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What are the Tax implications for Ontario Truck Drivers?

Ontario Truck Drivers and Canada Tax

It can be really difficult to know how to classify your truck driving services when it comes to the expectations of the Canada Revenue Agency.

Perhaps you are an independent driver who provides transport services for multiple companies. You have no business name or business number.

Or maybe you take on long haul contracts through a company that provides drivers for large firms in need of this service.

Then again you may own your own truck and provide services under a sole proprietorship.

So where do any of these circumstances leave you as far as your tax obligation with the CRA?

It is really important that you fully understand the difference between being employed and self employed.

If you are working for a trucking company and they are making all of the necessary deductions from your pay like the tax, EI premiums and CPP then you are considered an employee of that company.

The CRA has a set criteria that they use to determine whether the status of an individual performing work for a company is that of an employee or as a self employed individual.  What it comes down to is how both parties view their arrangement.

Does the employee view the agreement as a contract of service, which indicates an employee-employer relationship. Or was the intention to enter into an agreement of contract for services. If the truck driver is offering his services for whenever a job becomes available just because they are not working for the company five days a week from 9 till 5 doesn’t mean they aren’t an employee. On the other hand if a trucker is offering his truck and driving services to a company as well as several others then it would more likely be a self employed situation.

It is not uncommon for employees who offer truck driving services to incur expenses that are simply not covered by the company they are providing services to. Usually these are for meals, and the CRA has made allowances for this, including lodging, if the proper criteria is met. Usually only a portion of this type of expense is allowed. Although, if you are a long haul driver then the amount eligible for deduction may be higher.

There is a lot of confusion for Canadian truckers when it comes to their tax obligations and tax filings. It is well worth utilizing the services of a qualified accountant who will ensure that you are completing your taxes properly and are also getting all of the tax advantages applicable to you in respect to your status as either an employee or self employed trucking service.

 

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

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