How to pay a sub-contractor

My accountant advised me to ask my driver (who is a sub-contractor) to invoice me and add the HST (13 percent here in Ontario). So I have been paying him as mentioned. Is this the way it's normally done in the industry?

Of course I pay WSIB (but do not have to withhold tax and pay additional benefits as he's not an employee).

Can you guys suggest an easy way for my driver to invoice me? Right now he lists individual runs to include miles (as he's paid by the mile) per trip/day worked. Now I gets a little bit too much to refer back to the carrier settlements and make sure his days worked match what I am being paid out (those who do it this way will understand). As I'm writing this I realized that this may be the best way to be invoiced but thought I would ask how you pay your drivers if they are not employees.

 

Really?

My accountant had said that he falls under the category of a sub-contractor as he decides whether he wants to take the loads. He's not obligated to perform any work unless he chooses to.

Perhaps I need to seek the services of an accountant who deals with owner operators...

 

Well actually he's making more than the company drivers with the exception of holiday pay... and he doesn't have to share a truck (always the same one).

 

Okay... will check. So as an employer one would pay EI and CPP (no HST to the employee as he is not invoicing HST as a sub-contractor).

 

I guess I forgot to mention that he already had a registered company and this is why he has been invoicing me from day one.

 

44 cents per mile plus safety bonus.