6 Employee Versus Independent Contractor Review tax and accounting engagements in full — what the client came to us with, what we did, and what it was worth. Each one is specific to employee versus independent contractor review work, not a general example.
Case Study 1 · Objection and relief
Desk-Review Assessment Of $15,000 Vacated — Restaurant with Heavy Seasonal, Kelowna
Client: A restaurant with heavy seasonal turnover · Where: Kelowna, British Columbia · Engagement: 4 weeks, fixed fee
Assessment vacated$15,000
Supporting recordsNow on file
AccountCleared
The situation
A restaurant with heavy seasonal turnover in Kelowna, British Columbia was carrying $15,000 of penalties and interest arising from company vehicles used personally with no logbook and no taxable benefit reported, much of it accumulated during a period the CRA itself had delayed.
What we did
We reconciled the payroll register, general ledger and T4 summary to the cent, then filed the amended slips and framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result
The assessment was vacated. $15,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 2 · Records and systems rebuilt
Month-End Close Cut From 7 Weeks To 9 Days — Dental Practice, Brampton
Client: A dental practice · Where: Brampton, Ontario · Engagement: 11 weeks, fixed fee
Close time before7 weeks
Close time after9 days
Year-endReview, not rebuild
The situation
The accounting file at a dental practice in Brampton, Ontario was built on long-term contractors who met every test for employment. The year-end had taken 7 weeks each of the last three years.
What we did
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 and moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result
The file reconciles. Month-end closes in 9 days instead of 7 weeks, and the year-end is a review rather than a reconstruction.
Case Study 3 · Deadline rescue
Filed On Time From A Standing Start, $118,000 Penalty Avoided — Growing Tech Team, Ottawa
Client: A growing tech team with stock options · Where: Ottawa, Ontario · Engagement: 10 weeks, fixed fee
Penalty avoided$118,000
Turnaround10 weeks
FiledOn time
The situation
A growing tech team with stock options in Ottawa, Ontario came to us 10 weeks before its filing deadline with remittances still going out monthly after the business had moved to the accelerated threshold. A late filing would have triggered a penalty of roughly $118,000 before interest.
What we did
We worked backwards from the deadline. We reviewed each contractor against the CRA’s control and integration tests, converted those who met the employment tests, and priced the transition before it was forced by a ruling, prioritising the items that actually gated the filing and deferring everything that did not.
The result
The return was filed on time and complete. The $118,000 penalty never arose, and the compliance calendar we set means the next deadline is scheduled rather than discovered.
Case Study 4 · Cash and remittance control
Instalments Rebased, $104,000 Of Cash Returned To The Business — Home-Care Agency, Guelph
A home-care agency in Guelph, Ontario was paying instalments calculated on a prior year that no longer reflected the business. A director facing a personal assessment for unremitted source deductions was tying up $104,000 of cash.
What we did
We rebased the instalments on the current-year estimate rather than the prior-year default, and reconstructed vehicle logbooks, calculated the standby charge and operating benefit properly, and amended the affected T4s.
The result
$104,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
Case Study 5 · Scaling without breaking
Scaled To 23 Staff With $107,000 Of Working Capital Freed — Logistics Operator with Drivers, Regina
Client: A logistics operator with drivers in three provinces · Where: Regina, Saskatchewan · Engagement: 11 weeks, fixed fee
Headcount reached23
Working capital freed$107,000
Missed deadlinesZero
The situation
A logistics operator with drivers in three provinces in Regina, Saskatchewan was growing fast — headcount to 23 in eighteen months — and the back office had not kept up. T4s that did not agree to the payroll register or the general ledger was the first thing to break.
What we did
We reconciled the payroll register, general ledger and T4 summary to the cent, then filed the amended slips, and built the compliance calendar for the size the business was becoming rather than the size it had been.
The result
The business reached 23 staff with no missed remittance and no late filing. $107,000 of working capital was freed in the process.
Case Study 6 · Planning that cut the bill
$10,500 Cut From The Annual Tax Bill — Security Services Contractor, Winnipeg
A security services contractor in Winnipeg, Manitoba was compliant but paying more than it needed to. The prior year had been filed correctly and still left company vehicles used personally with no logbook and no taxable benefit reported on the table.
What we did
We modelled the current position against the alternatives before changing anything, then 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.
The result
The change saved $10,500 in the first year and repeats annually. Nothing about the filings became more aggressive; the position is simply the one the rules already allowed.
Reviewed for the 2025 tax year by Udit Gupta, Certified Tax Accountant. Figures describe representative engagements of this type; outcomes depend on your own facts. Client names and identifying details are omitted for confidentiality.
