This article provides information on what the Canada Revenue Agency (CRA) looks at when determining whether a courier is an employee or a self-employed worker.

Employees and self-employed workers have different responsibilities, benefits, and entitlements, and it is important for both, as well as for their employers and payers, to be aware of these differences. For more information, see Responsibilities, benefits and entitlements for employees and self-employed workers.

If after reading this article, you are still unsure of a courier’s employment status, see How to request a ruling.

Employer responsibilities

All employers are required by law to deduct Canada Pension Plan (CPP) contributions and employment insurance (EI) premiums from most amounts they pay to their employees. Employers have to remit these amounts to the CRA along with their share of CPP contributions and EI premiums.

For more information on employer responsibilities and obligations, go to our Payroll menu page.

How to decide if a courier is an employee or a self-employed worker

The CRA looks at the working relationship between the courier and the payer. Continue reading to learn about indicators that can help you decide whether a courier is an employee or a self-employed worker.

For general information about deciding whether a worker is an employee or is self-employed, see Guide RC4110, Employee or Self-employed

Is the courier an employee?

Generally, an employee is someone who is hired to carry out specific duties under the direction and control of the party that hired them. Under the terms and conditions of employment, an employee is paid a salary or an hourly rate of pay which can take different forms (pre-determined fixed amount, commission, or a combination of the two). An employee is also not in a position to make a business profit or suffer a business loss. An employee’s opportunity to earn higher income is usually limited to working longer hours or receiving a bonus, if the employer approves a bonus or the need for longer hours. Also, an employee does not operate their own business; instead, their work forms an important part of the employer’s business.

The following are some indicators that can help you decide whether a courier is an employee. Keep in mind that this is not a complete list and not all of the following indicators will be present in every situation. Please remember that all facts pertaining to the working relationship need to be considered.

Indicators that a courier is an employee

The employer:

For example disciplinary actions could include: for the first refusal of calls, the courier will be placed at the bottom of the drivers' list; for the second refusal, the courier will have to meet with the manager; and for the third refusal, the courier will be suspended for one day.

 The courier:

Is the courier self-employed?

A self-employed worker carries on their own business and not the business of another person. The self-employed worker enters into a contract for services (business relationship) with their customers and can work when and for whom they choose.

For more information on the responsibilities of self-employed workers, go to Business taxes or Small businesses and self-employed income.

In this relationship, the self-employed worker is not under the direction or control of the payer. The self-employed worker is free to act as they please when it comes to how the work is done and how to fulfill the obligations of the contract.

The following two sections list some indicators that can help you decide whether a courier is a self-employed worker. Keep in mind that this is not a complete list and not all of these indicators will be present in every situation. Please remember that all facts pertaining to the working relationship need to be considered.

Indicators that a courier is self-employed

Generally, the indicators that a courier is an employee, listed above, are not present, and a self-employed courier:

Business presence

The fact that the courier has a business presence may show that they are self-employed. Listed below are some examples of a business presence. The self-employed courier:

Factors that may prove to be inconclusive

There are certain facts about the working relationship of couriers that may be considered to be neutral (because they apply to employees and self-employed workers).

For example, the employer can instruct the courier to make deliveries between 8 a.m. and 5 p.m. in a certain area of the city and to not change the work schedule without talking to the employer first. This is to make sure that the conditions of the contract between the payer and its customer can be met and does not indicate control over how the work is to be done.

Can a courier be considered as an employee and a self-employed worker?

No matter which classification the worker falls under, they cannot be considered both an employee and a self-employed worker under one contract or agreement. Each case must be reviewed on its own merits. It is however possible for a worker to be considered an employee under one contract or agreement while at the same time being considered a self-employed worker under another contract or agreement.

Example of a worker who is an employee and a self-employed

Ms. J is an employee of ABC Couriers. She works for the company delivering packages on a set route, between 9 am and 2 pm, Monday to Wednesday. She is provided with a company truck to make the deliveries and has a credit card from the company to pay for gas expenses. She has a uniform she must wear. She has to deliver the packages herself and needs permission to be absent from work. The company is responsible for handling complaints received from clients. Ms. J is paid every two weeks and the company provides benefits such as paid vacation, paid leave and medical and dental insurance.

Ms. J is also a self-employed worker and she advertises her delivery services to transport various goods in the local newspaper. She has registered her business, and operates from her home office. She owns equipment such as a van, trolleys, and office supplies. She can accept or refuse any delivery contract based on her availability and determines the prices of her services. During busy seasons, she also hires and pays helpers so she can take on more work from clients. Each month, she bills her clients and collects payments from them.    

In this example, Ms. J is considered an employee under her contract with ABC Couriers while at the same time she is considered self-employed for the work performed for different clients.


In general, for purposes of the Canada Pension Plan and the Employment Insurance Act, where a worker operates through their own corporation and that corporation enters into a contractual arrangement to provide services to another party, the other party will not normally be seen as being the worker’s employer. This does not mean that the worker is self-employed. The worker, in most cases, would be an employee of their own corporation.

Personal services business

A personal services business (PSB) is a business that a corporation carries on to provide services to another entity (such as a person or a partnership) that an officer or employee of that entity would usually perform. Instead, an individual performs the services for the corporation. That individual is called an incorporated employee.

If your corporation is considered a PSB for purposes of the Income Tax Act, you may be interested in reading the Withholding and reporting requirements (PDF 233 KB) document to learn about the tax implications and reporting requirements.

How to request a ruling

If a courier or a payer is unsure of the courier’s employment status, either party can request a ruling from the CRA to have the status determined. More information on the ruling process is available at How to get a CPP/EI ruling.

For information on the possible implications of a CPP/EI ruling, go to Have you received a CPP/EI ruling?

For more information

To get more information, call the CRA’s business enquiries line at 1-800-959-5525.

Legislative references

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