Understanding Independent Contractor Status as a Nano-Business Owner

As a Professional House Cleaner in our network, you'll operate as an Independent Contractor (IC). An IC is not an employee of our company but a service provider who works under a contract specifying duties, pay, work type and other details.

ICs are not subject to certain labor laws such as minimum wage, overtime, vacation, notice and termination, to name a few.

We consider you a Nano-Business Owner, which refers to a very small-scale business with no employees. Your nano-business doesn't have a separate legal status and you are essentially one with your business.

From a legal and tax perspective, you'll be a Sole Proprietorship – an unincorporated Canadian business owned by an individual, i.e., you. This is the simplest business structure.

Business Income and Expenses

Your earnings for cleaning services are considered business income, not employment income. 

You can claim tax deductions for reasonable business expenses incurred to earn this income, such as cleaning equipment, cleaning products, phone bills, gas, and commercial general liability insurance.

  • Net Business Income = Cleaning Income - Business Expenses

As a nano-business owner, you only pay income tax on your net business income, not the gross amount, resulting in more money staying in your pocket compared to earning the same amount as an employee.

Income Taxes and Record Keeping

As a nano-business, you're responsible for remitting your own Income Taxes to the Canada Revenue Agency (CRA).

During tax season, you'll complete a T1 Personal Tax Return and a T2125 Form for listing business income and expenses. The net business income is added to any other employment income and the tax return is prepared as usual.

We recommend using an affordable bookkeeping app like QuickBooks Self Employed for record keeping. This app tracks your expenses, kilometers and receipts, ensuring you're organized and can claim all available tax deductions.

CPP Contributions and EI

You'll be required to contribute to the Canada Pension Plan (CPP) based on your net business income above $3500 each year. Remitting Income Tax and CPP funds to CRA is made easy through their website, third-party apps, or tax preparation providers.

You won't be required to remit Employment Insurance (EI) premiums on your Professional House Cleaning Income and you won't be eligible for EI unless you access EI Special Benefits by registering and paying into the program.

If you work elsewhere as a regular employee you may qualify for EI benefits through that job.

Workers Compensation and Support Team

You won't have Workers Compensation coverage unless you purchase it directly yourself.