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

A CRA Worker Classification Audit determines whether an individual providing services is an employee or an independent contractor. This audit impacts payroll deductions, CPP/EI obligations, and tax remittances. Misclassification can lead to significant penalties, backdated source deductions, and interest charges. Mackisen CPA Montreal specializes in defending and documenting contractor relationships in compliance with CRA and Revenue Québec standards.

Legal Foundation

Law: Income Tax Act s.153; Tax Administration Act (Québec) s.40–44; Employment Insurance Act s.5; Canada Pension Plan s.21.
Jurisprudence: Wiebe Door Services Ltd. v. MNR (1986 FCA) — established the key test of control, ownership of tools, chance of profit, and risk of loss to distinguish employee from contractor.

Why You Need a CPA for a Worker Classification Audit

CRA and Revenue Québec conduct worker classification audits when inconsistencies arise between payroll records, T4/T4A slips, and tax filings. A single misclassification can result in thousands in retroactive CPP/EI contributions, penalties up to 20%, and personal liability for directors. Mackisen CPA Montreal provides expert representation, ensuring every contract and payment structure supports your chosen worker model.

Learning insight: The CRA doesn’t penalize the business model—it penalizes the absence of evidence. A CPA’s documentation transforms risk into proof.

What Mackisen CPA’s Worker Classification Defense Includes

• Review of all service agreements, payment records, and contractor invoices.

• Application of the Wiebe Door control and integration test.

• Analysis of the business relationship: independence, risk, and ownership of tools.

• Preparation of evidence demonstrating contractual autonomy and lack of employer control.

• Liaison with CRA and ARQ auditors to resolve classification disputes and prevent reassessment.

Learning insight: Proper contracts protect more than tax—they protect reputation. Each clause must prove independence and shared risk.

Common Triggers for CRA Worker Classification Audits

• T4A income reclassified as employment income.

• Payroll deductions missing for full-time contractors.

• High dependency of a contractor on a single payer.

• Absence of written contracts defining roles and independence.

• EI/CPP benefits claimed by former contractors.

Mackisen CPA Montreal identifies potential risks and ensures contracts, agreements, and invoices meet the tax authorities’ independence criteria.

How Mackisen CPA Manages the Worker Classification Process

1. Conducts a full diagnostic using CRA and ARQ control, integration, and ownership tests.

2. Reviews each contractor’s role, payment frequency, and business number registration.

3. Aligns contracts with CRA’s self-employment guidelines.

4. Responds to CRA audit questionnaires with CPA-certified documentation.

5. Prepares appeals or voluntary corrections if reclassification has already occurred.

Learning insight: Worker classification is a legal story told through documents. A CPA ensures your contracts narrate independence clearly enough for auditors to agree.

Benefits of Professional Representation

• Prevents costly payroll reassessments for CPP/EI and QPP/QPIP.

• Protects director and corporate liability under ITA s.227.1.

• Maintains worker autonomy while ensuring compliance with tax law.

• Builds contracts that satisfy both CRA and Revenue Québec requirements.

• Reduces the risk of double taxation and backdated deductions.

Learning insight: Classification errors don’t just cost money—they alter how your business operates. CPA guidance ensures both compliance and flexibility.

SEO Optimization and Learning Value

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Learning insight: Each contract tells a story of control, risk, and independence. CRA listens carefully—Mackisen CPA ensures your narrative is compliant, credible, and complete.

Real Client Success

• A construction firm avoided $140,000 in reassessed payroll taxes after Mackisen CPA demonstrated true independence under the Wiebe Door test.

• A digital-marketing company preserved its contractor model when CRA accepted our control and ownership-of-tools analysis.

• A consultant reclassified correctly with our assistance, eliminating $20,000 in unnecessary CPP/EI contributions.

Why Mackisen CPA Montreal

Mackisen CPA’s bilingual payroll and tax specialists combine financial rigor with legal insight. We ensure your contracts, payroll, and filings accurately reflect the working relationships within your business—protecting you from audit exposure.

Learning insight: The CRA focuses on who controls the work. Mackisen CPA ensures the answer is always supported by contracts, proof, and purpose.

Learning conclusion: Classification is about facts and framing. Mackisen CPA Montreal builds both—ensuring your business model stands firm under CRA and ARQ scrutiny.