Payments to caregivers, babysitters and domestic workers

You may be looking for:

• Daycare in your home

You may hire a worker to act as a caregiver, a babysitter, or a domestic worker. Depending on the situation, you may be considered to be the employer of the worker.

On this page

• Steps
• References

Steps

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

   If you pay the worker for services as a caregiver, babysitter or domestic worker, the worker can either 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 for CPP/EI purposes

     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).

     You need to consider multiple factors to determine if the worker is an employee or is self-employed.

     Learn more about the factors to consider when determining a worker’s employment status: Employment status: Employee or self-employed

     If you or a person working for you is not sure of the worker's employment status, either one of you can request a CPP/EI ruling to determine the status and whether the employment is pensionable, insurable, or both.

   • If the worker is an employee, continue to: Step 2 – Determine which deductions you need to withhold.

2. Determine which deductions you need to withhold

   You must withhold the following deductions on amounts paid to your employee acting as a caregiver, babysitter, or domestic worker:

   • Income tax
   • CPP contributions
   • EI premiums

    Learn more: How to calculate

3. Report the payment on a T4 slip

   You must report the amounts paid to your employee acting as a caregiver, babysitter or domestic worker on a T4 slip:

   • Box 14 – Employment income
   • Box 24 – EI insurable earnings
   • Box 26 – CPP/QPP pensionable earnings
   • Codes for taxable benefits (for example, code 40)

    Learn how to report on a slip: Fill out the slips and summaries – File information returns (slips and summaries)

References

Legislation