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Should an employer of independent contractors report incentive payments on a T4A?
Expert: Gary Booth
Ko asked:
My question is in regards to independent contractors. I currently employ several independent contractors, and pay them "incentive payments." Do I need to report this in their T4a? (if they were considered employees, I would have included it on their T4a).
Also, provided a non-interest bearing loan. Is this a taxable benefit to them that should also be reported on their T4a?
Gary Booth answered:
In regards to the CRA issues guidelines on employees and independent contractors, normally independent contractors will issue invoices to cover their work. If they don't then a T4A would need to be issued.
I don't normally see incentive payments for subcontractors. If invoices are issued then this would be an additional invoice from the sub contractor, alternatively it would have to be put on T4A.
As for the question regarding the non-interest bearing loan, some questions need to be answered before this can be fully answered.
About the author
Gary Booth has over 20 years experience in the tax and accounting field. He operates his chartered accounting practice called Gary Booth CA Professional Corp. The six members of Gary’s team provide a wide variety of accounting and tax expertise to meet the needs of Gary’s clients.
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