You, as the payer for which the driver is providing driving services, are considered to be their employer for EI purposes if all of the following conditions apply:

      • The driver does not own more than 50% of the vehicle
      • The driver does not own or operate a business, this means:
        • The driver is not in a position to gain a profit or risk a loss from the operation of the taxi business
        • The driver does not have the right to operate a taxicab

      • If you are not considered to be their employer for EI purposes, do not continue to next step.

        You do not withhold CPP, EI or income tax deductions because the worker is considered self-employed.

        Generally, if you provide payments to the self-employed taxi driver or driver of other passenger-carrying vehicles for their services and you are not considered their employer for EI purposes, you need to report the amounts on a T4A slip.

        Learn more: Payments of fees for services

      • If you are considered to be their employer for EI purposes, continue to Step 3 – How to calculate insurable earnings.
    3. How to calculate insurable earnings

      If you are considered the employer for EI purposes of the self-employed driver, including self-employed First Nations drivers whose earnings are tax-exempt, you are responsible to calculate the insurable earnings of each self-employed driver based on their net revenue.

      Your calculation of the insurable earnings of the worker for a week depends if you know the self-employed driver’s actual earnings and expenses or not.

      Calculate: You know the worker’s earnings and expenses

      If you know how much the driver earned in a week and the expenses incurred while operating the vehicle during the week:

      • equals Insurable earnings of the self-employed driver are the total actual earnings (net revenue) from the driver’s employment for the week up to the maximum annual insurable earnings
      Calculate: You do not know the worker’s earnings and expenses

      If you do not know how much the driver earned in a week or the expenses the worker incurred while operating the vehicle during the week, the amount of insurable earnings is the lesser of:

      • Calculation 1
        • Days worked per week
        • multiply by 1/390 of the maximum annual insurable earnings
           
        • equals Insurable earnings of the self-employed driver
        Calculation example

        In 2024, Steve is a self-employed taxi driver. He had worked 3 days during the week. The maximum annual insurable earnings for 2024 is $63,200.

        • 3 days worked per week
        • multiply by (1/390 x $63,200)
           
        • equals $486.15 is the insurable earnings of Steve as a self-employed taxi driver using calculation 1

        Steve’s insurable earnings as a self-employed taxi driver are $486.15, the lesser amount between $486.15 (calculation 1) and $810.26 (calculation 2).

      • Calculation 2
        • 1/78
        • multiply by Maximum annual insurable earnings
           
        • equals Insurable earnings of the self-employed driver
        Calculation example

        In 2024, Steve is a self-employed taxi driver. He had worked 3 days during the week. The maximum annual insurable earnings for 2024 is $63,200.

        • 1/78
        • multiply by $63,200 is the maximum annual insurable earnings
           
        • equals $810.26 is the insurable earnings of Steve as a self-employed taxi driver using calculation 2

        Steve’s insurable earnings as a self-employed taxi driver are $486.15, the lesser amount between $486.15 (calculation 1) and $810.26 (calculation 2).

      Learn more on how to calculate the EI premiums using the driver’s insurable earnings: Calculate EI deductions


    4. Confirm which deductions you must remit

      Under special EI regulations, you must pay both the employee and employer's share of EI premiums. EI is remitted on behalf of the self-employed worker on all of their insurable earnings.

      The self-employed driver is responsible for remitting CPP contributions and income tax in the same way as other self-employed individuals.

    5. Report the payment on a T4 slip

      Depending on the self-employed driver’s situation, you must report the following amounts on a T4 slip:

      • Box 29 – Employment code 12
      • Box 24 – EI insurable earnings
      • Box 56 – PPIP insurable earnings if taxi driver or a driver of other passenger-carrying vehicle worked in the province of Quebec
      • Code 82 – Taxi drivers and drivers of other passenger-carrying vehicles – Gross income
      • Code 88 – Indian (exempt income) – Self-employment

      Learn more: How to report – T4 slip – Information for employers

Legislation

CPP: 6(1)(a)
Pensionable employment
EIA: 5(1)(a)
Insurable employment
EIA: 5(1)(d)
Employment included by regulations
EIA: 5(4)(c)
Regulations to include employment
EIR: 6(e)
Employment as a driver of a taxi or any other vehicle included in insurable employment
IECPR: 2 and 9
Insurable earnings and deemed employer for passenger vehicle operators

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