Truck operators – operating under the Driver Inc. model, which means a driver is working as an employee under a corporation.

The Canada Revenue Agency (CRA) and Employment and Social Development Canada (ESDC) have clarified how they will treat drivers who incorporate themselves and operate company-owned vehicles, the so-called Driver Inc. model (PSB – Personal Service Business).

PSBs are: not entitled to income tax deductions available to other corporations; cannot deduct most expenses available to other corporations; are subject to a combined federal and provincial tax rate of 33%; amounts paid by one business for services provided by another business must be reported to CRA, but are not subject to statutory payroll deductions; and if the corporation pays salary and wages to one or more employees, these amounts are subject to withholding of income tax, CPP and in some cases EI.

Take away:

• Truck driver corporations are subject to 33% taxes (Federal and Provincial), which means no small business deductions available.
• No deduction available (Supplies, meals, etc)

For more details click here.