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Interior design studio payroll: staff, stylists, interns, and commission on the margin
Design studio payroll turns on three calls that most owners make by habit rather than by rule: which of the people around the worktable are employees, whether the intern is being paid legally, and how commissions tied to procurement margin move through withholding. We set each one up deliberately, so the studio can staff a big install week without creating a CRA problem that outlives the project.
By the AnalytIQ Accounting team · Last reviewed: August 12, 2026
The roster question: who gets a T4 and who sends an invoice
The working relationship decides the paperwork, not the job title. Salaried and hourly designers, design assistants, and the studio manager are employees: source deductions every run, CPP and EI, vacation pay, and a T4 in February. A stylist you bring in for install week — who dresses shelves for four other studios, arrives with her own kit, and bills a day rate through her own HST number — is a contractor: pay the invoice, claim the input tax credit, and report the fees on a T4A with box 048. CRA tests control, tools, the right to subcontract, and who carries financial risk, and it tests how the relationship actually runs rather than what the contract calls it.
| Person in the studio | Payroll treatment |
|---|---|
| Senior or intermediate designer on salary | T4 employee — deductions each run, vacation accruing, overtime unless genuinely managerial |
| Design assistant paid hourly | T4 employee — time-and-a-half after 44 hours in a week |
| Contract stylist for install and staging days | Invoice plus year-end T4A box 048 — only while she is genuinely independent |
| Freelance renderer or reveal-day photographer | Invoice plus T4A — collect their business and HST details before the first payment |
| Student intern | Paid employee, unless placed through an approved school co-op program |
| US-based virtual design assistant | Neither T4 nor T4A — a different paper trail, covered in our cross-border guide |
The danger is drift. The stylist who now works three days a week in your studio, on your schedule, styling only your projects has stopped being a vendor on CRA's factors — and a reassessment collects both shares of CPP and EI for every year she was misfiled. We review the roster annually and convert anyone the facts have already converted.
Interns: the ESA has no unpaid category
In Ontario, a person performing work for your studio is an employee entitled to at least minimum wage, vacation pay, and public holiday entitlements — from the first day. The narrow exception is a student placed through a co-op or internship program run by a secondary school, college, or university; those placements can lawfully be unpaid because the school, not the studio, frames the arrangement. Offering portfolio credit, mentorship, or exposure in place of wages does not create an exception, and design is an industry where the Ministry of Labour has heard every version of that offer. Pay interns properly, run them through payroll like anyone else, and treat the co-op paperwork as the only exception worth relying on.
Procurement commissions are wages, and the plan must be computable
Studios often pay designers a share of the margin on furnishings they specify, or a percentage of procurement volume. However the plan is framed, the payout is employment income: it goes through the pay run with tax, CPP, and EI withheld — using the bonus method so a strong quarter is not over-taxed as if it repeated monthly — and vacation pay accrues on it, because commissions are wages under the ESA.
Two design rules keep these plans from becoming disputes. First, pay on delivered margin, not on proposals — furnishings get damaged, back-ordered, and returned, and a commission advanced at proposal stage becomes a clawback argument later. Second, the plan must be computable from numbers the ledger already produces: landed cost against selling price by project, which is exactly the margin reporting our interior designer bookkeeping maintains. A commission anyone has to argue about in a spreadsheet was designed wrong.
The run itself, and the US project wrinkle
A studio of two to ten people fits cleanly on Wagepoint or QuickBooks Online Payroll: direct deposit, automatic CRA remittances — monthly at this size — and digital TD1s at onboarding. February closes with T4s for staff and T4As for the stylist bench in one coordinated season, and employer-paid ARIDO dues generally stay off the T4 where membership is a condition of the role and the studio is the primary beneficiary.
US work adds a payroll dimension most studios meet unprepared: staff spending install weeks at a client's Palm Beach house, or a US-based stylist or VA on the roster who needs contractor paperwork from the American rulebook rather than a T4A. Those questions — days in the US, withholding on the studio's own design fees, USD payments — live in our cross-border tax guide for interior designers, and the payroll setup should anticipate them before the first US project, not after. What a fixed-fee engagement covers is on our payroll services page.
Common questions.
Can we use contract stylists for install week without putting them on payroll?
Yes, while they are genuinely independent — multiple studio clients, their own kit, day rates billed through their own business. Pay the invoice and issue a T4A with box 048 at year-end. Once a stylist works set days, only for you, under your direction, the facts have made her an employee.
Are unpaid design internships legal in Ontario?
Almost never. Anyone performing work is owed at least minimum wage unless they are placed through an approved school, college, or university co-op program. Portfolio credit and mentorship are not wages.
How should commission on procurement be paid?
Through payroll, as wages: withhold using the bonus method, accrue vacation pay on it, and pay on delivered margin rather than proposals so returns and damage never turn into clawback fights.
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