Payments to fishers

For Employment Insurance (EI) purposes, you may be considered a designated employer if you provide payments to a self-employed fisher.

On this page

• Steps
• References

Steps

1. Determine if the worker is considered a self-employed fisher

   Under the EI (Fishing) Regulations, the worker is a fisher (self-employed fisher) if all of the following apply:

   • The fisher is self-employed.
   • The fisher participates in making a catch.
   • The fisher is not fishing for their own or another person's sport.
   • The self-employed fisher meets at least one of the following conditions:
     • Own or lease the boat used to make the catch.
     • Own or lease specialized fishing gear (not including hand tools or clothing) used to make the catch.
     • Hold a species licence, issued under the authority of Fisheries and Oceans Canada, necessary to make the catch.
     • Have a right of ownership to all or part of the proceeds from the sale of the catch and be responsible for all or part of the expenses incurred to make the catch. This means that the worker is required to pay a predetermined amount or percentage of the expenses incurred by the crew to make the catch, regardless of the value of the catch. Such expenses can include the cost of fuel used to make the catch.

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   • If the worker is not a self-employed fisher, do not continue to next step.

     You must deduct CPP, EI and income tax as you would for your other employees.

     Learn more: How to calculate

     If you are not sure if the worker is an employee or self-employed for CPP/EI purposes

     It is important to determine if a worker is an employee or a self-employed. Employment status has direct impacts on your reporting and withholding requirements for the worker under the Canada Pension Plan (CPP), Employment Insurance Act (EIA) and the Income Tax Act (ITA).

     You need to consider multiple factors to determine if the worker is an employee or is self-employed. You can use the CRA guidance to help you gather the facts based on your situation.

     Learn more about the factors the CRA considers when determining a worker’s employment status: Employee or Self-employed

   • If the worker is a self-employed fisher, continue to Step 2 – Determine if you are a designated employer.

2. Determine if you are a designated employer

   You are a designated employer if one of the following applies:

   • Buyer of a catch

     You are the designated employer of all the self-employed fishers who make the catch if you buy the catch and all of the following apply:

     • It is bought for resale and not for your own use as bait, feed, or food.
     • It is delivered in Canada to either you or your agent.

     If you do not operate under the conditions above, for example, if the delivery is made to an American buyer in the United States, you are not the designated employer.

   • Head fisher of a crew

     You are the designated employer if you are the head fisher of a crew and all of the following apply:

     • The buyer of the catch is not the designated employer
     • The gross returns from the sale of the catch are paid to you

     You are the designated employer of all other fishers who are members of the crew, but not yourself.

   • Agent

     You are the designated employer if you are an agent acting either for the buyer or for the crew and all of the following apply:

     • The buyer of the catch is not the designated employer
     • The catch is delivered by a member of the crew
     • The gross returns from the sale of the catch are paid to you

     If you are a member of the crew, you are the designated employer of all the other fishers who are members of the crew, but not yourself.

   • Common agent

     You are the designated employer if you are a common agent acting for both the buyer and the crew at the same time.

     • If you are a member of the crew, you are the designated employer of all the other fishers who are members of the crew, but not yourself.
     • If you are not a member of the crew, you are the designated employer of all the fishers who are members of the crew.

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   • If you are not a designated employer, do not continue to next step.

     You do not withhold CPP, EI or income tax deductions.

     Generally, if you provide payments to a self-employed fisher for their services and you are not considered a designated employer, you need to report the amounts on a T4A slip.

     Learn more: Payments of fees for services

   • If you are a designated employer, continue to Step 3 – Review your responsibilities as a designated employer.

3. Review your responsibilities as a designated employer

   If you are a designated employer of a self-employed fisher, including a self-employed First Nations fisher whose earnings is tax-exempt, you are responsible to:

   • Make appropriate deductions depending on the circumstances of the fisher (step 5)
   • Calculate the insurable earnings of the fisher (step 6)
   • Report the payment on a T4 slip (step 7)
   • Keep records (step 4)

4. Determine the records you must keep to support your calculation of the insurable earnings

   If you are a designated employer of a self-employed fisher, you have to keep your records to support the following:

   • The earnings of the fishers
   • The EI premiums you have to remit
   • The dates on which the EI premiums are payable

   You have to keep your books, records, accounts and documents for these fishers separate from those of other insured persons.

   Your records should include:

   • The name, address, and social insurance number of each crew member and the member's share of proceeds from the sale of a catch
   • The amount and date of each fisher's insurable earnings for the period
   • The amount and date the EI premiums are payable

   Do not send your records with your T4 information return, but keep them in case the CRA asks to see them.

   What are your responsibilities for keeping records

   Your records have to accurately reflect all transactions and contain supporting documents to prove your claims. You have to keep your records for 6 years from the end of the last tax year they relate to, unless you have permission from the CRA to destroy them earlier.

   Learn more: Where to keep your records, for how long and how to request the permission to destroy them early

   What happens if your records do not support the insurable earnings you reported

   If the CRA determines that your records do not support the insurable earnings you report, they may estimate the insurable earnings. Your premiums payable would be calculated at the prescribed rate of 5% of the estimate (as per 6(1)(b) of the Employment Insurance (Fishing) Regulations).

5. Determine which deductions you need to withhold

   Generally, if you pay amounts to a self-employed fisher from proceeds of a catch, you must withhold the following deductions:

   • Income tax

     • Form TD3F was filled out and you received it

       Withhold income tax at the rate of 20% after you received a filled out Form TD3F, Fisher's Election to Have Tax Deducted at Source from the self-employed fisher.

     • Form TD3F was not filled out

       Do not withhold income tax.

   • EI premiums

     Under special EI regulations, you must withhold EI premiums on behalf of the worker and remit the worker's share and your share of the EI premiums.

     If the fisher worked in the province of Quebec, you may also have to deduct Québec Parental Insurance Plan (QPIP) premiums.

     Learn more: Québec Parental Insurance Plan (QPIP) Premiums | Revenu Québec

   • CPP contributions

     Do not withhold CPP contributions.

     Self-employed fishers are responsible for remitting CPP contributions in the same way as other self-employed individuals.

   When are you considered to have paid your employees

   Depending on your situation as designated employer, the CRA considers that you have paid your employees on certain dates, which impacts when you are required to remit the premiums you deduct, as well as the employer portion.

   • Head fisher or the agent of a crew

     On the last day of the week in which you received the proceeds from the sale of the catch.

   • Buyer who settles accounts with a fisher at intervals of more than 7 days

     On the day the account is settled.

   • Common agent

     On the last day of the week in which the catch is delivered.

   What happens if the self-employed fisher also has an employer

   If the self-employed fisher leaves one employer during the year to work for you, or if the the self-employed fisher at the same time has another job with other employers, you have to deduct EI premiums without taking into account what the other employer paid. This is the case even if the self-employed fisher has contributed the maximum amount on their employment income.

6. How to calculate insurable earnings

   The insurable earnings of a fisher are the amounts paid or payable to the fisher from the sale of a catch. These earnings do not include amounts paid for a catch or part of a catch made by other persons who were not members of the crew.

   Your calculation of the insurable earnings of the worker depends on the situation of the self-employed fisher. To help explain the calculation of insurable earnings, the CRA has categorized the fishers as either type 1 or type 2 fishers.

   Complete the record of employment (ROE)

   Once you have calculated the insurable earnings of the fisher, you also have to report this amount, including the EI premiums you deducted on the ROE.

   You must provide the ROE to the fisher within:

   • 5 calendar days after the end of each fishing season
   • 5 days after the fisher asks for one

   Learn more: How to complete the record of employment (ROE) form.

   • Calculate insurable earnings for a type 1 fisher

     Calculate insurable earnings for a type 1 fisher if the fisher is a member of the crew who either:

     • Owns or leases the boat or specialized fishing gear used to make a catch.
     • Employs other persons under a contract of service to make a catch.

     Use the following to calculate the insurable earnings of a type 1 fisher:

     • Gross value of the catch (do not include the value of any part of a catch the crew did not make) to be included on the T4 slip using code 78
     • minus 25% (prescribed amount) of the gross value of the catch
     • minus Amounts paid or payable to other members of the crew according to the share arrangement
     • minus Total amount of wages paid to others employed, as employees, to make a catch
     • equals Insurable earnings of a type 1 fisher to be included on the T4 slip using code 79 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.

   • Calculate insurable earnings for a type 2 fisher, if type 1 does not apply

     Calculate insurable earnings for a type 2 fisher if type 1 fisher does not apply. This includes a single fisher who borrows a boat and specialized fishing gear and has no employees.

     You should ask for the details of ownership or leasing from the person who makes the delivery.

     Use the following to calculate the insurable earnings of a type 2 fisher:

     • Gross value of the catch (not including the value of any part of a catch the crew did not make) to be included on the T4 slip using code 78
     • multiply Share percentage of the catch payable to the fisher from the proceeds based on the sharing arrangement agreed to prior to embarking on the fishing trip
     • equals Insurable earnings of a type 2 fisher to be included on the T4 slip using code 80 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.
   Example 1 - Type 1 fishers

   The catch is fresh lobster, which was caught and delivered on June 13. The gross value of the catch is $1,200.

   Judith is the owner and sole fisher. Her sharing arrangement is 100%.

   • $1,200 is the gross value of the catch to be reported on Judith’s T4 slip using code 78
   • minus $300 is 25% (prescribed amount) X $1,200 (gross revenue of the catch)
   • equals $900 is the net partnership amount to be reported on Judith’s T4 slip using code 79 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.
   Example 2 - Type 1 fishers

   The catch is fresh mackerel, which was caught and delivered on June 13. The gross value of the catch is $1,000.

   The crew has the following sharing arrangement:

   • Judith is the owner of the boat - 65%
   • David is the owner of the gear - 35%

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   Judith (owner of the boat)

   • $1,000 is the gross value of the catch to be reported on Judith’s T4 slip using code 78
   • minus $250 is 25% (prescribed amount) X $1,000 (gross revenue of the catch)
   • equals $750 is the result
   • multiply 65% is the sharing arrangement for Judith
   • equals $487.50 is the net partnership amount to be reported on Judith’s T4 slip using code 79 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.

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   David (owner of the gear)

   • $1,000 is the gross value of the catch to be reported on David’s T4 slip using code 78
   • minus $250 is 25% (prescribed amount) X $1,000 (gross revenue of the catch)
   • equals $750 is the result
   • multiply 35% is the sharing arrangement for David
   • equals $262.50 is the net partnership amount to be reported on David’s T4 slip using code 79 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.
   Example 3 - Type 2 fishers

   The catch is fresh clams, which was caught and delivered on June 13. The gross value of the catch is $100.

   Judith is the sole fisher and she does not require a boat. Her sharing arrangement is 100%.

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   • equals $100 is the gross value of the catch to be reported on Judith’s T4 slip using code 78 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.
   Example 4 - Type 1 and type 2 fishers

   The catch is fresh herring, which was caught and delivered on June 13. The gross value of the catch is $1,000.

   The crew has the following sharing arrangement:

   • Judith is the owner - 60%
   • David is a shareperson - 20%
   • Steve is a shareperson - 20%

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   David (shareperson)

   • $1,000 is the gross value of the catch
   • multiply 20% is the sharing arrangement with David
   • equals $200 is the shareperson amount to be reported on David’s T4 slip using code 80 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.

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   Steve (shareperson)

   • $1,000 is the gross value of the catch
   • multiply 20% is the sharing arrangement with Steve
   • equals $200 is the shareperson amount to be reported on Steve’s T4 slip using code 80 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.

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   Judith (owner)

   • $1,000 is the gross value of the catch to be included on Judith’s T4 slip using code 78
   • minus $250 is 25% (prescribed amount) X $1,000 (gross revenue of the catch)
   • equals $750 is the result
   • minus $400 is the amounts paid or payable to David ($200) and Steve ($200) according to the share arrangement
   • equals $350 is the net partnership amount to be reported on Judith’s T4 slip using code 79 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.
   Example 5 - Type 1 and type 2 fishers

   The catch is fresh crab, which was caught and delivered on June 13. The gross value of the catch is $1,000.

   The crew has the following sharing arrangement:

   • Judith is the 60% co-owner of the partnership - 15% off the top for the boat share
   • David is the 40% co-owner of the partnership – 15% off the top for the boat share
   • From the remaining balance:
     • Judith is the 60% co-owner of the partnership – 45%
     • David is the 40% co-owner of the partnership - 25%
     • Steve is a shareperson - 15%
     • Tao is a shareperson - 15%

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   Steve (shareperson)

   • $1,000 is the gross value of the catch
   • minus $150 is 15% off the top for the owner’s boat share
   • equals $850 is the result
   • multiply 15% is the sharing arrangement with Steve
   • equals $127.50 is the shareperson amount to be reported on Steve’s T4 slip using code 80 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.

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   Tao (shareperson)

   • $1,000 is the gross value of the catch
   • minus $150 is 15% off the top for the owner’s boat share
   • equals $850 is the result
   • multiply 15% is the sharing arrangement with Tao
   • equals $127.50 is the shareperson amount to be reported on Tao’s T4 slip using code 80 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.

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   Judith (co-owner of the partnership)

   • $1,000 is the gross value of the catch to be reported on Judith’s T4 slip using code 78 (do not substract the 15% as boat share because this is income of the co-owners)
   • minus $250 is 25% (prescribed amount) X $1,000 (gross revenue of the catch)
   • equals $750 is the result
   • minus $255 is the amount paid or payable to Steve ($127.50) and Tao ($127.50) according to the share arrangement
   • equals $495 is the result
   • multiply 60% is Judith’s share of the partnership arrangement
   • equals $297 is the net partnership amount to be reported on Judith’s T4 slip using code 79 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.

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   David (co-owner of the partnership)

   • $1,000 is the gross value of the catch to be reported on David’s T4 slip using code 78 (do not substract the 15% as boat share because this is income of the co-owners)
   • minus $250 is 25% (prescribed amount) X $1,000 (gross revenue of the catch)
   • equals $750 is the result
   • minus $255 is the amount paid or payable to Steve ($127.50) and Tao ($127.50) according to the share arrangement
   • equals $495 is the result
   • multiply 40% is David’s share of the partnership arrangement
   • equals $198 is the net partnership amount to be reported on David’s T4 slip using code 79 and the insurable earnings using box 24 (and if the fisher worked in the province of Quebec, the PPIP insurable earnings using box 56). It is also the amount to be reported on the ROE.

   Learn more on how to calculate the EI premiums using the fisher’s insurable earnings: Calculate EI deductions

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   • If the payments are made to self-employed First Nations fishers, do not continue to next step.

     Learn more about if the tax exemption and specific reporting requirements apply: Payments to First Nations workers.

   • If the payments are not made to self-employed First Nations fishers, continue to Step 7 – Report the payment on a T4 slip.

7. Report the payment on a T4 slip

   Depending on the self-employed fisher’s situation, you must report the following amounts on a T4 slip:

   • Box 29 – Employment code 17
   • Box 24 – EI insurable earnings
   • Box 56 – PPIP insurable earnings if fisher worked in the province of Quebec
   • Code 78 – Fishers – Gross income
   • Code 79 – Fishers – Net partnership amount
   • Code 80 – Fishers – Shareperson amount
   • Code 88 – Indian Act (exempt income) – Self-employment

   Learn more: How to report - T4 slip – Information for employers

References

Resources

• What to expect during a payroll examination
• How to get a CPP/EI ruling
• Form TD3F, Fisher's Election to Have Tax Deducted at Source
• Fishers - CPP/EI explained
• Farmers and fishers

Definitions

Legislation