Who We Help · Therapists · Payroll
Therapy practice payroll: associates, splits, and the contractor question
Group practices run on the split — the clinic keeps a percentage of each associate's session fees — but the split itself proves nothing about employment status. What decides it is who controls the caseload, who owns the client relationship, and who carries the professional risk. And the direction the money flows shapes both the paperwork and the evidence, long before anyone asks for a ruling.
By the AnalytIQ Accounting team · Last reviewed: August 12, 2026
The split-percentage model, and what it doesn't settle
A percentage split — say the clinic keeps 40% of session fees for space, admin, and referrals — is a fee arrangement, not a status. Clinics routinely assume "associate on a split" means contractor, but CRA looks past the formula at the working relationship: who fills the calendar, who sets the hours, who bears the cost when a client no-shows, whose name the client actually engaged. Two associates on identical splits can land on opposite sides of the line, and the consequences of guessing wrong are the usual ones — both shares of CPP and EI reassessed retroactively for the clinic, deductions denied for the associate. The stakes rise with scale: a ten-associate practice that guessed wrong is carrying ten parallel liabilities, all accruing interest from the same start date.
Therapy-specific signals, both directions
| Points to a self-employed associate | Points to an employee |
|---|---|
| Builds their own caseload; clients could follow them if they left | Clinic assigns intakes from its waitlist and owns the client relationship |
| Chooses their own hours, room days, and telehealth mix | Works shifts the clinic schedules, in the clinic's rooms |
| Pays their own registration, liability insurance, and supervision | Clinic covers dues, insurance, and clinical supervision |
| Free to see clients elsewhere and to decline referrals | Exclusivity, required availability, and mandated caseload minimums |
| Absorbs no-shows and cancellations under their own policy | Paid per booked hour whether or not the client attends |
No single row decides it — the pattern does. We review the pattern annually, because associate relationships drift toward employment as practices grow and impose structure.
Which way the money flows, and the paperwork each way
In the clinic-collects model, the practice bills clients, keeps its percentage, and remits the rest. Those remittances are fees for services: an unincorporated associate's year of payments goes on a T4A in box 048, while an associate billing through a professional corporation simply invoices. In the associate-collects model, the therapist bills clients directly and pays the clinic for rooms and admin — the clinic issues invoices for facility fees and no slip exists in either direction. The second model also produces stronger contractor evidence, because the associate visibly runs their own revenue. Insurer-funded sessions push the other way — when benefits plans reimburse the clinic, clinic-collects is unavoidable, and the rest of the contractor evidence has to carry more weight. External clinical supervision sits outside all of this: it is a professional fee, another box 048 entry when you pay an unincorporated supervisor personally.
One recent change simplifies the flow: since June 2024, psychotherapy and counselling therapy services are GST/HST-exempt, so associates who once charged HST on their share of fees generally no longer do — and the clinic's input tax credits shrink to match. We reset both sides of that calculation when we take on a practice.
The people who are definitely payroll
Intake coordinators, receptionists, and billing admin are employees, full stop — the clinic sets their hours and supplies everything they use. The routine for a small practice is compact: an RP account under the clinic's business number, a platform like Wagepoint withholding CPP, EI, and tax, remittances by the 15th of the following month (quarterly once you qualify as a small remitter), T4s by the last day of February, and an ROE within days of any departure. Evening and weekend coverage means part-time staff, and Ontario's public-holiday formula — four weeks of wages divided by twenty — scales their stat pay automatically. A remote admin in another province takes that province's tax tables and holiday rules with them.
Owner pay and the telehealth edge
If you practise through a professional corporation, your own compensation is the salary-dividend blend every incorporated owner models — with the reminder that salary is what builds RRSP room, and no employer pension is coming. Family shareholding in health-profession corporations is tightly restricted, so a documented salary for genuine admin work is usually the only family channel worth discussing. Timing matters as well — salary must be paid and remitted on before year-end to land in the year, while a dividend can wait until the practice's numbers are final. And if your couch is increasingly a webcam — US clients, snowbird sessions from Florida — the payroll file stays Canadian while the income raises US-source and licensure questions we cover in our cross-border guide for therapists.
Common questions.
Are associates at my group practice contractors or employees?
The split percentage does not decide it — control does. Associates who build their own caseloads, set their own hours, and carry their own insurance support contractor status; assigned intakes, set shifts, and exclusivity point to employment.
Do I issue T4As to my associates?
Only in the clinic-collects model, and only to unincorporated associates — their remitted share goes in box 048. Associates with professional corporations invoice you, and in the associate-collects model no slip exists at all.
Do associates still charge HST on their split?
Generally no. Psychotherapy and counselling therapy became GST/HST-exempt in June 2024, which removed HST from most associate-to-clinic billings — and reduced the clinic's input tax credits at the same time.
Related reading
A pay structure your practice can defend.
Book a consultation and get a plain answer on exactly what applies to you.