Employees Only

If you have been reading this blog for an extended period of time you have somewhat of a history behind the opportunity for Canadian operators. So lets get down to some of the details for those who have been patient enough to keep tabs on this sight.

There are three steps to qualifying for subsistence allowance. The first qualification is that only employees can collect. The second is that the employee must have an employer-employee agreement. Then finally the agreement must be followed. It sounds obvious and simple but the steps are somewhat confusing at times and can appear schizophrenic to the seasoned self-employed operator.

Let’s look at the first step. Employees only can collect. Simply put, self employed people can never have an agreement “with themselves” that transfers estimated expenses into non-taxable benefits. Therefore the only way to have an employer-employee agreement is by incorporating. Based on over 125 years of corporate precedent, separation can be achieved by incorporation. The shareholder appoints a director, the director hires a president the assets would be sold to the corporation and the president interviews a driver for the position. Our legal system recognizes each role as a separate position even though each role can be occupied by the same person. The average person thinks the system is schizophrenic (and they may be right) but this is how its been done for over a century.

The employer employee agreement, what I’ll write about next week, is wrestled through between the president and the driver. Incidentally, if you hold the position of: shareholder, director, officer (president) and driver… you can still only use one log book.