The phone is ringing off the hook and your appointment book is bursting at the seams. You’re actually thinking about turning new patients away. Let’s be honest, it’s a fantastic problem to have—it means your wellness clinic is absolutely thriving! You know it’s time to bring on another practitioner. But then the million-dollar question hits: do you hire an employee or bring on a contractor?
For a small clinic owner anywhere from Prince George to Fort St. John, this isn’t just about paperwork. It’s about your money, your clinic’s vibe, and where you see yourself in five years. Nail this decision, and you’ll have peace of mind. Get it wrong? You could be looking at some serious headaches from the Canada Revenue Agency (CRA). So, let’s break this down, Northern BC style, so you can make a choice that lets you sleep at night.
So, What’s the Real Difference?
At the end of the day, it all boils down to one simple word: control. The CRA really, really wants to know who calls the shots on the how, when, and where of the work. Is it you, the clinic owner? Or is it the practitioner themself?
Think of it like this: are you hiring someone to join your team and work under your direction? That’s probably an employee. Or are you partnering with another business (even a one-person show) to provide services at your clinic? That sounds a lot more like a contractor.
Here’s a quick-and-dirty table to make it crystal clear:
| Factor | Employee | Contractor | | :— | :— | :— | | Control | You set the hours, direct the work, and manage how they do things. | They’re the boss of their own schedule and decide how they perform their services. | | Tools & Equipment | You provide the treatment table, linens, lotions, and booking software. | They usually bring their own special tools and might even have their own booking system. | | Financial Risk | The risk is all yours. If the schedule is empty, you still have to pay them. | The risk is theirs. If they don’t have clients, they don’t get paid. | | Integration | They are a core part of your team and how your business runs. | They run a separate, independent business that happens to serve your clients. |
Let’s Talk Money: A Head-to-Head Cost Comparison
Money matters. Especially when you’re watching every dollar in a small clinic. And believe me, the financial difference between these two models is night and day.
The Real Cost of an Employee (It’s More Than You Think)
Hiring an employee is never just about their hourly wage. The number on their pay stub is just the starting point. As the employer, you’re on the hook for a bunch of extra costs on top of their gross pay. These aren’t optional.
Here’s what you have to pay:
- Employer’s Share of CPP & EI: You have to match their Canada Pension Plan contributions and pay the employer’s portion of Employment Insurance. This adds a hefty percentage right on top of their wage.
- WorkSafeBC Premiums: In a hands-on profession, this is a non-negotiable. You must pay premiums to cover your employee if they get hurt at work.
- Vacation Pay: In beautiful British Columbia, you owe them at least 4% of their gross earnings as vacation pay. That bumps up to 6% after they’ve been with you for five years.
- Stat Holiday Pay: You’ll also need to pay them for stat holidays as laid out in the BC Employment Standards Act.
- Paid Sick Leave: Yep, since 2022, BC employers have to provide up to 5 days of paid sick leave each year.
- And Maybe More… Don’t forget other potential costs like extended health benefits, payroll fees, or even uniforms and equipment.
All of a sudden, that $35/hour practitioner costs you a whole lot more. You’ve got to budget for these so-called hidden costs.
The Simpler Math of a Contractor
The contractor model, which usually involves a percentage split, is way more straightforward on the payroll front.
- You Just Pay Their Invoice: You pay the contractor their agreed-upon rate or split. That’s it. No deductions, no remittances, no surprise employer costs.
- They Handle Their Own Business: The contractor is running their own show. They’re responsible for paying their own income tax, covering both the employee and employer portions of CPP, and deciding if they want to pay into EI for themselves.
- They Cover Their Own Insurance: A real-deal independent contractor needs their own liability insurance and their own WorkSafeBC personal optional protection. You should always, always ask for proof of their coverage before they see a single client.
This route gives you predictable costs and way less admin work. But the trade-off for that simplicity? You guessed it: less control.
Beyond the Bottom Line: What’s Your Clinic’s Vibe?
This decision goes way deeper than just the numbers. It’s about what kind of clinic you’re trying to build.
Why an Employee Might Be Your Best Bet
If you dream of building a tight-knit team that offers a consistent patient experience, an employee is probably the answer. You get the control to:
- Build a Real Team Culture: You can create a collaborative space where everyone is pulling in the same direction and working toward the same goals.
- Guarantee Consistent Service: You can train everyone on your way of doing things, ensuring every single patient gets the same amazing experience you’re known for.
- Invest in Growth: You’re investing in a person who is going to grow with your clinic. Their success is your success.
When Does a Contractor Just Make Sense?
A contractor brings one huge advantage to the table: flexibility. For a growing clinic, that can be gold.
- Handle a Fluctuating Schedule: Not sure if you have enough work for a full-timer yet? A contractor lets you add help without the long-term commitment.
- Bring in Specialized Skills: Want to add an acupuncturist or naturopath a few days a week? The contractor model is perfect for bringing in specialists you don’t need on staff all the time.
- Slash Your Admin Time: If you’re just not ready to dive into the deep end of payroll, a contractor is a much simpler way to expand your offerings—fast.
The Danger Zone: When a Contractor Starts Looking Like an Employee
Here’s a classic trap people fall into: you hire a contractor, but over time, you start treating them like an employee. You set their hours, you give them all their gear, and they only work for you. This is a massive red flag for the CRA.
Misclassifying an employee as a contractor can blow up in your face. If you get audited, you could be on the hook for all the back-pay of CPP and EI you should have been sending in, plus interest and penalties. It’s a brutally expensive mistake to make.
If your “contractor” is starting to feel more like a staff member, it’s time to sit down and have a real conversation about officially making them an employee.
The Northern BC Angle
Let’s be real for a second—attracting top talent to smaller communities in the Cariboo or the Northwest isn’t always easy. The stability that comes with an employee position—a steady paycheque, vacation pay, maybe even benefits—can be a huge selling point. It shows you’re serious and invested in them for the long haul.
Plus, our communities are tight-knit. Patients love seeing a familiar face and building a relationship with their practitioner. A stable team of employees helps build that deep-rooted trust that makes a community clinic successful.
Making the Call with Confidence
Choosing between an employee and a contractor really comes down to four things: Cost, Control, Culture, and Compliance.
- Cost: Can your cash flow handle the true cost of an employee?
- Control: How much say do you need to have in how the work gets done?
- Culture: Are you building one integrated team or a collection of independent pros?
- Compliance: Are you sure your contractor setup would pass the CRA’s sniff test?
This is one of the biggest calls you’ll make as your clinic grows. Every situation is different, and getting it right from the start will save you a world of stress. It’s why navigating these tricky waters is always better with an expert guide. For advice tailored to your clinic’s specific tax and payroll situation, it’s a smart move to get in touch with an accountant who gets your world.
Frequently Asked Questions
What are the biggest red flags that scream ’employee’ to the CRA in a clinic setting?
The CRA looks at the whole picture, not just one thing. But the big red flags are: you setting their specific work hours, them working only for your clinic, you providing all their main tools (tables, linens, oils), you dictating how they perform their treatments, and including them in staff benefit plans. If it walks and talks like an employee, the CRA is going to call it an employee.
In BC, how does my liability as a clinic owner change with WorkSafeBC for an employee vs. a contractor?
It’s a huge difference. With an employee, you are legally required to register with WorkSafeBC and pay premiums for them. You’re responsible. With a true independent contractor, they are their own business and are responsible for getting their own Personal Optional Protection (POP) from WorkSafeBC. You absolutely must ask for and keep a copy of their clearance letter to prove they’re covered and in good standing.
If I pay someone a percentage split of their billings, does that automatically make them a contractor?
Nope, not at all. While a percentage split is super common for contractors, it’s not the magic bullet that defines the relationship. The CRA cares most about control. You can pay an employee on a commission or split basis, so how you pay them doesn’t seal the deal on its own.
Can I bring on a new grad as a contractor?
You can, but it’s often safer and more practical to hire them as an employee. New grads usually need more training, mentoring, and support—all things that point to an employer-employee relationship. Plus, an employee structure gives them a stable income while they build up a client base, which is a massive plus for someone just starting out.
Can BC Employment Standards (like termination notice) apply to a long-term contractor?
Yes! This is a landmine many clinic owners don’t see. In BC, if a contractor becomes economically dependent on you (meaning you’re their main or only source of income), the law might see them as a “dependent contractor.” Even though they aren’t an employee for tax purposes, they could still be entitled to reasonable notice of termination, just like an employee. It really blurs the lines and shows why a rock-solid contract is crucial, no matter which path you take.