Amazon seller payroll: VAs, prep staff, and paying yourself properly

CRA decides who is an employee — not your contract

Calling your listing manager a contractor does not make it so. CRA applies the tests in its guide RC4110: who controls the work, who owns the tools, whether the worker can subcontract or hire helpers, and who carries the chance of profit and the risk of loss. A VA who works set hours inside your Seller Central account, follows your SOPs, and serves only your business looks like an employee under those tests — even if they invoice you hourly.

The stakes are concrete. When CRA reclassifies a contractor, you owe both the employer and the employee shares of CPP and EI retroactively, plus penalties and interest. We review each ongoing relationship against the tests before it becomes a pattern, because the fix is cheap early and expensive late.

The slip map: who gets a T4, a T4A, or a 1099

Canadian employees get a T4; Canadian contractors get a T4A with fees for services reported in box 048. Both are due by the last day of February. Your overseas VA usually gets neither: a non-resident paid for services performed entirely outside Canada triggers no Canadian withholding and no slip — keep the signed contract and your Wise or Payoneer payment records to support the deduction instead.

US-based helpers mirror this. Collect a Form W-9 from any US freelancer before the first payment. If you pay them through a US entity — or your Canadian company carries on a US trade or business — you generally file a 1099-NEC once payments reach US$600 in a year. A US prep centre is normally a corporate vendor, not payroll: its invoice is simply an expense. How your entity structure shapes those US filing duties is a core part of our cross-border work for Amazon sellers.

One team, five payees, five treatments

A mid-size FBA operation often pays all five of these in the same month. Each row gets different treatment:

Running real payroll for prep and warehouse staff

Hire in Canada and the sequence is fixed: open an RP payroll account under your business number before the first pay run. We put FBA clients on Wagepoint or QuickBooks Online Payroll — both calculate CPP, EI, and income tax, pay net wages by direct deposit, remit to CRA, and produce T4s that tie back to your books without rekeying.

Remittances follow CRA's calendar. New and regular employers remit by the 15th of the month after payday; small employers with average monthly withholding under $3,000 and a clean record can remit quarterly. Ontario adds WSIB registration within 30 days of your first hire and the Employer Health Tax once annual Ontario payroll passes the $1 million exemption. Q4 matters for FBA: seasonal prep staff hired for the holiday surge still need full onboarding, and each one who leaves in January needs an ROE filed promptly.

Payroll is also a unit-economics number for FBA. Prep labour belongs in your landed cost per unit alongside freight and Amazon fees, so we map wage costs into the same per-SKU view your bookkeeping uses — labour creep then shows up as margin erosion in the monthly numbers, long before it shows up anywhere less forgiving.

Paying yourself: salary or dividends from your FBA corporation

Salary is deductible to the corporation, creates RRSP room, and builds CPP; it also means running yourself through payroll with monthly remittances. Dividends skip CPP and payroll admin entirely — a T5 at year-end — but create no RRSP room. An owner holding more than 40% of the voting shares is generally EI-exempt either way, so EI rarely tips the decision.

For Amazon sellers the deciding factor is usually cash rhythm. Inventory purchases eat cash in waves ahead of Q4, so many of our clients run a modest fixed salary and top up with dividends after the January settlement lands. We model the split each year-end alongside CFO-level cash forecasting, so owner pay never competes with a purchase order. One screen first: if family members hold shares, the TOSI rules can tax their dividends at top rates, so we check the shareholder mix before committing to a dividend-heavy plan.

Source: CRA — RC4110, Employee or Self-Employed?.