Working from home doesn’t necessarily mean you’re self employed. It’s increasingly common for companies to hire remote workers, or to allow current employees the flexibility to work outside of a specific office space or regular schedule. While the terms seem similar, the difference in definition between a self-employed individual and a home-based employee means a lot at tax time.

Because it’s relevant for financial issues ranging from record keeping, to deductions, to eligibility for employment insurance and pensions, knowing your employment status is key in managing your money throughout the course of the fiscal year. Here are some key things to consider if you’re uncertain whether you’re an employee or an independent contractor.

Financial Risk

Working as an independent contractor — specifically, a sole proprietor — you accept a greater level of financial risk than an employee. As an employee, you are usually eligible for employment insurance. Your employer deducts a premium from each of your paycheques to put toward EI, which may be paid out to you in the event that you are unemployed for an extended period of time. Additionally, your employer chooses to terminate your contract, you should receive advanced notice and in many cases a monetary severance package.

Self-employed individuals, on the other hand, are usually ineligible for EI. When a long-term contract ends, your client is not required to offer any sort of severance payment. You may find yourself without income for some time if available work dries up, and the onus is on you to set aside money to prepare for these potential periods of unemployment. With self employment also comes personal liability. Any business-related debt that you incur can be claimed against your personal possessions.

Do You Provide Your Own Supplies?

One of the biggest differences between a freelancer and an employee is whether or not you provide your own supplies. This means supplies beyond the physical space in which you work — since you’re working from home either way, your rent can still be claimed.

For example, imagine that the work you provide comes mainly in the form of word processing. Are you using your own laptop? Are you responsible for paying renewal fees on software or website subscriptions? Do you purchase your own printer ink and paper when you need to print a document? The more money you personally spend on office and work supplies, the more likely it is that you are self employed.

Level of Control

How much control do you have over the work you do? It can be tough to determine your employment status based on level of control alone, as certain jobs afford more independence than others. In general, if you’re an employee you have less control over your own work than if you are a contractor. As an employee, you may be required to provide your employer with frequent drafts, updates and progress reports as you work on a project. Your employer may stipulate exactly what steps you should take in the process of completing a task.

As an independent contractor, you have the freedom to decide how much of your process the client gets to see. You might send your client frequent drafts and updates, or you might only send the occasional email between the initial contract agreement and the final deliverables. Independent contractors are also free to hire their own workers and delegate tasks.

Working from home certainly affords more freedom than working in an office. However, with more freedom comes more responsibility. Ensure you’re clear about your employment status before you begin working so you know just how much responsibility you’ll have to shoulder.