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ADM3345 (1)
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Chapter 3

Taxation - Chapter 3.docx

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Department
Administration
Course
ADM3345
Professor
All Professors
Semester
Fall

Description
Chapter 3Employment IncomeContractorsIndependent contractors pay no employment income but must pay double the CPP amountEmployeeSelf Employedlook at the following factors1 Economic RealityEntrepreneur Test 2 IntegrationOrganization Test 3 Specific Result TestMajor Factors to Consider in Making Determinationi Controlbasically does the employer have control over youii Ownership of Equipmentdoes the employer provide the toolscover the costs to repairiii ability to hire assistantsis the individual personally required to perform the servicesiv resp for investmentmgmtdoes the individual have capital investedv financial riskopportunity for profitdo you assume risk of lossBonus Arrangementin order for the company to deduct the bonus at year end it must pay the employee within 180 days of year end Otherwise they will have to wait until the employee is actually paidBut if it is within 180 days it is taken off the books of the employees right then and the employee puts it in taxes when it is receivedFringe benefitspremiums paid by employerTaxable benefitbut benefits received by the employee are not taxedPrivate health care plansnot a taxable benefit to the employer and not taxed to the employeeEmployment IncomeAutomobilesEmployer OWNED AutomobileStandby chargeoperating cost benefitStandby Charge2 x cost of car x periods of availabilityCostactual cost of the vehicle including GSTHST and PSTPeriods of availability of days vehicle is available30ExampleCar costs 70000 includes GSTHST and PST employee has use of car 365 days Standby Charge002 x 70000 x 36530Standby Charge16800 Taxable BenefitEmployer LEASED Automobile Standby chargeoperating cost benefit
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