Payments to agriculture or horticulture workers

You may hire a worker in agriculture or horticulture, including under the Seasonal Agricultural Workers Program (SAWP).

Your Canada Pension Plan (CPP) and employment insurance (EI) withholding obligations will depend on the amount paid to the worker and how long they work for you during the year.

 If you employ non-resident workers under the SAWP, do not continue on this page. For more information about your withholding and reporting requirements, go to Seasonal agricultural workers program.

On this page

• Steps
• References

Steps

1. Determine if the worker is an employee or is self-employed

   If you hire a worker in agriculture or horticulture, the worker can be an employee or a self-employed worker.

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   •  If the worker is a self-employed worker, do not continue to the next step.

     You do not withhold CPP, EI, or income tax deductions.

     Generally, if you provide payments to a self-employed worker for their services, you need to report the amounts on a T4A slip.

     Learn more: Payments of fees for services

     What if you are not sure if the worker is an employee or is self-employed

     It is important to determine if a worker is an employee or a self-employed. Employment status has direct impacts on your reporting and withholding requirements for the worker under the Canada Pension Plan (CPP), Employment Insurance Act (EIA) and the Income Tax Act (ITA).

     Learn more about the factors to consider when determining if a worker is an employee or a self-employed worker: Employment status: Employee or Self-employed

   • If the worker is an employee, continue to: Step 2 – Determine if the employment is pensionable.

2. Determine if your employee's employment is pensionable

   The employment of your employee in agriculture or horticulture is not pensionable if one or both of the following conditions apply:

   • Your employee works for you for less than 25 working days (does not have to be consecutive) during the same calendar year on terms providing for cash remuneration
   • You pay your employee less than $250 in cash remuneration during the same calendar year

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   •  If your employee’s employment meets one or both of the conditions above, the employment is not pensionable.

     Where the employment is not pensionable, your employee can elect to pay CPP contributions on these earnings by filing Form CPT20, Election to Pay Canada Pension Plan Contributions with their personal income tax return.

   • If your employee’s employment does not meet the conditions above, the employment is pensionable from the first day of work.

3. Determine if your employee's employment is insurable

   The employment of your employee in agriculture or horticulture is not insurable if one or both of the following conditions apply:

   • Your employee receives no cash remuneration
   • Your employee works for you for less than seven days (does not have to be consecutive) during the calendar year

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   •  If your employee’s employment meets one or both of the conditions above, the employment is not insurable.

   • If your employee’s employment does not meet the conditions above, the employment is insurable from the first day of work.

4. Determine which deductions you need to withhold

   Depending on the particular circumstances, the following deductions must be withheld:

   • Income tax
   • CPP contributions (if employment is pensionable)
   • EI premiums (if employment is insurable)

    Learn more: How to calculate

5. Report the payment on a T4 slip

   You must report the following amounts on a T4 slip:

   • Box 14 – Employment income
   • Box 24 – EI insurable earnings (if employment is insurable (step 3))
   • Box 26 – CPP/QPP pensionable earnings (if employment is pensionable (step 2))
   • Any applicable codes for taxable benefits

    Learn more: T4 slip – Information for employers

References

Legislation