Girlfriend that is self employed

[Utmosteffort]

Hi there, I posted few weeks ago about my french girlfriend on working holiday visa who was considering express PR.

And it turned out that the employer has listed her as self employed worker, and now she cannot apply for CEC anymore.

To make matters worse, the employer only paid her in cheques and not pay stubs. There was not a single tax or cpp deductions. She had seen an accountant today who says that she has to pay 5% monthly accruing fine for not reporting dec 2018( from which she started the job) income ($900). He also said she is going to get 30% of her total income docked because she is self employed (which is obviously not true because she works in the company as an order clerk and not at home)

I am really furious about what happened and I really need some good advice on this case. She was crying today on her birthday and wants to go back to france and it breaks my heart. What are the course of actions I should take ? Can she avoid getting 30% taxes on the money she has already made?


Edit: she also didnt get a contract when she started working

 

[scylla]

Hi there, I posted few weeks ago about my french girlfriend on working holiday visa who was considering express PR.

And it turned out that the employer has listed her as self employed worker, and now she cannot apply for CEC anymore.

To make matters worse, the employer only paid her in cheques and not pay stubs. There was not a single tax or cpp deductions. She had seen an accountant today who says that she has to pay 5% monthly accruing fine for not reporting dec 2018( from which she started the job) income ($900). He also said she is going to get 30% of her total income docked because she is self employed (which is obviously not true because she works in the company as an order clerk and not at home)

I am really furious about what happened and I really need some good advice on this case. She was crying today on her birthday and wants to go back to france and it breaks my heart. What are the course of actions I should take ? Can she avoid getting 30% taxes on the money she has already made?


Edit: she also didnt get a contract when she started working

You can still be self employed and work for an employer. Plenty of people do this. Did she get nothing when she was hired? Not even an employment letter?

I think you may be misunderstanding how taxes work. Either way, she would owe the 30% to the government. As a company employee, these deductions would have been made off her pay-cheque - meaning her pay-cheque would have been 30% less. As a self-employed person, she is responsible for deducting this money herself and submitting it to the government. Since the 30% wasn't taken off her pay-cheque (i.e. she received the entire amount of her pay), she has to pay the 30% later.

Just to add - she can still apply through Express Entry as a self-employed individual - she just can't apply through Canadian Experience Class. Both work pretty much the same. She would need to have around 460 points to be selected. How many points does she have - anywhere near 460?

 

[Copingwithlife]

As Scylla explained she never paid any taxes on the money earned, and as I mentioned in another thread, the money earned is not tax free, she never paid any taxes at source, so when she files her T1, she would put the funds on line 104, and be taxed at the personal income tax rate, as EVERYBODY else has too earning money.
Now if she wants a ruling done by the CRA whether or not she was classified as an employee or not(for the experience), she would need to file a form called the CPT1 with the CRA. They would then determine whether or not the work she has done falls under being an employee, versus being on contract. and just a wild guess here, sounds like it would.
That would kill two birds with one stone. She would know definitively whether she was an employee or not, and the CRA would then contact the employer for the outstanding monies owed, plus of course penalties and interest, and a trust review of their payroll accounts.



https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/cpt1.html

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4110/employee-self-employed.html

 

[canuck78]

You can still be self employed and work for an employer. Plenty of people do this. Did she get nothing when she was hired? Not even an employment letter?

I think you may be misunderstanding how taxes work. Either way, she would owe the 30% to the government. As a company employee, these deductions would have been made off her pay-cheque - meaning her pay-cheque would have been 30% less. As a self-employed person, she is responsible for deducting this money herself and submitting it to the government. Since the 30% wasn't taken off her pay-cheque (i.e. she received the entire amount of her pay), she has to pay the 30% later.

Just to add - she can still apply through Express Entry as a self-employed individual - she just can't apply through Canadian Experience Class. Both work pretty much the same. She would need to have around 460 points to be selected. How many points does she have - anywhere near 460?

If I remember she was an order clerk at a wallpaper store. The company was just looking to pay someone cash. This wasn’t a situation where she should have been self-employed.