CFO Services | Best Practices For Hiring

What can business owners do when they are hiring to minimize this risk is a question that should ask themselves. The biggest thing that business owners can do to completely avoid this risk says CFO service is that they can make it a rule that they will never hire independent contractors who are not incorporated. this will eliminate all risk to the company, and ensure they never will be audited by the CRA and found guilty.

So what can business owners do if they have already made this mistake, and they would like to minimize their risk? CFO services say that business owners can at any point in their business switch those contractors to employees. Once they start taking payroll deductions off of their paychecks, they will be considered employees and business owners will eliminate that risk in their business moving forward. Another strategy they can use to ensure that they wonít be at risk is to ask their independent contractors to incorporate. One tactic they can use when making the switch to ensure that they donít rock the boat of their staff, is they can implement these changes along with a scheduled pay increase. Employees are less likely to be concerned about paying increased source deductions if there also getting a raise. And independent contractors are less likely to be upset about incurring the cost of incorporation, when there also getting a pay raise.

Business owners are figuring out which of their contractors needs to incorporate first, they can always be very pragmatic in evaluating the risk to them. By assessing each contractor and figuring out who is getting paid the most, business owners can aim to ensure that the highest-paid contractors are the first to get the switch. And if at the end of the process they find there are some contractors that have only a few hundred dollars patent paid to them a year, itís less likely to draw the attention of CRA.

By being firm in the hiring practices of their businesses, entrepreneurs can ensure that they donít make these hiring mistakes in the first place, however if they have already made those errors, CFO services say that they can eliminate that risk in the business quickly easily and permanently. Any business owners who believe that because theyíve been doing it for such a long time, but CRA has never caught them on it yet, should know that the longer they keep up the practice, the steeper the penalties will be once CRA does find out.

Business owners often seek professional help once they have been crushed or are about to be crushed financially by retroactive payroll remittances that include penalties and interest charges because their contractors have been deemed employees by CRA says CFO service. There is not a lot that a business can do in order to minimize the risk once they have been audited by CRA, they should take action now before they have the issue in order to eliminate the risk in their business, and ensure they donít make the same mistakes moving forward.

When entrepreneurs are hiring for their business, they should be aware of but CRA considers to be an employee and what CRA considers to be contractor in order to avoid making these payroll errors from the beginning. CFO services say the single most important factor when CRAís considering someone a contractor, is if there is risk of profit and loss that contractor. If this person is a legitimate business person, they will have risks associated with doing their business. Some things to take into consideration is does this person have to buy their own equipment, pay their own bills, take care of their own insurance. If the answer is yes to those questions business owner rest assured that CRA is most likely going to say that they are contractors.

The second most important factor when hiring contractors in the business says CFO services is is that contractor controlled by the business owner. Some factors to consider is can that person hire the own replacement, or does the business owner require that person to do that job. Does the business owner require them to attend staff meetings and company trainings? Is that person free to have other clients? The more control a business owner has over the contractor, the less likely CRA is going to agree that they are contractors.

There actually over 50 questions that CRA will use to determine if those contractors are actual contractors or employees, and the likelihood that business owners will be able to change the auditorís opinion if they get audited very low says CFO services. Some of those questions include who is sitting the schedules, how did they bid on the job, to set the price, does the business owner tell them the price, or does the contractor tell business owner what the right to charge them? In addition to the initial questions of what is their risk for profit and loss and whatís the business ownerís control over them, CRA will ask each of the contractors and employees of the business to determine who is at employee and he was a contractor.

Once business owners are very clear on who can be considered employee who can be considered a contractor, they can avoid making this error. By not making this mistake in the business in the first place, they will never be at risk for CRA auditing their business and finding them fault.