DMajor

Some legal/tax advice sought here.

A friend has accepted a job on a farm where in return for chores he would receive free accommodation and hydro/water plus 250 a month paid in cash.

He has another job where he pays tax.

Is there any tax due on his job on the farm, it's about 10 hours a week? So far there's been no pay slip for the work/cash payment.

Engineer_abroad

He will have to declare all his income each year on his tax return i.e. the income from both jobs. The accommodation inc. hydro/water is likely to be seen as a taxable benefit and so there may be tax to pay on its value.

Aviator

The employer by what you describe should be making payroll deductions and reporting to CRA. Board and lodging is a taxable benefit Employers' Guide – Taxable Benefits and Allowances

The cash is income. Your friend should perhaps make some allowance for taxes owed.

DMajor

Thank you for the responses, is the owner of the farm liable for tax too?

Aviator

If they have employees they need to register for a payroll account with CRA and make all the appropriate deductions from the employee. If the employee has a TD1 with another employer, they don't fill that in again, all income and benefits in kind will be taxed. Employers should also have Workers Compensation coverage for the employee (this is mandatory for employees and contractors who don't have their own). What determines employee status vs any other is the CRA determination, not what an employer decided to call it.

RC4110 - Employee or Self-employed?

No matter how payment is made, in kind or in cash, payslips have to be issued and employment legislation applies.

If an individual is self employed they pay their own tax, CPP and EI, they end up paying both employer and employee portions.

If he is unsure, he could talk to the provincial employment standards branch and CRA. They will give a definitive answer. He could also talk to an accountant to get help. Surprise tax bills in the new year are rarely a welcome sight if you don't expect it.

DMajor

Thank you, that's great information.

As far as I'm aware, there is no workers compensation cover either.

Some of the work is quite dangerous so I'll show him this thread and get him to have a word.

Aviator

My experience is in BC, no idea about Ontario. If he has concerns, or wants to be sure he should seek professional advice, not rely on an open forum.

DMajor

Well, he has sought professional advice and has moved out of his accommodation. The farm owner wasn't happy to provide proof of earnings or workers compensation cover.