How you pay, tax, and log these temporary workers could have financial implications
Freelancers, contractors, entrepreneurs, side hustlers—whatever you coin them, these workers are on the rise, riding the tide of a gig economy that’s impacting labour markets around the world.
This shift sees fewer and fewer individuals working full-time from nine to five out of a cubicle and more taking the flex route, clocking hours on their own terms, from wherever, as Uber drivers, Foodora deliverers and Airbnb hosts, or specialists such as writers, developers, designers and consultants. [See 3 handy tax-filing tips for gig economy workers.]
Employers are certainly catching on. According to a recent study, Workforce 2025: The future of the world of work, by Randstad Canada, non-traditional workers make up upwards of 30 per cent of Canada’s workforce, with one in four employees being freelance. Businesses also report that roughly one quarter of their staff work remotely, says the study.
“Clearly the rise of technology is shifting the way companies behave,” says Dominic Levesque, president, professionals and innovation lab at Randstad Canada. “More and more, it’s going to be project-based because companies need to manage a temporary workforce in order to stay competitive.”
It begs the question: how prepared are organizations for this new way of working from a financial planning and taxation standpoint? It’s an opportunity for CPAs, as trusted advisers, to lend their expertise, assess risks and make sure their clients are properly tracking payroll or income earned. [See Lessons from the Gig Economy]
“[CPAs are] right in the thick of it because they are dealing with companies and they are dealing with individuals,” says economist, futurist and speaker Linda Nazareth, author of Work Is Not a Place: Our Lives and Our Organizations in the Post-Jobs Economy. “CPAs are dealing directly with how the economy evolves, what this does to economic activity, what this does to the industrial landscape.”