CRA Compliance
for Dental Temps
Most Canadian dental clinics pay temps as independent contractors. Most of those temps are employees in the eyes of the CRA. This guide explains how classification actually works, what reclassification costs a clinic, and how to get coverage without carrying the risk.
Why classification is the clinic's problem
When a temp invoices your clinic and you pay it, nothing feels wrong. The temp is happy, the chair was covered, and there is no paperwork beyond the e-transfer. The problem only appears later, because in a misclassification finding the CRA does not chase the temp. It assesses the employer.
If the CRA decides the temp was an employee, the clinic can be responsible for the CPP and EI that should have been remitted, including the employer's share, plus penalties and interest. Reviews are not limited to this year's shifts, so a clinic that has paid temps by invoice for years is carrying exposure for all of it. One reassessment can also invite a closer look at everything else in the practice's books.
The test the CRA actually uses
The CRA does not care what your agreement is called. It examines the real working relationship using a set of well-established factors. Here is how each one usually looks for a dental temp shift:
Control
Who decides when, where, and how the work gets done? When a clinic books a temp for Tuesday 8 to 4, assigns the operatory, and sets the patient schedule, the clinic is directing the work. That is the single strongest employment indicator, and it describes almost every temp shift.
Tools and equipment
Whose chair, instruments, and software does the work run on? A temp works in the clinic's operatory with the clinic's sterilization, supplies, and practice management system. Contractors typically bring their own means of production. Temps almost never do.
Ability to subcontract
Can the worker send someone else to do the job? A genuine contractor can delegate. A temp booked for a shift must show up personally; the clinic booked her, not her business. That points to employment.
Financial risk and chance of profit
Does the worker risk losing money or stand to profit from efficiency? A temp earns a fixed hourly rate with no expenses at stake and no way to profit beyond the hours worked. That is the economics of employment, not enterprise.
Run an honest temp shift through those four questions and it scores as employment on nearly every one. That is why "everyone pays temps as contractors" is not a defence. It just means a lot of clinics share the same exposure.
"But she invoices me and has an HST number"
Invoices, an HST number, or a business name do not make someone a contractor. Neither does the temp preferring it that way. Classification is not a choice either party gets to make; it is a conclusion the CRA draws from the facts of the relationship. A signed contractor agreement is the first thing clinics point to in a review, and it is routinely set aside when the day-to-day reality looks like employment.
The temp's preference also cuts both ways. A temp who later applies for EI, gets audited personally, or simply files taxes in a way that flags the relationship can trigger the review that lands on your clinic.
How to pay temps compliantly
There are two clean ways to do this, and one of them is a lot of work.
Run them through your own payroll
Fully compliant, and fully manual. Every temp becomes a hire: onboarding, TD1 forms, source deductions, remittances, a T4 at year end, and an ROE when the shift ends. For a professional you may use twice a year, that is a heavy administrative price for one covered chair.
Book through Fairly and use Fairly Payroll for Temps
Temps booked through Fairly can be paid through Fairly Payroll for Temps: CRA-compliant payroll with source deductions handled, so the classification question never reaches your books. The temp still sets their rate and keeps all of it. See how Fairly Payroll works →
Go deeper
The independent contractor myth
Why the most common arrangement in dental temping is also the riskiest, from the clinic's side.
The four-factor test, for temps
The same rules seen from the professional's perspective, and why employee pay protects temps too.
The hidden risks of manual payroll
Where do-it-yourself payroll goes wrong, even for clinics trying to do the right thing.
Frequently asked questions
Is a dental temp an employee or an independent contractor?
What happens if the CRA reclassifies my temp as an employee?
Does a signed contractor agreement protect my clinic?
Does this apply even to a single one-day shift?
How does Fairly handle this?
This guide is general information for Canadian dental clinics, not legal or tax advice. For decisions about your specific situation, talk to your accountant or a tax professional.
Cover your chairs without carrying the classification risk. Post a shift, pick your professional, and let the payroll happen properly.
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