Heavy machinery workers (Owners and operators)


To determine if a person is an employee or a self-employed worker, the Canada Revenue Agency (CRA) looks at the factual working relationship between the worker and the payer. This article provides information on facts related to workers who own heavy machinery and operate it, and offers indicators that can help you determine whether a worker in this situation is an employee.

For example, in the forestry industry, types of heavy machinery may include: skidders, fellers, bunchers, forwarders, delimbers, slashers, harvesters, log loaders, and chippers.

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

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 must remit these amounts to 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.

Agreements between the worker and the payer

There might exist two separate agreements between a worker who owns and operates heavy equipment and the payer that hires the worker. Firstly, a payer may hire the worker as an employee (we refer to this agreement as the employment contract). Secondly, the payer may rent the worker's heavy machinery under a separate contract with the worker (we refer to this contract as the rental contract).

For the worker to be an employee, the two agreements must be distinct and independent from each other. For example, if the heavy machinery owned by the worker is not operating, the employment contract of the worker with the payer must remain in force. Any remuneration for the worker's services under the employment contract and any amounts paid for the heavy machinery rental must be distinct from each other. The terms and conditions of both agreements can be contained in one written contract.

All terms and conditions of these agreements, whether in writing or agreed to verbally, must be analyzed to determine the nature of the relationship between the parties.

Indicators of an employer-employee relationship

Generally, an employee is someone who is hired to perform specific duties under the direction and control of the party that hired them. Under the terms and conditions of employment, a worker is not normally in a position to make a profit or incur a loss. An employee is not perceived as operating their own business, but rather as being an integral part of the payer's business.

The following are some indicators that can be used to help determine whether a worker is an employee. Keep in mind that this list is not exhaustive and not all of the following indicators may be present in every situation. Please remember that all facts pertaining to the working relationship need to be considered.

To distinguish a rental contract from an employment contract, the rental contract should include certain points indicating that the lessee (payer) assumes control of the machinery for the duration of the agreement. The following points should be covered in a rental contract:

If a worker is an employee, the earnings from the employment contract are considered employment income and are subject to CPP, EI, and income tax deductions.

How to request a ruling

If a worker or payer is not sure of the worker's employment status, either party can request a ruling by the CRA to have the status determined. More information on the ruling process is available in 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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