But there’s a catch – and it could cost you dearly.
If you designate a room in your home purely as office space, with no personal uses, a portion of your home could become liable for capital gains tax (CGT) when it is sold.
This overrides the Private Residence Relief, which makes your main home completely exempt from CGT.
“Be sure to designate your office a dual purpose office, for private and business use, to avoid this trap,” Mr Bull said.
In practice, this means having a bed or exercise machine in the room for example. If the room is small, you could also use it as a family study.
• Could I set up as a company and slash my tax bill?
• Freelancers face new tax clampdown – from their employers
But be careful if you decide to use business equipment such as computers for personal use.
This is because you can often deduct the cost of purchasing “business assets” from tax entirely using the annual investment allowance. The yearly limit is currently £500,000, but this will fall to £200,000 on January 1, 2016.
But, if you purchase a product that you will also use outside of the business, you must reduce the capital allowances you claim.
For example, if you buy a laptop for £600 and you use it outside your business for half of the time, the amount of capital allowances you can claim is reduced by 50pc.
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- Issued: August 2008
- Content last reviewed: January 2018
What is the purpose of the Employment Standards Act, 2000 ()?
The Employment Standards Act, 2000 () sets out the rights and responsibilities of both employees and employers in Ontario workplaces. It also contains provisions that apply to people who are seeking employment with temporary help agencies and, in some cases, to clients of such agencies, even though the client business is not the employer of the person filing a claim under the .
What is the Employment Standards Act, 2000?
The Employment Standards Act, 2000 () sets out minimum rights for most employees in Ontario workplaces. It includes standards on payment of wages, public holidays, hours of work, overtime pay, vacation time and pay, statutory leaves, and termination and severance entitlements. If you are an employee working in Ontario, you are probably covered by the . However, some employees are not covered by the and some employees who are covered by the have special rules and/or exemptions that may apply to them. For more information, see the Your Guide to the Employment Standards Act, 2000.
What are homeworkers?
Homeworkers are employees who do paid work out of their own homes for an employer (e.g., online research, preparing food for resale, sewing, telephone soliciting, manufacturing, word processing).
Independent contractors are not homeworkers under the .
Are homeworkers the same as domestic workers?
No, homeworkers are not the same as domestic workers. Homeworkers do paid work out of their own homes for an employer. In contrast, domestic workers work in a private home directly for the person who owns or rents the home. They do things such as housekeeping and cooking, or provide care, supervision or personal assistance to children or people who are elderly, ill or disabled.
Here is an example of the difference between homeworkers and domestic workers: employees who prepare food at home for resale by their employer are homeworkers, but employees who prepare food in a private residence for the people living there to eat are domestic workers.
What rights do homeworkers have under the ?
Homeworkers are eligible for:
- minimum wage
- regular payment of wages
- wages are paid for a recurring pay period on a recurring pay day, and
- written wage statements are provided for each pay.
- written job details
- hours of work protections (i.e., maximum hours of work, and daily and weekly/biweekly rest periods)
- overtime pay
- vacation with pay
- public holidays
- pregnancy and parental leave
- personal emergency leave
- family caregiver leave
- family medical leave
- critical illness leave/li>
- organ donor leave
- reservist leave
- crime-related child disappearance leave
- child death leave
- domestic or sexual violence leave
- notice of termination
- notice of termination of assignment (applies to assignment employees of a temporary help agency)
- severance pay
- equal pay for equal work
Changes in the law that came into force on May 20, 2015 required all employers, including those employing homeworkers, to provide their current employees with a copy of the ministry’s Employment Standards Poster by June 19, 2015. Any homeworkers hired on or after May 20, 2015 must be provided with a copy of the poster within 30 days of the date of hire.
If an employee requests a copy of the poster in a language other than English and the ministry has published a version in that language, the employer must provide the translated version in addition to the English copy.
The poster is available in English, French and 10 other languages.
Note: there are rules about qualifying for some of the protections listed above.
For information please see Your Guide to the Employment Standards Act, 2000.
What is the minimum wage rate for homeworkers?
Minimum wage is the lowest hourly wage an employer can pay employees. There is a special minimum wage rate for homeworkers that is higher than the general minimum wage rate. A homeworker is entitled to a minimum wage rate of $15.40 per hour.
Full-time and part-time homeworkers are entitled to this rate. Students of any age who are employed as homeworkers must also be paid the homeworkers' minimum wage.
The table below sets out the general minimum wage and the homeworkers' minimum wage rates:
|Minimum Wage Rate||January 1, 2018|
|General Minimum Wage||$14 per hour|
|Homeworkers' Minimum Wage||$15.40 per hour|
If homeworkers are paid piece-work rate, how do they know whether they are receiving the equivalent of minimum wage?
The amount that a homeworker is paid must be at least equal to minimum wage. Homeworkers who are paid on a piece-work rate – a way of calculating pay that is based on the amount of work an employee completes, and not on the hours worked – can calculate whether they are being paid at least the minimum wage in the following way:
Take the total amount earned over the pay period and divide it by the number of hours worked in the same period for an average hourly rate. Compare that amount to the homeworkers' minimum wage rate in effect over that same pay period. (If overtime hours were worked, the calculation is more complicated.)
A homeworker received $240.75 as piece-work pay for the pay period January 2 to January 8, 2018 as payment for 25 hours of work in that pay period. The homeworker received the equivalent of $9.63 an hour in that pay period but the homeworkers’ minimum wage rate in effect from January 1, 2018 was $15.40.
Based on the homeworkers' minimum wage, the employee should have earned at least $385.00
Result: The employer must therefore pay an additional $144.25 to the employee ($385.00 minus $240.75).
Please see "What written job details must an employer give a homeworker?" (below) for information on the requirement that homeworkers' wage statements include the amount of the piece-work rate(s).
What written job details must an employer give a homeworker?
Certain requirements apply only to homeworkers. Employers must advise homeworkers in writing of:
- the type of work they are being employed to perform,
- the amount to be paid for an hour of work in a regular work week if the homeworker is to be paid by the number of hours worked,
- where the homeworker is to be paid by the number of articles or things manufactured:
- the amount to be paid for each article or thing manufactured in a regular work week
- the number of articles or things to be completed by a certain date or time if the employer requires a certain number to be completed by a certain date or time,
- an explanation of how pay will be determined when the homeworker is being paid on some other basis.
 "Manufacture" includes preparation, improvement, repair, alteration, assembly or completion.
Employers must keep detailed records of hours worked, wages and deductions. They must give all employees a written wage statement with each pay that shows the full details of the pay period.
The written wage statement must set out:
- the pay period for which the wages are being paid
- the wage rate, if there is one
- the gross amount of wages and, unless the employee is given the information in some other manner, such as in an employment contract, how the gross wages were calculated
- the amount and purpose of each deduction from the wages
- the net amount of wages.
What kind of information must employers keep?
Employers who employ homeworkers are required to keep a register containing the name, address and wage rate(s) of the homeworker. This must be kept for three years after the homeworker has stopped working for the employer.
In addition, all employers in Ontario, including anyone who employs homeworkers, must keep written records about each person they hire.
Employee records can be retained either by employers or by someone else on their behalf, but must be readily available for inspection. The period of retention varies depending on the information. For example, the employee's name, address and starting date must be retained for three years after the employee ceases to be employed by that employer. The number of hours the employee worked in each day and each week must be retained for three years after the day or week in question.
Each employee's written record must contain:
- the employee's name, address and starting date of employment
- the date of birth if the employee is a student under 18 years of age
- the times and hours worked by the employee each day and week (see Exception to the rule: hours of work records later in this fact sheet)
Note: It is suggested that employees also keep a record of the hours they work and number of items they complete each day.
- if the employee has two or more regular rates of pay, and the employee performed work for the employer in excess of the overtime threshold, the dates and times the employee worked in excess of the overtime threshold and the rate of pay for each overtime hour worked, must be recorded. These records must be kept for three years.
- information contained in the employee's wage statements
- all documents relating to pregnancy, parental, personal emergency, family caregiver, family medical, critical illness, child care, organ donor, reservist, or crime-related child death or disappearance, child death, domestic or sexual violence leave
- the employer must keep records of the vacation pay paid to the employee during the vacation entitlement year (or stub period, if any) and how that vacation pay was calculated. The employer must also keep records of the vacation pay earned by the employee during the vacation entitlement year and how the amount was calculated. These records must be kept for five years
- if a day is substituted for a public holiday, the employer must provide the employee with a written statement containing the public holiday which is being substituted, the date of the day that is substituted for the holiday, and the date on which the statement is provided to the employee. The employer must retain a record of the information contained on the statement for three years.
Note: An employee is entitled to information about his or her vacation time and pay entitlement once with respect to each completed vacation entitlement year or stub period, on written request to the employer. For more information please refer to the Vacation chapter of Your Guide to the Employment Standards Act, 2000.
Exception to the rule: hours of work records
If an employee receives a fixed salary for each pay period, and the salary doesn't change unless the employee works overtime, the employer is only required to record:
- the employee's hours in excess of those hours in the employee's regular work week, and
- the number of hours in excess of eight per day – or in excess of the hours in the employee's regular work day, if that's more than eight hours.
What if the employer does not follow the ?
If an employee thinks the employer is not complying with the , he or she can call the Employment Standards Information Centre at 416-326-7160 or toll free at 1-800-531-5551 for more information about the and how to file a complaint. Complaints are investigated by an employment standards officer who can, if necessary, make orders against an employer—including an order to comply with the . The ministry has a number of other options to enforce the , including requesting voluntary compliance, issuing an order to pay wages, an order to reinstate and/or compensate /or a notice of contravention, or issuing a ticket or otherwise prosecuting the employer under the Provincial Offences Act.
For more information or to file a claim
If you have questions about the , call the Ministry of Labour's Employment Standards Information Centre at 416-326-7160, toll free at 1-800-531-5551, or 1-866-567-8893. Information is available in multiple languages.
Information on the can also be found at the Employment Standards section of the Ministry of Labour's website.
To file a claim, you can access the Employment Standards claim form online.
To access the Employment Standards Act, 2000 visit the Ontario government e-Laws website.
Disclaimer: This resource has been prepared to help employees and employers understand some of the minimum rights and obligations established under the Employment Standards Act, 2000 () and regulations. It is not legal advice. It is not intended to replace the or regulations and reference should always be made to the official version of the legislation. Although we endeavor to ensure that the information in this resource is as current and accurate as possible, errors do occasionally occur. The provides minimum standards only. Some employees may have greater rights under an employment contract, collective agreement, the common law or other legislation. Employers and employees may wish to obtain legal advice.