One of the biggest advantages of Family-Managed Home Care (FMHC) is choosing your own care providers. Ontario Health atHome funding can be used to purchase home care services or to employ care providers directly. If you choose to employ someone yourself, you take on the legal responsibilities of an employer. This guide walks Ontario families through the payroll basics: the Canada Revenue Agency (CRA), the Workplace Safety and Insurance Board (WSIB) and Ontario’s Employment Standards Act.
Agency or direct hire?
Before you hire, decide how you will receive care:
- Purchasing services from an agency. The agency employs the worker and invoices you. Your bookkeeping is mainly matching invoices to your care plan and paying them from the FMHC account.
- Employing a care provider directly. You hire, schedule and pay the worker. This gives you more control, and it also brings payroll, tax remittances and employment-law obligations.
Many FMHC families use a mix of both. Whichever you choose, your FMHC funding must stay within the services in your approved care plan.
Employee or contractor?
A caregiver who works in your home, on your schedule and under your direction is usually an employee, not a self-employed contractor. Getting this wrong can mean paying both the employee and employer share of missed CPP and EI, plus penalties and interest. If you are unsure, the CRA’s CPP/EI Rulings program can give an official decision on a worker’s status.
Step 1: Register with the CRA
As an employer you need a CRA business number with a payroll program account. When you register, explain that you are hiring a domestic employee so the account is set up correctly.
Step 2: Deduct and remit every pay
For each pay, you must:
- Deduct Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and income tax from the employee’s wages
- Add the employer share of CPP and EI
- Remit the total to the CRA by the due date
- Give the employee a pay statement showing gross pay, each deduction and net pay
The CRA’s Payroll Deductions Online Calculator is the easiest way to get the amounts right.
Step 3: Year-end slips and departures
- T4 slips must be given to each employee, and filed with the CRA with a T4 Summary, by the end of February for the previous year.
- A Record of Employment (ROE) must be issued to Service Canada when an employee stops working for you.
Step 4: Check whether you must register with WSIB
In Ontario, the WSIB covers domestic workers employed by one employer for more than 24 hours a week, and employers of full-time domestic workers must register with the WSIB. If a worker’s hours vary but are above 24 hours in most weeks, they are treated as continuously covered. Check WSIB’s rules for your situation before your caregiver’s first shift.
Step 5: Follow the Employment Standards Act
Caregivers employed directly in a private home are “domestic workers” under Ontario’s Employment Standards Act, 2000. They have the same ESA rights whether they work part-time or full-time, and whether they live in or out. That includes minimum wage, overtime, public holidays, vacation pay and notice of termination. Employers must also:
- Give the employee the Ministry’s Employment Standards poster within 30 days of hiring
- Keep written records of hours worked and wages paid
How this connects to your FMHC report
Your monthly report to Ontario Health atHome should tie together the care hours delivered, the wages paid and the remittances sent to the CRA and WSIB. When those three line up month after month, reporting becomes routine.
Carnation Consulting’s CPA-led team runs payroll, remittances, T4s and monthly FMHC reporting for Ontario families. Learn about our FMHC bookkeeping services, read our FMHC monthly reporting guide, or book a free consultation.
Frequently asked questions
Do I need a CRA payroll account to pay an FMHC caregiver?
If you employ the caregiver directly, yes. Employers must register for a CRA payroll program account and remit CPP, EI and income tax deductions.
When do I need WSIB coverage for a caregiver in Ontario?
The WSIB covers domestic workers employed by one employer for more than 24 hours a week, and employers of full-time domestic workers must register.
Does the Employment Standards Act apply to caregivers in my home?
Yes. Domestic workers have the same ESA rights whether they work part-time or full-time and whether they live in or out of the employer’s home.
This article is general information, not legal or tax advice. Check current CRA, WSIB and Ministry of Labour rules, and your FMHC contract, for your situation.
Sources: Ontario Health atHome — FMHC · WSIB — Domestic workers · Ontario ESA guide — Domestic workers · CRA — Payroll
