Joining family startup in Canada, will experience count for CEC and will becoming EI exempt be an issue?

[JohnWick07]

Hi All

I recently graduated and have a PGWP. I have been offered a job in a tech startup co-founded by a family member. It is a registered incorporation. They will be putting me on the company payroll and as per guidelines at the link below, they won't be deducting the EI from my payroll.

My question is will this have an impact on my CEC profile? Will this experience count as a Canadian experience even though the company belongs to a family member? Shall they deduct the EI?

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/hiring-a-family-member-a-related-person.html

 

[canuck78]

Hi All

I recently graduated and have a PGWP. I have been offered a job in a tech startup co-founded by a family member. It is a registered incorporation. They will be putting me on the company payroll and as per guidelines at the link below, they won't be deducting the EI from my payroll.

My question is will this have an impact on my CEC profile? Will this experience count as a Canadian experience even though the company belongs to a family member? Shall they deduct the EI?

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/hiring-a-family-member-a-related-person.html

how many employees are at the company. They have to pay the various deductions as an employee.

 

[JohnWick07]

how many employees are at the company. They have to pay the various deductions as an employee.

2 Canadian citizens currently. I will be the first hire. So total 3.

 

[thevisawhisperer]

Why wouldn't they be deducting EI and CPP, etc.?

 

[JohnWick07]

Why wouldn't they be deducting EI and CPP, etc.?

Per the link everything will be deducted except EI. That said, I think it is okay to be employed by a family startup?

 

[thevisawhisperer]

It doesn't matter who employs you (with few exceptions) but if you're a self employed contractor under the terms of employment the experience can't be counted toward CEC.
But what does this mean? What link?
"Per the link everything will be deducted except EI."

 

[JohnWick07]

It doesn't matter who employs you (with few exceptions) but if you're a self employed contractor under the terms of employment the experience can't be counted toward CEC.
But what does this mean? What link?
"Per the link everything will be deducted except EI."

Yes, the offer letter says its a full-time job with salary n job responsibility.

Here is the link from CRA. It recommends not deducting EI if employed by a family member related company.

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/hiring-a-family-member-a-related-person.html

 

[thevisawhisperer]

Sorry about the self employed contractor comment - that came from a different thread.

The CRA link you sent is not a blanket statement that family members don't need to have EI deducted. It says that some family employment is not eligible for EI and if that is the case EI needn't be deducted.
Under the Employment Insurance Act, employees who are related to their employer (individual or corporation) might not be in an insurable employment.

You should seek a determination about whether your employment is insurable or not.

 

[JohnWick07]

Sorry about the self employed contractor comment - that came from a different thread.

The CRA link you sent is not a blanket statement that family members don't need to have EI deducted. It says that some family employment is not eligible for EI and if that is the case EI needn't be deducted.
Under the Employment Insurance Act, employees who are related to their employer (individual or corporation) might not be in an insurable employment.

You should seek a determination about whether your employment is insurable or not.

Thanks. And dumb question; how can I determine if its insurable or not? or is it just safe to have the EI deduction even if it might not be an insurable employment?

 

[thevisawhisperer]

I am not/not a tax expert, but the page that I quoted from says that you can ask CRA for an opinion.

 

[JohnWick07]

I am not/not a tax expert, but the page that I quoted from says that you can ask CRA for an opinion.

Thanks, will call my accountant. But thanks for confirming that my employment with their company/startup will count towards the CEC. That was also something I wanted to confirm. Cheers!

 

[canuck78]

My opinion that is iw safer to work for a well stablished business with more than 10+ people. Will you be paid at least the median salaries? Start-ups tend to involve liltte pay for a stake in the company.

 

[Copingwithlife]

Thanks. And dumb question; how can I determine if its insurable or not? or is it just safe to have the EI deduction even if it might not be an insurable employment?

It’s called googling

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/cpt1.html

 

[JohnWick07]

My opinion that is iw safer to work for a well stablished business with more than 10+ people. Will you be paid at least the median salaries? Start-ups tend to involve liltte pay for a stake in the company.

Yeah, but since I will only get 1yr PGWP, and with COVID, hard to find a job, so this seemed like a logical step. Yes, they are paying me $18/hr.

 

[scylla]

Thanks, will call my accountant. But thanks for confirming that my employment with their company/startup will count towards the CEC. That was also something I wanted to confirm. Cheers!

As long as you are not classified as self-employed, it will count towards CEC.