Classification of Research Assistantships Held by Graduate Students
Research Assistantships (RAships) at Queen’s and most Canadian Universities primarily support graduate students financially, as they train to become researchers and to develop research skills that assist in qualifying them for advanced degrees. The practice at Queen’s has been to treat RAships as employment rather than as funding in support of research training toward fulfillment of degree requirements. This practice, in most instances, does not reflect the primary motivations of the professor (mentor) and the graduate student in respectively offering and accepting a research assistantship position. Typically, the RA position is offered to provide funding support to enable the student to pursue research directly linked to their graduate studies, and is accepted as financial assistance toward completing the degree requirements through acquisition of research training.
The majority of payments to Research Assistants from research grants awarded to a faculty member should be classified as Graduate Research Assistant Fellowships rather than employment income, which is compatible with the policies and ruling of the Canada Revenue Agency. This distinction acknowledges that the primary purpose of the RA position is to provide financial support to a graduate student in connection with their program of study, rather than paying them for a job.
(Re)Classification of a Research Assistantship (effective January 1, 2013)
New contracts starting on January 1, 2013 or later will distinguish between the two classifications of RA (see Table below) and will specifically recite facts to support the classification of the payment as being either Graduate Research Assistant Fellowship (T4A) or payment for work done by an employee (T4). The principal investigator (professor / supervisor) will be responsible to make this determination based on the criteria in Table 1.
Graduate students who currently hold an RA and will be continuing on an existing contract beyond January 1, 2013 and who meet the criteria for a Graduate Research Assistant Fellowship will be reclassified as of January 1, 2013. The professor/supervisor must identify individuals to be reclassified and inform Human Resources so that recipient records can be updated to accommodate the appropriate remuneration structure.
Table. Decision elements in determining whether a graduate student receives income in the form of a Graduate Research Assistant Fellowship (GRAF) or as employment as a Research Assistant (RA)
|Element||Graduate Research Assistant (GRAF)||Research Assistant (RA)|
|Primary reason of the faculty member for appointing the student||To assist his/her student financially; to contribute to a funding package to support the student in their graduate studies.||To perform duties that contribute to the faculty member’s own research and his/her academic and professional gain.|
|Primary reason for the student in accepting the appointment||Financial assistance to support the student in his/her completion of degree requirements through the acquisition of research training and skills||Financial gain|
|Nature of activities to be performed by the student||Research activities relate to the student’s own thesis or project though typically contributes to the faculty member’s research program as well. Tasks include those necessary to learn to become a researcher, part of a team and operate in a laboratory or research setting. At any given time, GRAs may be primarily involved in coursework.||Not directly related to the student’s own thesis, project or graduate studies. Tasks may relate to data acquisition, data entry, analysis, lab maintenance, literature search, record keeping etc. to assist the faculty member in his/her research.|
|Nature of the interactions between the faculty member and the student||Usually collaborative in nature; the faculty member is an academic mentor/supervisor to the student||Student takes direction and instruction from the faculty member in an employee/employer relationship|
|Degree of independence of the student||As much as is appropriate for the student’s level of training||Limited. Tasks and activities are set out by the faculty member and/or others with managerial responsibilities in the laboratory or research group.|
|Compliance with the School of Graduate Studies’ 10 hour/week guideline||No, the 10 hour guideline does not apply since the student’s activities associated with the appointment are directly related to his/her graduate studies||Yes, the 10 hour guideline applies since the work does not contribute to the student’s graduate degree requirements|
|Status of appointment||Student receiving a Graduate Research Assistant Fellowship||Employee|
i) T4A is issued; since it is treated as a fellowship related to the student’s enrolment in a qualifying graduate degree program, the income is fully exempt: Income Tax Act s. 56(3)(a).
ii) GRA income is exempt, reducing the likelihood that student’s will need their Tuition Tax Credit
iii) Income will not impact students’ RRSP deduction limit
i) T4 with source withholdings from each payment (federal income tax, provincial income tax, CPP, EI).
ii) To reduce income taxes, students may take into account tuition fees (Tuition Tax Credit)
iii) Employment earnings can alter student’s RRSP deduction limit
in the event of injury
Employment insurance (EI) claim
Canada PensionPlan (CPP)
The incident would be reported to the university’s liability insurance carrier
Income received in the form of a GRAF is not insurable earnings. An EI claim would be based on any accrued employment earnings (e.g.non-GRAF)
Income received in the form of a GRAF is not pensionable earnings. CPP credit would be based on any employment income (e.g. non-GRAF)
The incident would be reported to the Workplace Safety and Insurance Board
Benefit dependent upon total earnings and take into consideration other forms of income
Employment earnings contribute to CPP credit
Impact of change
Source withholdings of Canada Pension Plan (CPP) and Employment Insurance (EI) will be eliminated for graduate students with a research assistantship classified as a Graduate Research Assistant Fellowship (GRAF) resulting in a higher monthly income and lower taxable income (the GRAF income is exempt from taxation but should be reported, Income Tax Act s. 56(3)).
A student currently receiving employment income as an RA is entitled to the “Canada Employment Credit”, claimed once a year on the tax return. This credit is currently worth $164 for 2012 (indexed to inflation, so expected to be about $166 for 2013). If the RA is reclassified as a GRAF, the student should always be better off since there will be no tax at all on the GRAF income.
Every student's situation can be different due to many varying facts (e.g. other sources of income and expenses, other activities, changes in residence and marital status). Reclassification will be either beneficial or neutral to the vast majority of graduate students, the following are the possible negative effects in rare situations:
- Students receiving a Graduate Research Assistantship Fellowship will not be entitled to Employment Insurance (EI) benefits. We believe this is not a practical problem, because EI benefits are rarely available to students employed as research assistants for various reasons. (The conditions for EI eligibility can be found at www.servicecanada.gc.ca/ei ). EI benefits would be determined based on employment related earnings. For a student taking a maternity or parental leave, the School of Graduate Studies provides a $5,000 bursary to funding eligible doctoral students who take a one term (or longer) parental or maternity leave to have a baby or adopt a child.
- Students could have a small reduction in entitlement to Canada Pension Plan (CPP) benefits. This is not likely to be a practical problem, because students who remain in Canada will normally earn enough CPP credit over their lifetime to reach their maximum entitlement.
- Status with respect to the Workplace Safety and Insurance Board (WSIB) is not determined by tax status; the WSIB makes its own determination quite independent of the CRA's determination. In the event of an injury occurring on campus, the incident would be reported to our carrier (CURIE) and the University's liability insurance policy would respond
- A student currently receiving employment income as an RA is entitled to the "Canada Employment Credit", claimed once a year on the tax return. This credit is currently worth $164 for 2012 (indexed to inflation, so expected to be about $166 for 2013). If the RAship is reclassified to a GRAF, the fellowship income is fully exempt, the student should always be better off since there will be no tax at all on the RA payment (instead of tax on employment income with this small credit).
- RAs who receive income in the form a Graduate Research Assistant Fellowship are not employees, and therefore would not be entitled to 4% vacation pay. However, it is typically the case that this 4% is not currently paid "on top of" the agreed amount of pay, and therefore will not have an impact.
Research of Principal Investigator:
The associated deductions (CPP, EI and Ontario Health Tax (EHT)) will not be charged against the research grants from which the GRAF receives payment. Consequently grant monies may be directed toward other aspects directly linked to the research.