Hypothetical question here.
In Canada - Lets say you own a business. Can you simply list someone on the payroll as an employee (like a family member or something) and just pay them for free without working? Are there any legal or negative financial problems from doing this?
Yeah, I'm sure OP could hire that person for like 2k/hr, and then meet up for coffee every week or two to discuss "business". As long as the government gets their share and everyone declares their taxes and accounting and stuff, I don't see why there would be much of a problem. There's useless employees at all sorts of businesses.
If you run a business (either personally or through a company that you control) then there's nothing to stop you giving money to whoever you want. The only real exception would be if your company is insolvent, and you're giving all the money to a relative so that there's nothing left to pay your creditors.
Aside from that, it's perfectly legal for your business to pay money to someone who doesn't actually do any work. However, it is likely to have some unfavourable tax consequences. You won't be able to claim the payment as a tax deduction for the business, and it's likely to be taxable as income in the hands of your relative.
There is nothing wrong with doing this and all bussiness owners do this op. My dad was "paying" me 80k a year when i was 16. The government doesnt rly care how small bussiness move money because they get taxes either way if you wanna. If you wanna skirt several grand around tax brackets they wont give you any shit.They leave the system kinda open like this to encourage and allow small bussinesses to grow.
You have to pay the government ei and cpp as does the employee. If you hire them as a contractor your portion as the employer does not have to be paid I believe, but they still have to pay their portion. I'm not 100% sure so double check. Cover your ass, if you get audited you'll be fucked.