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Ontario WSIB Question

 
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Old 04-23-2015, 12:13 PM   #1
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Ontario WSIB Question


I have been doing business exclusively for homeowners and have been carrying business liability insurance, but lately a number of GC's have been asking me to do work for them so I'm looking into registering with WSIB, but I'm finding their guidelines very confusing.

Specifically the differentiation between registering as an Independent Operator or a Sole Proprietor with employees. I don't currently have any employees, but from the way I'm interpreting the rules for WSIB, if I hire and employee and register as a sole proprietor, then I pay my premiums on my NET income (line 135 from T1) for the period plus employee wages (http://needwsibcoverage.ca/insurable...le-proprietors.

However, if I register as an Independent Operator, then premiums are paid based on my GROSS invoice minus "major materials". So basically you can't claim overhead or minor materials such as nails, tape, screws, glue...etc.

Am I interpreting this correctly? If so, it seems like it might be more beneficial to have an employee that I just use on a few jobs and register as a sole proprietor with workers.

I'm not looking to skirt the rules, or complain about the idiocracy of WSIB, just looking to make an informed business decision.
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Old 04-23-2015, 04:15 PM   #2
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Re: Ontario WSIB Question


Have you called them or just gone to the web site? Is the % you pay the same no matter how u register? BTW it's ok to complain about it, basically they're legal mob, take your money and if you ever do get hurt will go broke in court waiting for payment. Good luck.

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Old 04-23-2015, 04:30 PM   #3
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Re: Ontario WSIB Question


Just call them, that's what I did...went something like this:

Me: *described business*

WSIB: "This is how we will fvck you and you don't have a choice"

Me: Ok, I'll cut the cheque.
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Old 04-23-2015, 04:39 PM   #4
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Re: Ontario WSIB Question


I've called them a few times, every time it's a different story, that's why I'm asking on here.
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Old 04-23-2015, 06:03 PM   #5
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Re: Ontario WSIB Question


I'd register with employees, since you employ yourself. After all monies paid in and expenses paid out that's your paycheque as self employed and that's what WSIB is payable on.

Now be creative and register a management company, pay all management company for administration of construction company except your realistic wages. Construction company will pay 9.1% or something close to that, management company pays around 1% for paper cuts

Ask your accountant
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Old 04-23-2015, 06:39 PM   #6
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Re: Ontario WSIB Question


Chris how's the sun?
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Old 04-23-2015, 07:27 PM   #7
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Re: Ontario WSIB Question


I'm not a WSIB expert as Workers Comp is government-run in Ontario and not administered in the private insurance industry which is where I work. From my limited knowledge, however, I don't think there is any cost benefit in hiring an employee simply to try and save some WSIB premium because of the way you calculate premium based on "sole proprietorship with workers" vs. "independent operator".

I found this calculator where you can try out both scenarios to get quotes and compare.
WSIB Rate Calculator

I tried a few examples myself and either way I seem to get the same rate. So the only savings appears to be in whether the earnings to be used would be lower because your net income plus workers wages comes in lower than your gross labour costs when working on your own.

There are other costs to consider if you hire an employee. I believe you need to pay into OHIP, EI and CPP as an employer contributor once you have employees and payroll. I'm not sure what the exemption limits are so maybe having only one employee is low enough that you are exempt from paying into these other social programs.

As already mentioned by Chris Johnson, the best person to talk to would be your accountant.

PS - Another thought - if you have private disability/death insurance, then you should talk to your life insurance agent as my understanding is that you can get a premium reduction on your private insurance if they know that you also pay into WSIB for yourself as an independent operator.
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Old 04-23-2015, 07:50 PM   #8
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Re: Ontario WSIB Question


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Originally Posted by S.U.M View Post
Chris how's the sun?

Awesome!! Looking at land for $0.25 sq meter or about $0.02 a sq ft

Beer went up since last year $0.62 a can now
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Old 04-23-2015, 08:14 PM   #9
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Re: Ontario WSIB Question


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I'd register with employees, since you employ yourself. After all monies paid in and expenses paid out that's your paycheque as self employed and that's what WSIB is payable on.

Now be creative and register a management company, pay all management company for administration of construction company except your realistic wages. Construction company will pay 9.1% or something close to that, management company pays around 1% for paper cuts

Ask your accountant
Thanks for the response.
I did ask my accountant, but she didn't know a whole lot about the different scenarios for WSIB because she mainly deals with incorporated construction companies.
I posed a similar question to the WSIB representative for the scenario you've outlined above because I do a lot of design work as part of the jobs, which are included in the invoice. I was informed that if the whole invoice is just for design work, then I don't have to report it, but if it's part of getting the job, then I do have to report it, regardless of if I set up a management/design company because I am a sole proprietor and it's all insurable income...

Is your company(s) set up as described above? Did they give you a hard time about it?
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Old 04-23-2015, 08:39 PM   #10
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Re: Ontario WSIB Question


I'm corporate

My wife is excluded from WSIB executive, I am management not on site so I think I'm .19% or $8.00 a month, employees are all 9.1%
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Old 04-24-2015, 12:02 PM   #11
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Re: Ontario WSIB Question


I had the same deal for the past few years where I was exempt being management and not on site. 😗 Got audited last year and our buddies at wsib decided I should be paying full rate as my wife works in the office gets paid less so she should be exempt not me and handed me a bill for $10,000. I truly cannot express how much hate I have for WSIB.

SERENITY NOW.
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Old 04-24-2015, 02:15 PM   #12
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Re: Ontario WSIB Question


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Originally Posted by S.U.M View Post
I had the same deal for the past few years where I was exempt being management and not on site. 😗 Got audited last year and our buddies at wsib decided I should be paying full rate as my wife works in the office gets paid less so she should be exempt not me and handed me a bill for $10,000. I truly cannot express how much hate I have for WSIB.

SERENITY NOW.
There lies the problem. If you try to get around paying they may show up with a big sledge hammer and hand you a hefty bill. Have seen it basically put guys out of business who thought they were doing ok until it happens. Under the new rules, owners can't exempt themselves anymore, unless as stated, you never work on site except for occasional inspections. Pretty hard to do as a one man show. We tried years ago to set up two accounts as our framing rate is higher than equipment rate. They wouldn't allow us to do it. Just bend over and welcome to dealing with wsib.
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Old 04-24-2015, 03:06 PM   #13
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Re: Ontario WSIB Question


We applied for our 2 rates and my wife exempt. It was excepted and approved by WSIB.

And anyone that knows me will tell you I show up and look what's happening on site and that's it.
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Old 04-25-2015, 07:29 AM   #14
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Re: Ontario WSIB Question


There lies the problem. If you try to get around paying they may show up with a big sledge hammer and hand you a hefty bill. Have seen it basically put guys out of business who thought they were doing ok until it happens. Under the new rules, owners can't exempt themselves anymore, unless as stated, you never work on site except for occasional inspections. Pretty hard to do as a one man show. We tried years ago to set up two accounts as our framing rate is higher than equipment rate. They wouldn't allow us to do it. Just bend over and welcome to dealing with wsib.


I don't think they they have "new" rules, they just have whatever makes no sense is a rule, I was told by wsib 1 owner could be exempt, as I am business partners with my wife who handles all the office side of things. We paid wsib for her based on her income and I was the one who is exempt, I have private coverage.
Nope they didn't like that. She is now exempt and I pay based on my income, on a side note she got a pay rise this year and funny enough I my hours have been cut,
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Old 04-25-2015, 08:58 AM   #15
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Re: Ontario WSIB Question


They are definitely new rules. I hope they get all the wannabes to pay or get out because they certainly made all the legit business' pay more. It probably will cost us an additional 5000 in wsib this year due to the fact of not being able to exempt multiple owners.
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Old 04-25-2015, 09:09 AM   #16
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Re: Ontario WSIB Question


If your competing for the small jobs, forget it, still too many guys who skirt the rules. Anything under 50k I rarely bother with quoting for that reason alone.

And anything over 50k those guys can't do the project, puts you into the next category of contracting. For my area anyways

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