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Should you be paying EI premiums for your nanny?

November 05, 2012 at 2:24 PM

In a May 30, 2012 Tax Court of Canada case, the issue was whether the child care provider was an employee (contract of service) or self-employed (contract for services).

The Court found that the child care provider was an employee and noted that the work was executed under a contract of service because of its regularity, continuity and permanent work; supervision; the beginning and end of work decided exclusively by the payer; the lack of autonomy of the guardian; and exclusivity.

Also, the form of compensation, the power to intervene and/or unilateral control held by the payer and inequality in a contractual relationship all indicated an employment relationship.  The parties were not equal in negotiations.

Therefore, the parents were required to remit Employment Insurance (EI) on behalf of their employee and, the employee was entitled to apply for EITax Tips & Traps 2012