what are 4 implications when someone is an employee to the employer
pays share of CPP/EI, withholds and remits income tax, provides benefit plan, provides severance
what are 2 implications when someone is an employee to the employee
pays share of CPP/EI, protected from termination without cause or compensation
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what are 4 implications when someone is an employee to the employer
pays share of CPP/EI, withholds and remits income tax, provides benefit plan, provides severance
what are 2 implications when someone is an employee to the employee
pays share of CPP/EI, protected from termination without cause or compensation
what are 4 implications when someone is self employed to the employer (payor)
does not pay CPP/EI, does not withhold and remit income tax, does not pay benefits, no severance
what are 4 implications when someone is self employed to the employee (contractor)
pays CPP, provides own benefit plan, remits income tax instalments, can be terminated at any time for any reason
what are 4 general implications when someone is self employed
income reported on accrual bases, registered for gst/hst, all classes of cca are available, expenses can be deducted against all income sources
what are 4 general implications when someone is an employee
income recorded on cash basis, expenses limited to commission income, can only deduct cca on motor vehicles and aircraft, gst/hst rebate
what are the 3 economic reality tests
control, tools, profit/loss
describe the control test
who has the right to give orders on the work
describe the ownership of tools test
who bears the cost of the tools to do the job
describe the profit/loss test
is there an opportunity to make a profit/loss and is the worker paid per job
what are the badges of trade when deciding income/capital treatment for transactions (8)
relation to business, nature of activity, nature of assets, number and frequency, length of ownership, supplemental work, causes of disposition, corporate objects or partnership agreements
what is the implication to an individual when a sale is classified as income
fully taxed, no PRE eligibility if home sold
what is the implication to an individual when a sale is classified as capital
taxed at 50%, PRE eligible where home is sold
what is the implication to a CCPC when a sale is classified as income
fully taxed as active business income, taxed at the low small business rate if earned in canada
what is the implication to a CCPC when a sale is classified as capital
taxed at 50% and included in aggregate investment income, non taxable part goes into capital dividend account
what is the anti flipping tax rule
gain on residential property owned less than one year is classified as income