6 worked Contractor Payment Setup case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to contractor payment setup work, not a specific client's file.
Case Study 1 · Backlog brought current
$115,000 Of Arbitrary Assessments Vacated After 4 Years — Security Services Contractor, Vancouver
Client: A security services contractor · Where: Vancouver, British Columbia · Engagement: 9 weeks, fixed fee
Arbitrary tax vacated$115,000
Years brought current4
Account statusCurrent
The situation — A security services contractor, Vancouver, British Columbia
4 years of unfiled returns had turned into notional assessments at a security services contractor in Vancouver, British Columbia, with remittances still going out monthly after the business had moved to the accelerated threshold underneath. Collections had already started.
What we did for A security services contractor, Vancouver, British Columbia
We moved the account to the correct remitter frequency, caught up the arrears, and filed a taxpayer relief request that cancelled the bulk of the penalty, then filed every outstanding year in chronological order so the CRA could vacate the notional assessments cleanly.
The result — A security services contractor, Vancouver, British Columbia
All 4 years were accepted as filed. $115,000 of arbitrarily assessed tax was vacated, collections action stopped, and the account is current for the first time in 4 years.
Case Study 2 · CRA review defended
$17,000 Proposed Adjustment Withdrawn In Full — Mixed-Crew Construction Firm, Moncton
Client: A construction firm with union and non-union crews · Where: Moncton, New Brunswick · Engagement: 8 weeks, fixed fee
Adjustment withdrawn$17,000
File closed in8 weeks
Penalties assessedNone
The situation — A construction firm with union and non-union crews, Moncton, New Brunswick
A construction firm with union and non-union crews in Moncton, New Brunswick received a proposal letter opening a review of contractor payment setup. The CRA had identified a bonus accrued to bring the year-end tax bill down and still unpaid more than a year later and proposed an adjustment of $17,000, with 30 days to respond.
What we did for A construction firm with union and non-union crews, Moncton, New Brunswick
We treated the response as an evidence exercise rather than an argument. We wrote each pay code against its income tax, CPP and EI treatment, so a new benefit could not reach the payroll without a decision on how it was withheld, then indexed every supporting document against the specific line the auditor had questioned.
The result — A construction firm with union and non-union crews, Moncton, New Brunswick
The proposed adjustment was withdrawn in full — all $17,000 of it. The file closed in 8 weeks with no change to the assessed amounts and no penalty.
Case Study 3 · Cash and remittance control
$15,000 Of Working Capital Freed From The Tax Cycle — Manufacturing Employer, Burnaby
Client: A 30-employee manufacturer · Where: Burnaby, British Columbia · Engagement: 10 weeks, fixed fee
Working capital freed$15,000
On-time remittancesEvery period since
Forecast horizon13 weeks
The situation — A 30-employee manufacturer, Burnaby, British Columbia
A 30-employee manufacturer in Burnaby, British Columbia was profitable on paper and short of cash every month. Company vehicles used personally with no logbook and no taxable benefit reported explained most of the gap.
What we did for A 30-employee manufacturer, Burnaby, British Columbia
We filed the outstanding slips and summary and requested relief on the per-slip penalty with the reasons documented in writing and built a thirteen-week cash view so tax payments stopped competing with payroll for the same dollars.
The result — A 30-employee manufacturer, Burnaby, British Columbia
$15,000 was released back into working capital. Remittances have been on time every period since, and the forecast shows the tax outflow before it lands.
Case Study 4 · Objection and relief
$46,000 Of Penalties And Interest Cancelled On Relief — Higher-Frequency Remitter, Ottawa
Client: An employer whose remittance frequency moved up a threshold · Where: Ottawa, Ontario · Engagement: 11 weeks, fixed fee
Penalties and interest cancelled$46,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — An employer whose remittance frequency moved up a threshold, Ottawa, Ontario
An assessment of $46,000 landed at an employer whose remittance frequency moved up a threshold in Ottawa, Ontario following a desk review. The auditor had not seen the records behind T4 slips filed weeks after the deadline with no relief request made on the per-slip penalty.
What we did for An employer whose remittance frequency moved up a threshold, Ottawa, Ontario
We corrected the CPP and EI withholding for the balance of the year and set the employee up to recover the over-deduction on the personal return, then set out the legislative basis for the position alongside the documents supporting it.
The result — An employer whose remittance frequency moved up a threshold, Ottawa, Ontario
$46,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Case Study 5 · Sale and succession
$235,000 Sheltered By The Lifetime Capital Gains Exemption — Dental Practice, Guelph
Client: A dental practice · Where: Guelph, Ontario · Engagement: 4 weeks, fixed fee
Gain sheltered$235,000
ClosingOn schedule
Share qualificationMet
The situation — A dental practice, Guelph, Ontario
A dental practice in Guelph, Ontario had an offer on the table and 24 months to close. The shares did not qualify for the capital gains exemption, and passive assets sitting inside the operating company, disqualifying the shares was part of the reason.
What we did for A dental practice, Guelph, Ontario
We purified the corporation so the shares met the qualifying tests, then paid the accrued bonus inside the 179-day window and kept the deduction in the year it was accrued well ahead of the closing date.
The result — A dental practice, Guelph, Ontario
The sale closed on schedule with $235,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 6 · Scaling without breaking
Growth Handled Without A Missed Filing, $142,000 Freed — Stock-Option Tech Team, Kitchener
Client: A growing tech team with stock options · Where: Kitchener, Ontario · Engagement: 3 weeks, fixed fee
Cash freed$142,000
Compliance failuresNone
ReportingMonthly
The situation — A growing tech team with stock options, Kitchener, Ontario
A growing tech team with stock options in Kitchener, Ontario was opening in a second province — different filing obligations, a different payroll regime, and long-term contractors who met every test for employment already in the file.
What we did for A growing tech team with stock options, Kitchener, Ontario
We reconciled the payroll register, general ledger and T4 summary to the cent, then filed the amended slips and put monthly reporting in place so the owner could see the cash effect of growth while there was still time to act on it.
The result — A growing tech team with stock options, Kitchener, Ontario
Growth was absorbed without a compliance failure. $142,000 of cash was released, and the monthly reporting now flags a problem while it is still small.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
