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Are You Classed as an Employer When You Hire a Baby Sitter?

Employer or self employed tax rulings

You go out to work every day and you know that your employer has certain obligations when it comes to paying you each week. Your boss has to follow the CRA tax rules for payroll. You have to hire a baby sitter every day for the children so does this make you an employer too? Are you your babysitter’s boss? If so, then you too have some CRA tax rules to follow.
 

This possibility could exist if you have set regular working hours for the babysitter which may be very likely if you are working a full time job and have pre-schoolers. Also, if you are taking on the role of assigning and supervising the responsibilities of the babysitter this is considered as well when determining if you are classified as an employer. You may find yourself taking on the role of being a sole proprietor, and in this case you will need to register with the CRA as such and get yourself a payroll account.

 

Each case is different and this often leads to confusion. For example, you may use two babysitters during the week so do this mean they are both employee’s? Being as this has been so confusing for many working parents and in other industries as well the CRA will allow you to apply for a ruling based on your circumstances to determine if you are an employer and your babysitter is an employee.

 

In order to come to a decision the CRA will come to a conclusion based on several factors. First they will want to know what you and your sitter’s understanding is of your roles in this situation.  They will also want to know what control you have over the babysitter in regards to their obligations. For example, do you set specific hours for that individual, do you assign specific tasks that must be carried out during the day. Does the babysitter have the option of bringing in someone else to take care of the children if she chooses to do so?

 

The government will also look at any written contracts that may exist. These are just a few of the factors that have to be considered and there will be several others that the CRA has.

 

This is not something you want to ignore, so if you are unclear about your situation as being a potential employer to your babysitter you may want to hire a Toronto accountant to assist you with your taxes and who can also help you with asking for a ruling. He may be able to provide you with the answers ahead of time as he will have a clear understanding of the tax laws surrounding this situation.

 

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Sam Seidman, CPA, CA, LPA
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Toronto, Ontario
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Email: sam@torontoaccountant.ca

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