Which statement accurately describes independent contractors?

Which statement accurately describes independent contractors?

• A. They are typically covered by the Employment Standards Act
• B. They pay their own taxes
• C. Employers must pay into EI on their behalf
• D. They cannot sign contracts

Answer: (B)

Independent contractors are self‑employed workers who provide services to clients under a contract and control how the work is done. Because they’re not employees, taxes aren’t withheld by the client. They handle their own tax filings and payments directly, which is why the statement that they pay their own taxes is accurate. In Canada, this also means they typically pay both portions of CPP as a self-employed person, and GST/HST if registered. EI is not automatic for contractors and is not paid by the client on their behalf; they would have to opt into EI under a separate arrangement if available. The other statements mischaracterize independence: contractors aren’t covered by the Employment Standards Act like employees; employers don’t pay EI on their behalf; and independent contractors do sign contracts to formalize their engagement.

Independent contractors are self‑employed workers who provide services to clients under a contract and control how the work is done. Because they’re not employees, taxes aren’t withheld by the client. They handle their own tax filings and payments directly, which is why the statement that they pay their own taxes is accurate. In Canada, this also means they typically pay both portions of CPP as a self-employed person, and GST/HST if registered. EI is not automatic for contractors and is not paid by the client on their behalf; they would have to opt into EI under a separate arrangement if available. The other statements mischaracterize independence: contractors aren’t covered by the Employment Standards Act like employees; employers don’t pay EI on their behalf; and independent contractors do sign contracts to formalize their engagement.