CEC For Incorporated contractors

[isabox]

Hi,

Are incorporate contractor and sole-proprietor(self-employed) same?

My case is little complicated. More than 18 months ago, I started working for an organization(XYZ) through a job agency(JOB-Agency). After 7 months, that organization asked all of the workers coming through that recruiting agency to be incorporated. I guess that way, they saved more money. I had to be incorporated to keep my job at that time. I worked there for 10 more months like that.

So, the first 7 months I got paystubs from ----- Job Recruitment Agency(JOB-Agency)
The last 10 months, my paystubs were from this new incorporated organization(ABC incorporated).

The last 10 months: I was working in XYZ's office. And XYZ was paying checks to ABC-incorporated. Every month, I was getting a salary from ABC-incorporated.

Now, I am afraid, if the last 10 months would be counted as self-employment. I have spoken to few accountants. And everyone told me,
* since I was getting paystubs from this new ABC-incorporated.
* And every month my CPP and other taxes were deducted from my payments.
* I also have last years T4 from ABC-incorporated.

I am just an employee of ABC-incorporated. Therefore, I am not a self-employed(sole-proprietor) person. From my studies and research on CRA and CBN website, it looks like, I should be considered as an employee of ABC-incorporated(who was working at XYZ's office).

I have seen self-employed people.They do not have to worry have to monthly paystubs, or CPP or any other taxes. They just file taxes only once a year, and all the income is being considered as their personal income.

But, for my case ABC-incorporated and I: we were totally separate entities. On CRA's website, they have details for the difference between incorporated and self-employed(sole-proprietor).

Any idea? or have anyone experienced this?

 

[sabidhawan]

As long as you have pay stubs , T4 and employment letter with all the job duties you are safe. Make sure you have all 3 of them . Job letter has to be very clear and all your job responsibilities.

 

[jes_ON]

Are incorporate contractor and sole-proprietor(self-employed) same?

"Sole proprietor" is an type of incorporation status. It means you are the only owner of a business, you could have employees. Yes, if you own your own business, you are self-employed.

The last 10 months: I was working in XYZ's office. And XYZ was paying checks to ABC-incorporated. Every month, I was getting a salary from ABC-incorporated.

Now, I am afraid, if the last 10 months would be counted as self-employment. I have spoken to few accountants. And everyone told me,
* since I was getting paystubs from this new ABC-incorporated.
* And every month my CPP and other taxes were deducted from my payments.
* I also have last years T4 from ABC-incorporated.

I am just an employee of ABC-incorporated. Therefore, I am not a self-employed(sole-proprietor) person.

But, who is the owner/proprietor of ABC-Inc? If you are identified as the owner of ABC-Inc, then you are a sole proprietor, and self-employed. If someone else owns ABC-Inc, then you are THEIR employee.

Either way, you are being paid by ABC-Inc (not XYZ), therefore you need a letter of reference from ABC-Inc. If you are the only employee of ABC-Inc, do you think CIC will accept a letter of reference from yourself?