Understand the tax differences between employees and contractors to make informed decisions and stay compliant.
When growing your team, it’s important to know the tax implications of hiring:
- Employees: Employers must withhold income taxes, pay pension, and unemployment taxes.
- Independent Contractors: No tax withholding is required, but you must provide T4A for payments over $500.
- Misclassification Risks: Misclassifying workers can lead to penalties and back taxes.
Confused about classifications?