Understand the impact of employment status
Employment status directly affects a person's entitlement to employment insurance (EI) benefits under the Employment Insurance Act. It can also have an impact on how a worker is treated under other legislation such as the Canada Pension Plan and the Income Tax Act.
Employee status
In an employer-employee relationship, the payer is considered an employer and the worker an employee. Employers are responsible for deducting Canada Pension Plan (CPP) contributions, EI premiums, and income tax from remuneration, or other amounts they pay to their employees. Employers must remit these deductions along with their share of CPP contributions and EI premiums to the Canada Revenue Agency (CRA).
An employer who fails to deduct the required CPP contributions or EI premiums must pay both the employer's share and the employee's share of any contributions and premiums owing, plus penalties and interest. For more employer information, go to Calculate payroll deductions and contributions.
If the province of employment is Quebec
If the employee's province of employment is Quebec, their employer must deduct Québec Pension Plan (QPP) contributions instead of CPP contributions. Employers must also deduct Québec Parental Insurance Plan (QPIP) premiums. For more information, go to Source Deductions and Employer Contributions | Revenu Québec.
Self-employed status
If the worker is self-employed, they must operate a business and be engaged in a business relationship with the payer. For more information on tax obligations for self-employed workers, go to Business taxes.
Self-employed workers pay both the employer's and the employee's share of Canada Pension Plan (CPP) contributions when they file their T1 income tax and benefit return using Form 5000-S8 Schedule 8, Canada Pension Plan Contributions and Overpayment (for all except QC).
Self-employed workers do not pay EI premiums unless they opt into the EI program for access to EI special benefits. These include maternity, parental, sickness, compassionate care, and family caregiver benefits. For more information, go to Benefits for self-employed people.
For more information on the payer’s responsibilities, go to Payments of fees for services.
If the self-employed worker's province of residence is Quebec
If the self-employed worker's residence is Quebec, they must pay Québec Pension Plan (QPP) contributions and Québec Parental Insurance Plan (QPIP) premiums. For more information, go to Contributions and Premiums Payable by a Self-Employed Person | Revenu Québec.
Learn more: Responsibilities, benefits and entitlements for employees and self-employed workers.