At a glance
- Relationship
- Business-to-business, not employment
- Status test
- The CRA looks at control, tools, subcontracting, financial risk, investment and chance of profit or loss
- Payroll deductions
- None; the contractor handles their own taxes, CPP/QPP and GST/HST
- Misclassification
- If the real relationship is employment, the contract label won't protect you
- Ending the contract
- As set in the agreement, for example 30 days' notice
- Language
- In Quebec, standard-form contracts must be provided in French first
Template
Replace the highlighted text in brackets. Delete optional clauses you don't need.
1. Parties
This Independent Contractor Agreement is made on [date] between [Client legal name] (the "Client") and [Contractor legal or business name], [a sole proprietor / corporation] with its address at [address] (the "Contractor").
2. Services
The Contractor will provide the services and deliverables described in Schedule A (the "Services"). The Contractor decides how, when and where to perform the Services, subject to the agreed deadlines and quality standards.
3. Language of services
The Contractor will provide the Services, and any deliverables, in [French and English] as described in Schedule A.
4. Term
This Agreement starts on [start date] and continues until [end date / completion of the Services], unless ended earlier under this Agreement.
5. Fees and invoicing
The Client will pay the Contractor [$[amount] per hour / a fixed fee of $[amount] / per milestone as set out in Schedule A], plus applicable GST/HST [and QST]. The Contractor will invoice [monthly / on completion], and the Client will pay within [30] days of receiving a correct invoice.
6. Expenses
The Contractor is responsible for their own expenses unless the Client approves an expense in writing in advance.
7. Independent contractor status
The Contractor is an independent business and not an employee, partner or agent of the Client. The Contractor provides their own tools and equipment, may provide services to other clients, may hire helpers or subcontractors [with the Client's approval for confidential work], and is responsible for their own income tax, CPP/QPP contributions, GST/HST registration and remittances, and any required insurance or licences.
8. Intellectual property
When the Client pays for them, the deliverables and all intellectual property in them are assigned to the Client. The Contractor waives in favour of the Client any moral rights in the deliverables, to the extent permitted by law. The Contractor keeps ownership of their pre-existing tools and know-how and grants the Client a licence to use them as part of the deliverables.
9. Confidentiality
The Contractor will keep the Client's confidential information private and use it only to provide the Services, during and after this Agreement.
10. Insurance and liability
The Contractor will maintain [commercial general liability / professional liability] insurance of at least $[amount]. [Each party's total liability under this Agreement is limited to the fees paid in the [12] months before the claim, except for breach of confidentiality.]
11. Ending the agreement
Either party may end this Agreement by giving [30] days' written notice. Either party may end it immediately if the other materially breaches it and doesn't fix the breach within [10] days of written notice. The Client will pay for Services properly performed up to the end date.
12. Entire agreement and governing law
This Agreement, including Schedule A, is the entire agreement between the parties and is governed by the laws of [province].
13. Signatures
Client: [name, title] — Signature: __________ — Date: __________
Contractor: [name, title] — Signature: __________ — Date: __________
Adapting the template
Corporations vs. sole proprietors
Contracting with the contractor's corporation helps show a business relationship, but doesn't settle the question on its own.
Ongoing retainers
For a monthly retainer, describe the expected availability and services, and avoid treating the contractor like staff.
Quebec
In Quebec, the Civil Code's rules on contracts for services apply. Provide standard-form contracts in French first.
What employers miss
The label doesn't decide it
The CRA and provincial labour authorities look at the real working relationship: who controls the work, who provides the tools, whether the worker can subcontract, and who carries the financial risk and the chance of profit. If it looks like employment, you may owe CPP, EI, tax withholding, vacation pay and notice.
Don't treat contractors like employees
Setting their hours, giving them a company email and title, managing them like staff and paying them by the hour indefinitely all point toward employment.
GST/HST
Contractors who must register for GST/HST will add it to their invoices. Ask for their registration number.
Official sources
Check the employment standards for the province or territory where the employee works:
- Ontario — Your guide to the Employment Standards Act
- Quebec — Working conditions (CNESST)
- British Columbia — Employment standards
- Alberta — Employment standards
- Saskatchewan — Employment standards
- Manitoba — Employment standards
- Nova Scotia — Employment rights
- Federally regulated employers — Federal labour standards (Canada Labour Code)
- Canada Revenue Agency — Employee or self-employed? (RC4110)
Questions
How do I know if someone is a contractor or an employee?
Look at the whole relationship, using the factors in the CRA's guide RC4110 (Employee or Self-employed?). You can ask the CRA for a ruling if you're unsure.
Do contractors get vacation pay or notice?
Genuine independent contractors don't get employment standards entitlements, but some long-term, dependent contractors may be entitled to reasonable notice under common law.
Who owns work a contractor creates?
Without a written assignment, the contractor usually keeps copyright. That's why this template includes an IP assignment.
This template is general information based on Canadian employment law, last checked on October 5, 2026. Laws differ by province and change over time, and courts look closely at termination clauses. Have an employment lawyer review your contract before you use it.
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