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Dance studio payroll: the instructor question, answered before CRA asks it
The dance industry pays instructors as contractors out of habit, and CRA disagrees out of principle: a teacher working your timetable, in your rooms, with your students, to your syllabus, is an employee on the standard factors — invoices notwithstanding. Fixing that call is most of what studio payroll is. The genuine contractors are the visitors: guest choreographers and master-class artists who pass through every studio in town.
By the AnalytIQ Accounting team · Last reviewed: August 12, 2026
Why CRA sees employees where studios see contractors
Run the facts through CRA's own test and the usual studio instructor fails the contractor claim on every factor. The studio sets the timetable and the class levels, supplies the room and the sound system, owns the student relationships, and often prescribes the syllabus — RAD, Cecchetti, or the studio's own progression. The instructor cannot earn more by working smarter, only by teaching more hours, and has no real risk of loss. That is control, no tools, no chance of profit: an employee, even if they invoice monthly.
The exposure is retroactive and lands on the studio, not the teacher: both shares of CPP and EI, plus penalties and interest, commonly triggered when one former instructor files for EI or requests a ruling on form CPT1. A studio with six teachers paid as contractors for three years is carrying a five-figure contingent liability into every season. Converting voluntarily — new contracts, payroll onboarding, a clean cutover date — is dramatically cheaper than being converted.
The roster, role by role
| Role | Usual call | The deciding fact |
|---|---|---|
| Season instructor on the weekly timetable | Employee | Studio controls schedule, space, students, and syllabus |
| Competition-team coach, year-round | Employee | Continuous, exclusive, central to the studio's program |
| Guest choreographer setting a competition piece | Self-employed | Fixed engagement, own method, works many studios |
| Touring master-class artist | Self-employed | One-off dates at a negotiated fee |
| Front desk and admin staff | Employee | Set hours at the studio's direction |
| Recital stage crew hired for show week | Depends | Your hires are payroll; the venue's crew bills through the venue |
Slips follow the sorting: employees get T4s with full source deductions, and unincorporated guest artists paid more than $500 in the year get a T4A with box 048. Keeping the two streams separate in the books is what makes February painless.
A payroll shaped like a September-to-June season
Studio payroll is small cheques in large numbers: part-time instructors paid per class, hours that shift with enrolment, and a roster heavy with students and young workers who have the same ESA entitlements as anyone else — minimum wage reconciliation when per-class rates meet long rehearsals, public holiday pay, and vacation pay on every cheque by written agreement so nothing accrues over the summer break. When the season ends in June, each departing employee's ROE is due within five days, and summer-intensive staff come back on as fresh hires with their own paperwork. Per-class rates need an hours log behind them, because minimum wage, public holiday pay, and vacation percentages are all computed on hours and wages — not on classes taught.
Recital week deserves its own line because it compresses a year of edge cases into seven days: costume coordinators, extra front-of-house shifts, and stagehands you hire directly all run through payroll, while the theatre's own technicians invoice through the venue as a supplier. Booking those costs to a recital job code also keeps the show's true margin visible, which feeds the pricing work on our studio CFO services page.
The rails are simple once the sorting is done
One RP payroll account, a cloud platform like Wagepoint or QuickBooks Online Payroll sized for part-time complexity, remittances by the 15th of the following month, and T4s and T4As by the last day of February. Ontario's Employer Health Tax only starts once payroll passes the $1 million exemption, which few independent studios reach, and we confirm WSIB registration and classification for your mix of teaching and admin staff rather than guessing. For the owner, the salary-versus-dividend blend is a yearly modelling exercise, not a default. One arrangement genuinely sits outside payroll: a teacher who rents your room, runs their own classes, and collects fees directly from their own students is a tenant, not staff — rent income for you, and the written agreement should say exactly that.
Competitions, and the one border note that matters
US competition weekends do not create US payroll for the studio — travelling staff remain on your Canadian payroll — but prize money, entry economics, and what a US trip does to the studio's tax picture are their own small subject, handled honestly on our dance studio cross-border tax page. Domestically, classification is the whole game; get that right and the rest of studio payroll is routine.
Common questions.
Our instructors have always invoiced us. Are we really at risk?
If they teach your timetable, in your space, with your students, CRA sees employees regardless of the invoices — and a reassessment collects both shares of CPP and EI plus penalties, usually for multiple years. A voluntary conversion with a clean cutover date is far cheaper than a ruling you did not initiate.
Which people at a studio are genuinely contractors?
The visitors: a guest choreographer setting a piece over a fixed engagement, or a touring master-class artist with a negotiated fee and many studio clients. Unincorporated guests paid over $500 in a year get a T4A with box 048; your season instructors do not fit this category.
What happens to payroll when the season ends in June?
Employees whose work stops get an ROE within five days of their final pay period, vacation pay should already be settled on each cheque, and summer intensive staff are onboarded as new hires. T4s for the calendar year still land the following February.
Related reading
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