Three slips, three different returns
The first job on a nurse's return is not the numbers; it is deciding what each slip means. A hospital T4 is straightforward employment income. Some agencies also employ you outright, with a T4 and full withholdings. But many agencies place you as a self-employed contractor, and there the slips get strange: under the placement-agency rules, the agency can be required to deduct CPP, and often EI, at source even though your fees are business income, reported on a T4A in box 048 and filed on a T2125. Nurses routinely read that deduction line as proof they were taxed, when income tax was never withheld at all.
| Situation | Income type | Withheld at source | Deductions available |
|---|---|---|---|
| Hospital or clinic T4 | Employment | Tax, CPP, EI | Dues; a T777 only with a T2200 |
| Agency as employer (T4) | Employment | Tax, CPP, EI | Same as above |
| Agency placement (T4A box 048) | Self-employment | Often CPP and EI only, no income tax | Business expenses on the T2125 |
| Direct clients, no slip | Self-employment | Nothing | Business expenses on the T2125 |
We classify every engagement before filing, because the classification decides the schedule, the deductions and the balance owing. Where an agency's paperwork contradicts the working reality, we say so and file a position we can defend.
Why multi-employer nurses owe every April
Each employer's payroll system withholds as though its job were your only one. Claim the basic personal amount on two TD1 forms, add a casual line at a second hospital and untaxed T4A fees on top, and a refund quietly becomes a bill. The fix costs nothing: tick the more-than-one-employer box on the second TD1 so that employer withholds without the credit, ask payroll for extra withholding per cheque, or move a fixed slice of every agency deposit into a separate tax account the day it lands.
Once your net tax owing passes $3,000 in back-to-back years, the CRA will put you on quarterly instalments; we set the amounts so interest never enters the picture. The planning behind those numbers, including smoothing lumpy contract income, lives on our tax-planning page for nurses.
There is a refund hiding in the same mess, too. Nurses who worked casual lines at two or three GTA hospitals in one year often have CPP and EI over-deducted across employers. The return recovers the employee share automatically, but only if every slip actually makes it into the file, so we chase the stragglers before filing rather than amend after.
Dues and licences, claimed on the right line
Professional costs are where nurse returns leak, in both directions. The rules worth knowing:
- CNO annual renewal: deductible for employees on line 21200, and on the T2125 for the self-employed. Never both.
- ONA union dues: usually already in box 44 of your T4 and claimed automatically. Claiming the receipt again double-counts.
- Professional liability protection: the CNO requires it, and premiums needed to keep your professional status qualify on line 21200. The voluntary association membership wrapped around the coverage generally does not qualify for employees, though a self-employed nurse deducts it as a business cost.
- Courses and certifications: an eligible institution's T2202 feeds the tuition credit; a self-employed nurse's job-related CE is a T2125 expense instead.
The self-employed filing, done properly
Agency and contract fees go on a T2125 with a real expense file behind them: travel between placements, scrubs and equipment, the work share of your phone, liability coverage, courses. Both halves of CPP are calculated on the return, with the employer half deductible. Self-employed filers get until June 15 to file, but the balance is still due April 30, and the money deadline is the one that matters. HST rarely applies, since nursing services are exempt; the registration edges are covered on our accounting page for nurses.
A missing slip changes nothing. Agencies are inconsistent about issuing T4As for contractor fees, and direct engagements often produce none, but the income is reportable either way and the CRA's matching program eventually sees what the agency remitted. We file from your own deposit records, then reconcile any slips that arrive against them, not the other way around.
Incorporated nurses file a corporate return regardless of how the personal-services-business question shakes out, and we prepare the T2 through Corporate Tax Filing alongside the owner's T1 through Personal Tax Filing, so salary, slips and instalments tell one story. And when a review letter arrives, most often on vehicle claims or T2125 expenses, CRA Audit & Review Support answers from the working papers we filed from, which is why most letters end at the first reply.
Source: CRA — Line 21200, annual union and professional dues.
