Working as an independent contractor for co-op credit

Key considerations and implications of working in Canada as an independent contractor.

Work as an independent contractor can count for co-op credit if it meets standard or flexible work term requirements and you're physically located in Canada during the work term.

Learn more about what independent contracting means, how to get your role approved and what to consider before accepting an offer.

What is an independent contractor?

An independent contractor (also called a consultant) is a self‑employed worker who provides services to a company through their own business.

This is different from being an employee. Employees work as part of a company’s business and typically receive more legal protections, while independent contractors operate more independently and are responsible for managing their own taxes, contracts and working arrangements.

Employee vs independent contractor

Whether you are properly classified as an “employee” or as a consultant/independent contractor is a legal question and carries with it a variety of implications. Simply using the label of employee or independent contractor is not conclusive in defining worker status.

The University of Waterloo takes no position about whether students are properly classified as a consultant or independent contractor, or whether students should or should not enter into work relationships with companies as consultants or independent contractors. In each case, it's up to the student to make their own decision and pursue the opportunity of their choice.

This information isn't intended to be nor should it be construed as legal advice. Waterloo doesn't review or comment on individual student-company contracts for this purpose. If you have questions about the terms of a contract presented to you by a company, it's your responsibility to seek legal advice if appropriate and deal directly with the company regarding the terms of the contract.

Getting your independent contractor job approved for co-op credit

The process for getting your independent contractor job approved for co-op credit depends on where you found the job.

Roles on WaterlooWorks

Full-Cycle Service or Employer-Student Direct job boards
- Roles posted on these job boards meet standard work term requirements. If a position is intended to be a contractor role, it'll be clearly indicated. You're responsible for deciding whether or not to apply to the role.
Contract, Part-time and Volunteer job board
- Follow the Arrange Own Job process so we can determine whether the job meets our flexible or standard work term requirements.

Roles outside WaterlooWorks

Follow the Arrange Own Job process so we can determine whether the job meets our flexible or standard work term requirements.

If you wish to have an independent contractor position considered for credit, we'll need you to acknowledge you understand the implications by submitting the Independent Contractor Employment Waiver form in WaterlooWorks > Submit a form > Work Term Admin > Independent Contractor Employment Waiver (5023).

What you agree to when you accept an independent contractor role

By accepting an independent contractor position, you confirm that:

You’ve reviewed this information and had the opportunity to seek legal or tax advice
The contract is between you and the company only
You accept any risks and responsibilities associated with the contract
You'll be living and working in Canada during your work term

You also understand that:

You may be working for a company outside your province (or outside Ontario) and not on-site
You're responsible for determining appropriate workplace insurance coverage, based on jurisdiction
Waterloo reviews roles for co-op credit only and is not a party to your contract

If you need legal or tax advice:

Undergraduate students can contact WUSA Legal Service
Graduate students can contact the GSA Legal Protection Program
You may also consult your own lawyer or accountant

Key differences between independent contractors and employees

Understanding these differences can help you decide if a contractor role is right for you.

Taxes

Employee: If you're an employee in Canada, taxes and statutory deductions will usually be deducted by the employer.
Independent contractor: You will typically be paid a gross amount and you'll be responsible for paying applicable tax and statutory deductions to the government. If you're classified by a company as a consultant/independent contractor but later audited by the Canada Revenue Agency and deemed to be an employee, then you could be liable for any unpaid income tax as well as Employment Insurance and Canadian Pension Plan premiums, plus interest and penalties.

Termination

Employee: If you're an employee in Canada, you're entitled to notice of termination or termination pay, unless you're working under a fixed term contract and your employment ends at the end of the term.
Independent contractor: Your contract can be terminated without notice or pay in lieu.

Workers’ compensation

Employee: If you're an employee in Canada, you may be entitled to workers’ compensation coverage under your employer’s plan.
Independent contractor: You may not be covered under your company's plan. This will likely depend on the jurisdiction in which the company is based, or your province of residence.

Form of agreement	Is the work being performed under an employment agreement or an independent contractor or consulting agreement? Courts may give some weight to the form of the agreement, and while important, the form of the agreement may not be determinative. They may consider the substance of the relationship including the rights and obligations of the parties.
Duration	Are the services you are asked to perform limited to a defined period of time or to a defined project? What is the length of the contract and what are your hours of work? Does the company know the number of weeks or hours required for work-term credit? A fixed term is more indicative of an independent contractor relationship, while an indefinite term is more indicative of an employment relationship.
Scope of work	Will you be performing the same work as other employees of the company? Overlap between the duties of a worker and the company's other employees may indicate employment status.
Control	Will you be free to determine where, when and how you perform required work? Will the work be supervised or will you be free to work with minimal supervision? Independent contractors typically have a significant degree of autonomy in performing required work. The more a company has the right to control performance of the work, the more likely the worker is an employee.
Tools and training	Will you be responsible for supplying most or all of the elements required to perform the contracted work? Will you be responsible for supplying tools required to perform the work? Will you be required to perform the work in facilities controlled by the company? Are licenses, permits or certificates needed to perform the work and are they held by the worker or the company? Are you responsible for supplying your own equipment or will the company provide it for you (i.e. computer, phone and internet)? Can you claim these as deductible expenses when filing your taxes? If the company supplies all of those required elements, the worker is more likely to be considered an employee.
Remuneration and benefits	How will you be paid? Are you required to invoice for your work, and if so, what information must you provide on your invoice? What is the frequency of payment? What is the quantum and basis of payment (hourly, per diem, etc.)? If applicable, are there mechanisms for disputing an invoice and/or withholding payment/services? Were you enrolled for workplace benefits? Typically, independent contractors are not granted the same benefits that employees receive (e.g., participation in health care benefits, pension benefits, short-term or long-term disability benefits, etc.). Will you receive compensation for overtime or public holidays? Will you receive vacation?
Taxes	To what government authority are taxes and other statutory remittances payable on the amounts you are earning and who is responsible for making the payments? Who is responsible for reporting/filings/remittances respecting all federal and provincial income taxes, EI, Canada or Quebec Pension Plan, workers compensation, health insurance premiums or contributions, GST/HST and local taxes as required by the applicable laws? Are taxes and/or other statutory remittances payable in another jurisdiction (i.e. U.S. federal or state authorities)? Is the company withholding from your pay and remitting on your behalf, or are you responsible for remitting? Generally speaking, independent contractors are responsible for calculating and remitting their own statutory deductions to the Canada Revenue Agency, including Canada Pension Plan contributions, Employment Insurance premiums and income tax.
Immigration	If working for a company based outside of Canada, are you required to apply for a foreign Visa?
Workers’ compensation insurance	Are you required to obtain your own workers’ compensation insurance coverage?
Intellectual property	How is ownership of intellectual property addressed? Does the agreement contemplate Waterloo Policy 73?
Exclusivity	Are there terms of the contract that survive its termination that may affect your ability to work elsewhere in the future? Independent contractors are typically free to provide services to other clients. Any restriction imposed by the company on the worker's ability to serve other clients may indicate employment.

Publicly available resources

Learn more about employment standards and contractor status federally or provincially.

Location	Resource
Canada	Canada Revenue Agency: Employee or self-employed?
British Columbia	Employee or independent contractor factsheet
Alberta	Employee or contractor? Know the difference
Saskatchewan	Independent contractors
Manitoba	Independent contractors factsheet
Ontario	Your guide to the Employment Standards Act: Employee status
Quebec	Employee or self-employed person?
New Brunswick	Coverage under the Employment Standards Act
Nova Scotia	Employee vs. Independent Contractor
Prince Edward Island	Guide to employment standards
Newfoundland and Labrador	Labour relations at work
Yukon	Employment standards
Northwest Territories	Employment standards
Nunavut	Labour Standards Compliance Office