CRA Worker Classification Audit — Montreal CPA Firm Near You: Employee vs Contractor

A CRA Worker Classification Audit determines whether individuals performing services for your business are employees or independent contractors. This classification directly affects payroll source deductions, CPP/EI eligibility, GST/QST registration, and employer liabilities. Mackisen CPA Montreal represents businesses in defending worker classification and ensuring compliance with both CRA and Revenue Québec standards while minimizing exposure to penalties and back assessments.

Legal Foundation

Law: Income Tax Act s.5 and s.9; Tax Administration Act (Québec) ss.40–44; Canada Pension Plan s.21; Employment Insurance Act s.82.
Jurisprudence: Wiebe Door Services Ltd. v. Canada (1986 FCA) — established the fourfold test: control, ownership of tools, chance of profit, and risk of loss.

Why You Need a CPA for a Worker Classification Audit

CRA and ARQ both treat worker status as a matter of substance, not form. Even if a contract labels a worker as a “contractor,” the authorities may reclassify them as an employee based on the relationship’s reality. This reclassification can lead to significant payroll reassessments, penalties, and director liability.

Mackisen CPA Montreal provides a comprehensive worker-status review to protect your company by proving independence or, where applicable, correcting misclassifications proactively.

Learning insight: Titles don’t define relationships—facts do. CRA judges behavior, not wording.

What Mackisen CPA’s Worker Classification Defense Includes

• Detailed analysis of contracts and working conditions.

• Documentation of control, risk, and ownership of tools for each worker.

• CPP/EI and QPP/QPIP status determination using CRA and ARQ tests.

• Filing of voluntary corrections or clearance requests to mitigate penalties.

• Representation during CRA and Revenue Québec interviews or reassessments.

Learning insight: CRA sees employment through the lens of dependency. A CPA shows the independence that proves true contracting.

Common Triggers for Worker Classification Audits

• Large number of T4A slips issued instead of T4s.

• Inconsistent remittance patterns for CPP/EI or QPP/QPIP.

• Anonymous tips or disgruntled former contractors reporting to CRA.

• High proportion of subcontractors in industries like construction, IT, and transport.

• Payroll audits that reveal missing withholdings or unclear payment structures.

Mackisen CPA Montreal identifies these triggers early and prepares classification analyses aligned with both federal and provincial standards.

How Mackisen CPA Manages Worker Status Audits

1. Reviews contracts, invoices, and time sheets for consistency with CRA’s common-law tests.

2. Prepares CPA-certified worker-status assessments with legal references.

3. Organizes evidence proving business risk, autonomy, and independent remuneration.

4. Negotiates with CRA/ARQ auditors to reach fair and evidence-based conclusions.

5. Files corrections and remission requests under Taxpayer Relief provisions if necessary.

Learning insight: Classification errors are fixable—denial isn’t. A CPA protects your compliance and credibility.

Benefits of Professional Representation

• Prevents reassessments for payroll deductions and EI/CPP penalties.

• Protects directors from personal liability under ITA s.227.1.

• Avoids double taxation by ensuring correct GST/QST registration for contractors.

• Creates robust documentation for future CRA or ARQ inquiries.

• Enhances HR, legal, and tax consistency across your organization.

Learning insight: Worker status defines your risk footprint. CPA defense defines your protection.

SEO Optimization and Learning Value

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Learning insight: Worker classification is the cornerstone of payroll integrity. Mackisen CPA ensures every relationship stands on the right side of the law.

Real Client Success

• A Quebec construction firm avoided a $120,000 CPP/EI reassessment after Mackisen CPA proved subcontractors owned their tools and assumed business risk.

• A digital agency cleared a Revenue Québec audit when our CPA team demonstrated true independence and multiple clients per contractor.

• A logistics company secured Taxpayer Relief after Mackisen CPA corrected years of inconsistent worker classification without penalties.

Why Mackisen CPA Montreal

Mackisen CPA Montreal combines deep knowledge of tax law, payroll systems, and HR compliance. Our bilingual CPA professionals navigate both CRA and Revenue Québec audit protocols, defending your classification decisions with precision and evidence.

Learning insight: CRA asks who controls the work. Mackisen CPA proves who controls the business.

Learning conclusion: Worker classification defines your legal structure. Mackisen CPA Montreal ensures your relationships reflect business independence, not compliance risk.