A salaried physiotherapist costs you the wage plus roughly 8 to 12 percent in payroll costs before any benefits. An associate on a percentage split carries none of that, but the way the split is worded can quietly add 13 percent HST to every clinic-share dollar. And whichever label the contract uses, CRA decides which arrangement you actually have.
Most clinic owners compare an associate and an employee on one number: the split percentage against the hourly wage. That comparison misses the costs that sit underneath each option, and those are the ones that decide which model actually wins for your clinic.
What an employee really costs in 2026
Say you hire a physiotherapist at $80,000 a year. The salary is only the start. As the employer you also pay:
CPP: you match the employee’s contribution at 5.95 percent of pensionable earnings up to $74,600, which is $4,230.45 at this salary. Earnings between $74,600 and $85,000 trigger the second CPP contribution at 4 percent, adding another $216 here.
EI: the employer pays 1.4 times the employee premium, which works out to $2.28 per $100 of insurable earnings up to $68,900. That is $1,572.30 for this hire.
Those mandatory pieces alone add about $6,019, roughly 7.5 percent on top of salary. Then come vacation pay of at least 4 percent, paid statutory holidays, sick days, workplace insurance premiums where they apply, and whatever benefits you offer. A realistic all-in load is 10 to 12 percent above the posted salary, and the cost runs whether the schedule is full or not.
What an associate really costs
An associate on a 60/40 split who bills $120,000 leaves $48,000 with the clinic, and your payroll cost is zero. No CPP match, no EI premiums, no vacation accrual, no termination liability. The cost model is variable: a slow month costs you nothing, which is why splits are so attractive for a second or third practitioner whose caseload is still building.
The trade is control and predictability. A busy associate on a generous split can take home more than the clinic keeps, and if the agreement is silent on charts and patient records, a departing associate may take the caseload with them. We cover that decision in more depth in our guide to hiring an associate versus an employee.
The HST trap hiding in the split
Physiotherapy treatment is exempt from HST, so owners assume the money moving between associate and clinic is exempt too. It is not that simple. CRA policy draws a line based on what the contract says the clinic share is actually for.
Genuine fee sharing
The parties share the fee for the exempt physiotherapy service itself. The split is an apportionment of an exempt fee, so no HST applies to either side of it.
An administrative fee
The contract says the clinic supplies the room, reception, and booking system to the associate for a percentage. That is a taxable supply of administrative services, and HST applies to the clinic’s share.
The sting is that neither side can usually recover that tax, because exempt practitioners cannot claim input tax credits. A split agreement worded the wrong way can turn 13 percent of every clinic-share dollar into a dead cost, and a clinic whose taxable administrative fees grow past the small-supplier threshold has a registration obligation it never saw coming. This is a drafting problem with a known fix, but it has to be fixed before CRA reads the agreement, not after.
CRA decides who is an employee
Calling someone an associate does not make them one. CRA looks at the working relationship: who controls the schedule, whose patients and charts they are, who carries the financial risk, and whether the practitioner could send someone else in their place. A physiotherapist who works your hours, on your equipment, under your clinic’s name, with no risk of loss, looks like an employee no matter what the contract says.
Getting it wrong is expensive. A reclassification means back CPP and EI, initially assessed against the clinic for both shares, plus penalties and interest, and it can open the door to vacation pay and termination claims under employment standards. It is one of the costlier surprises a growing clinic can meet.
Common questions
Is an associate always cheaper than an employee?
No. At low or unpredictable volumes the associate wins because your cost scales with billings. At consistently high volumes a salary can cap your cost while a percentage split keeps growing. The crossover point depends on your split, your wage market, and your room capacity, which is exactly the math worth running before you sign anything.
Does HST apply to the money the associate pays the clinic?
It depends entirely on how the agreement is structured. A true sharing of the exempt treatment fee attracts no HST. A percentage charged for facilities and administration is taxable, even though the physiotherapy itself is exempt.
Can the contract simply state the associate is an independent contractor?
The label helps show intent, but it does not decide the question. CRA weighs how the relationship works day to day, and a contract that contradicts reality will not protect the clinic in a review.
Weighing an associate agreement against a hire, or wondering what your current split is really costing you? Send us the details and we will run the numbers for your clinic.