Canadian Contractor Compliance
The CRA uses a CRA Five-Factor Test to determine whether a worker is an employee or self-employed. Proofstack helps Canadian contractors build a verified independence profile aligned with CRA requirements.
The CRA Five-Factor Test
The Canada Revenue Agency (CRA) uses a five-factor test to determine whether a worker is an employee or self-employed. No single factor is decisive — CRA examines the overall relationship.
Control
Does the payer control how, when, where, and by whom the work is done? Less control indicates self-employment.
Tools and Equipment
Does the worker provide their own tools and equipment? Workers who supply their own tools are more likely self-employed.
Chance of Profit
Can the worker profit beyond a fixed salary through efficiency, volume, or business decisions? Profit opportunity indicates self-employment.
Risk of Loss
Does the worker bear financial risk — fixed costs, inventory, bad debts, warranty obligations? Financial risk indicates self-employment.
Integration
Is the worker integrated into the payer's business, or do they maintain a separate business identity? A separate identity indicates self-employment.
Independence Signals Tracked by Proofstack
Proofstack tracks the following independence signals aligned with CRA factors. Building a strong signal profile helps demonstrate your self-employed status.
W-8BEN for Cross-Border Compliance
W-8BEN — Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Required when a US employer pays a Canadian contractor.
If you are a Canadian contractor working with US-based clients, you will need to provide a W-8BEN to certify your foreign status. Proofstack guides you through the requirements and helps your US clients understand what documentation is needed instead of a W-9.
Classification Risk in Canada
CRA can reclassify workers and assess employer CPP contributions, EI premiums, and income tax withholdings retroactively. Penalties include interest on unpaid amounts.
Build your verified independence profile
Join Proofstack and start documenting your independent contractor status with CRA-aligned signals, verified engagements, and cross-border compliance tools.