Seasonal Employees: Payroll Rules for Farms & Restaurants
Hiring seasonal workers? Learn the special EI rules, foreign worker requirements, and student exemptions for farms and restaurants.
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Key Takeaways
- Seasonal workers ARE employees - full payroll required
- EI rules have special provisions for seasonal industries
- Foreign worker programs (SAWP, TFWP) have specific requirements
- Students under 18 have different rules
- ROE required each time season ends
Seasonal Work Reality
Many Canadian businesses rely on seasonal workers:
- Farms during planting and harvest
- Restaurants during summer tourist season
- Christmas retail rush
- Construction in warm months
Seasonal doesn't mean "informal." These are employees with full payroll requirements.
Basic Seasonal Employee Payroll
What's Required
- TD1 form on first day of work
- Deduct income tax, CPP, EI from each pay
- Remit source deductions to CRA
- Issue T4 by end of February
- Issue ROE when season ends
- Workers' Compensation coverage
EI Rules for Seasonal Industries
Variable Best Weeks
EI calculates benefits based on "best weeks" of earnings. In seasonal regions:
- Number of weeks required varies by unemployment rate
- High unemployment = fewer weeks needed to qualify
- Benefits calculated on best 14-22 weeks (varies by region)
Returning Seasonal Workers
- Same worker returning = continuing employment relationship
- Issue new ROE if they don't return as expected
- Seniority and service may accumulate
Foreign Worker Programs
SAWP (Seasonal Agricultural Worker Program)
For farms bringing workers from Mexico/Caribbean:
- Work permits are employer-specific
- Must provide housing meeting standards
- Must pay prevailing wage rates
- Workers have full tax and payroll requirements
- Employer pays portion of airfare
- Maximum 8 months per year
TFWP (Temporary Foreign Worker Program)
For other temporary workers (restaurants, etc.):
- Requires Labour Market Impact Assessment (LMIA)
- Must prove no Canadians available
- Must pay median wage or higher
- Full payroll requirements apply
- Worker cannot work for other employers
Foreign Worker Tax Requirements
- Deduct income tax at rates based on country of residence
- Deduct CPP (unless exempt by treaty)
- Deduct EI (they're eligible for EI benefits)
- Issue T4 showing Canadian earnings
Student Workers
Students Under 18
- Subject to provincial child labour laws (hours, times, work types)
- No CPP deductions until age 18
- EI exempt if employing parent
- Still need TD1, still deduct income tax
Students 18+
- Full payroll requirements (same as any employee)
- CPP and EI deductions apply
- May claim tuition credit on their taxes
- Full-time students may have EI exemptions (check specifics)
ROE for Seasonal Workers
When Season Ends
- Issue ROE within 5 days of last pay period
- Use Code A (Shortage of Work) for seasonal end
- Include all insurable hours for the season
- Worker can apply for EI in off-season
Tip: If you're rehiring same workers next season, keep their TD1 on file. You don't need a new one unless their situation changed.
Seasonal Payroll Checklist
- Get TD1 from each seasonal worker on first day
- Verify work authorization for foreign workers
- Check age and apply youth worker rules if under 18
- Calculate and deduct proper tax/CPP/EI
- Register with Workers' Compensation
- Track hours carefully for EI purposes
- Issue ROE promptly when season ends
- Keep records for 6 years
Managing Seasonal Staff?
Tax Punjabi can handle your seasonal payroll complexities - including foreign worker requirements.
This article is for educational purposes only. Consult a professional for your specific situation.