When you hear the phrase “I’m self-employed”, what springs to mind?
Your local lawn-care company owner?
Your chiropractor who works out of their home office?
Your childcare provider?
Any or all of these people could be considered self-employed and in today’s on-demand economy, there are many new versions of being your own boss which might not come right to your mind.
Here are 5 surprising ways to be self-employed.
1. Driving for Dollars
Ride-sharing has become a popular travel option. Did you know that your UBER driver is self-employed? UBER’s driver partners use their own vehicles, choose how often they are available to work, and are small business owners.
2. From Candles to Condos.
Direct sales are growing in popularity. Whether it’s buying scented candles from your neighbour or makeup from your daughter’s friend, many direct sellers are independent dealers. Real estate agents are often self-employed rather than commission employees. This means that they don’t receive a T4 or have deductions withheld by the parent company. They track their own expenses and income.
3. The Write Stuff
Contract writing is also a great example of being self-employed. And the field has been growing in the past few years. Not only can you now be paid “by-the-piece” for writing, new opportunities for editing, optimizing, and reviewing have sprung up as well.
4. One Person’s Trash
Reselling items online has turned into big business. If you’re thinking of starting a side gig selling items on sites like eBay, you could be considered self-employed. The profit you make from selling items is considered to be taxable in most situations. The good news is that if you’re self-employed, expenses related to your business are tax-deductible. For example, if you’re an online seller, the shipping fees you pay would be recorded on your tax return to help offset your income.
5. Caring for kids, pets, and other loved ones.
Do you make extra cash pet-sitting or walking dogs? Do you operate an in-home daycare? If you answered yes to either of these questions, there’s a good chance you’re self-employed.
T4 or T4A?
If you receive a T4 for your work, you’re an employee. You’ve had deductions for CPP, income tax, etc. remitted by the employer on your behalf. But, if you’ve received a T4A (with amounts in box 20 or 48), you are indeed self-employed. You could receive a T4A for a number of different ventures including direct selling, earning income from web pages, or even a one-day gig delivering phone books. It’s important to remember that if you have received a T4A (with box 20 or 48 amounts), no deductions have been sent to CRA yet on this income. This means that any tax or CPP due will be calculated as part of your tax return. In some situations, it can be hard to tell if you’re self-employed or an employee. The Canada Revenue Agency has specific rules to determine if you’re employed or self-employed which can be found here.