For an Employer, There Are Advantages to Classifying a Worker

question 80

Multiple Choice

For an employer, there are advantages to classifying a worker as an independent contractor. Which of the following is a primary advantage?

• A)The penalties for misclassifying an employee as an independent contractor are mild.
• B)It saves the costs associated with employment insurance, workers' compensation, and the Canada Pension Plan.
• C)Independent contractors typically have better work ethics and higher qualifications than do regular employees.
• D)Independent contractors are typically more productive than regular employees are.

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Definitions:

Book Income

The income reported by a company in its financial statements, calculated based on accounting rules rather than tax regulations.

Taxable Income

The portion of an individual's or company's income that is subject to taxes according to government regulations.

Income Measurement

The process of determining the monetary amount of the income earned by a business during a specific period.

Constructive Receipt

A tax principle stating that income is considered received by the taxpayer once it is credited to their account or made available without restriction.