At Apex Performance Consultants, we provide fractional HR services tailored to the unique needs of small and medium-sized organizations. Our goal is to align people and performance to unlock long-term value for your organization. In our latest post we clarify choosing between hiring an employee or engaging a contractor.
Employees vs. Contractors: What Saskatchewan Business Owners Need to Know.
For small and medium businesses in Saskatchewan, choosing between hiring an employee or engaging a contractor can have big impacts on cost, flexibility, and compliance.
Employees
Employees are on your payroll. You control their hours, tools, and methods. This provides stability and allows you to build long-term skills in-house. Employees can strengthen your culture, deepen customer relationships, and be trained to your standards.
Advantages: Loyalty, consistency, and easier integration into your operations.
Disadvantages: Higher ongoing costs (wages, CPP, EI, vacation pay, benefits), more administrative work, and compliance with Saskatchewan labour standards.
Contractors
Contractors are independent. You pay them for a specific service or project, and they choose how the work gets done. Contractors can offer specialized skills, fill short-term needs, and help you scale quickly without permanent commitments.
Advantages: Flexibility, no payroll deductions, and cost savings when work is intermittent.
Disadvantages: Less control over how and when work is performed, potential conflicts with core staff, and risk if the Canada Revenue Agency (CRA) or Saskatchewan Labour Relations Board determines they’re actually an employee.
Key Tip: Misclassification can lead to back payments for taxes, benefits, and even penalties. CRA considers factors like control, ownership of tools, and chance of profit/risk of loss when determining status.
The right choice depends on your business stage, workload predictability, and need for control. For ongoing, integrated roles, employees often make sense. For short-term, specialized, or fluctuating work, contractors can be the smart move—provided you set clear agreements.
Employee vs. Contractor Decision Checklist
- Control & Supervision
- Do you set the person’s work hours? → Employee
- Do they decide when/how to work? → Contractor
- Tools & Equipment
- You provide the tools, tech, or workspace → Employee
- They bring their own → Contractor
- Integration into Your Business
- Work is central to your core business → Employee
- Work is an add-on, project, or peripheral → Contractor
- Financial Risk & Reward
- Guaranteed wages regardless of results → Employee
- Paid per project, bears risk of profit or loss → Contractor
- Exclusivity
- Works only for you or primarily for you → Employee
- Has multiple clients → Contractor
- Duration
- Indefinite or ongoing relationship → Employee
- Defined start and end date → Contractor
- Legal & Tax Obligations in Saskatchewan
- Employee: Must comply with The Saskatchewan Employment Act (hours, overtime, vacation pay), register for Workers’ Compensation Board (WCB), and remit CPP, EI, and income tax.
- Contractor: May require a business number, GST registration (if over $30,000 revenue), and their own WCB coverage if working in covered industries.
Tip: Misclassification can lead to CRA back taxes, EI/CPP contributions, vacation pay claims, and penalties from Saskatchewan Labour. Ensure you consult with your accountant and corporate lawyer.
Apex provides affordable and practical HR expertise on a fractional basis, tailored to small teams. If you are undecided whether to hire an employee or an contractor, we can help you. Contact us by clicking here