Tips on switching from employee to contractor?

[BerserkerCatSplat]

So the EPC company I work for has decreed that all employees are to convert themselves to independent contractors by the end of the month in an effort to reduce overhead costs as mandated by the new hedge fund ownership.

Obvious red flags for company longevity aside, has anyone here gone through this type of change and has any tips or pitfalls to avoid? Obviously I'll need to set up the usual numbered corporation but things like determining rates, tax structure, contract scope and whatnot are entirely foreign to me. APEGA has a few guidance docs that I'm digesting but they're nearly 20 years old.

[ExtraSlow]

Personal service business. Don't be one. Get a second customer asap.

[suntan]

lol nice. Did they pay you severance? They can't just make you contractors.

[ExtraSlow]

Tell then to lay you off and collect EI.

[BerserkerCatSplat]

Personal service business. Don't be one. Get a second customer asap.

Good advice in case I stay on long term, for sure. That's up in the air but have to roll with it for now.



lol nice. Did they pay you severance? They can't just make you contractors.

I'm sure they will attempt to do less than whatever the legal minimum is unless forced to somehow.



Tell then to lay you off and collect EI.

Certainly has crossed my mind but I hate being on EI, or unemployed for that matter.

[Nufy]

Have they stated a starting rate ?

For me I took my hourly salary and doubled it for my starting rate / hr.

Whats the remittance schedule. Some places I worked was every 2 weeks. Some monthly.

One fucker didn't pay for 4 months...That was a bit tight...

Assuming you want to stay there...

As well...

Account for Corp set-up
GST number
Payroll Taxes etc...
Health Coverage (if the wife doesnt have any)

An accountant can walk you through most of this if you are not familiar with the process.

[Buster]

the tax man cometh.

[BerserkerCatSplat]

Have they stated a starting rate ?

For me I took my hourly salary and doubled it for my starting rate / hr.

Whats the remittance schedule. Some places I worked was every 2 weeks. Some monthly.

One fucker didn't pay for 4 months...That was a bit tight...

Assuming you want to stay there...

As well...

Account for Corp set-up
GST number
Payroll Taxes etc...
Health Coverage (if the wife doesnt have any)

An accountant can walk you through most of this if you are not familiar with the process.

No info given as of yet, apart from a lengthy diatribe about how rates will be based on whatever clients are willing to pay as they can't afford to lose money on contracts. Rumour is they will be offering 26% above employee wage.

I've booked a sit-down with an accountant, so that should help.




the tax man cometh.

It's inevitable.

[killramos]

It just sounds like they are laying you off to me

Start your own EPC with your existing clients and cut out the middle man.

[ExtraSlow]

I'm serious about a second customer. You need one. 5 hours a month is fine, but you need it.

- - - Updated - - -

In an ideal world, contracting rate is between 40 and 100% higher than employee hourly wage.

You are going to be offered less than that, I already know.

[killramos]

I'm serious about a second customer. You need one. 5 hours a month is fine, but you need it.

- - - Updated - - -

In an ideal world, contracting rate is between 40 and 100% higher than employee hourly wage.

You are going to be offered less than that, I already know.

I would guess he’s going to be offered less than 100% of his current wage

[BerserkerCatSplat]

It just sounds like they are laying you off to me

Start your own EPC with your existing clients and cut out the middle man.

Does seem that way, but it's more specifically like the company's only major project and source of income is about to start wrapping up so they are making it easier to shed staff. Likely a matter of when not if unless they suddenly find more work.



I'm serious about a second customer. You need one. 5 hours a month is fine, but you need it.

In an ideal world, contracting rate is between 40 and 100% higher than employee hourly wage.

You are going to be offered less than that, I already know.

True on all fronts, as mentioned the scuttlebutt is 26%. Taking the EI starting to look better by the minute.

[thinmyster]

I am a O&G contractor. Find a good accountant now.

[Hallowed_point]

Yeah, don't do it. Not worth the hassle and stress imo dealing with the CRA.

[ThePenIsMightier]

Did up a thread I think I started maybe a year ago about how to calculate or quantify the delta between an employee with benefits and a contractor.

[BerserkerCatSplat]

Did up a thread I think I started maybe a year ago about how to calculate or quantify the delta between an employee with benefits and a contractor.

Was just reading it, thanks to the Similar Threads feature!

[Buster]

I'm serious about a second customer. You need one. 5 hours a month is fine, but you need it.

- - - Updated - - -

In an ideal world, contracting rate is between 40 and 100% higher than employee hourly wage.

You are going to be offered less than that, I already know.

Even then.. Probably will get dinged for being a psb. Cra are gangsters like that

[suntan]

Absolutely do not agree to convert without getting severance. They are estimated laying you off.

[killramos]

I am dead serious about starting your own EPC and taking the clients. It’s the natural way of these things.

Just make them lay you off first.

[ThePenIsMightier]

Was just reading it, thanks to the Similar Threads feature!

Oh, LoL! I see that now. *I meant to say "dig".

At any rate, that was a friend of mine and I believe she did the reverse. I think she went from $85/hr Contractor with zero benefits and no holidays etc, down to only $67/hr Employee plus a shit pile of benefits. I think she said it was a fairly clean transition, like she didn't really notice being "poor" with the lower salary.
LoL maybe that's already in that thread and I should review!

[dirtsniffer]

on top of everything else, how does this impact liability and permit to practice?

[BerserkerCatSplat]

I am dead serious about starting your own EPC and taking the clients. It’s the natural way of these things.

Just make them lay you off first.

Haha, "clients". Your advice is absolutely sound, unfortunately this outfit has effectively only had one single client for the past ~5 years, so I have precisely zero leverage to poach any clients because they don't exist. I would have left a couple of years ago if it wasn't for getting some outstanding mentorship from one of the senior engineers in a particular niche I'm interested in - but I'm just not experienced enough in that field to strike out on my own yet.

[ThePenIsMightier]

Is this Energy sector EPC? Or niche tech in Energy sector EPC?
In a way it sounds like something someone massive like Fluor would do, but it also sounds like someone small <40 people with poor diversification would do.

[ExtraSlow]

If anyone knows a junior mechanical drafter with low self esteem and medium or higher ability to ignore a disrespectful workplace, please pm me.
Actually same for an electronics tech or assembler.

[ThePenIsMightier]

If anyone knows a junior mechanical drafter with low self esteem and medium or higher ability to ignore a disrespectful workplace, please pm me.
Actually same for an electronics tech or assembler.

Mechanical drafter, or PIPING Drafter?

[ExtraSlow]

Mechanical. Piping sounds like facilities, and I'm allergic to facilities, just ask vengies boss.

[killramos]

I can only assume drafting has something to do with beer.

[BerserkerCatSplat]

Is this Energy sector EPC? Or niche tech in Energy sector EPC?
In a way it sounds like something someone massive like Fluor would do, but it also sounds like someone small <40 people with poor diversification would do.

Energy sector EPC of relatively narrow scope but not exactly "niche", small outfit <100 heads.

Sorry for being vague. I really do appreciate the input everyone's given.

[darthVWader]

100% talk to an employment lawyer. You could/should be in line for a good severance and not the BS 2 weeks a year they try to make you think they owe you.

[msommers]

I am a O&G contractor. Find a good accountant now.

1000% this. I imagine rates have gone up since I needed one but for incorporated accounts, I think it was ~$2,500/yr.

[Nufy]

YMMV but I operated with one client only for 7-8 years straight.

Only 1 of my 13 year history did I have 3 clients.

My accountant wasn't worried nor was I flagged by CRA.

Imo...it depends on how you set up your company and pay yourself.

I was an employee of my company and paid myself monthly and did payroll remittances monthly.

Quarterly GST and Corp taxes as requested by CRA.

As has been noted...If you do this get an accountant. I can send you the contact info for mine if you like. PM me.

[Buster]

YMMV but I operated with one client only for 7-8 years straight.

Only 1 of my 13 year history did I have 3 clients.

My accountant wasn't worried nor was I flagged by CRA.

Imo...it depends on how you set up your company and pay yourself.

I was an employee of my company and paid myself monthly and did payroll remittances monthly.

Quarterly GST and Corp taxes as requested by CRA.

As has been noted...If you do this get an accountant. I can send you the contact info for mine if you like. PM me.

you got lucky

[bjstare]

you've been lucky so far

ftfy

Just because an audit hasn't happened yet doesn't mean it never will.

[Nufy]

Fair enough.

I hear the stories of people getting audited but it's usually guys who only pay themselves with dividends to avoid taxes or something similar.

I do not personally know anyone who has been audited for that purpose.

[Buster]

Fair enough.

I hear the stories of people getting audited but it's usually guys who only pay themselves with dividends to avoid taxes or something similar.

I do not personally know anyone who has been audited for that purpose.

thats not the risk. The risk is being turned into a PSB. Now, if you flowed through all of your cash then your risk is much lower.

[ThePenIsMightier]

Sorry, what's a PSB and the issue with it?

My understanding was that calling yourself a Contractor and then only working for one client put you and your client at risk of CRA saying "bullshit - you're just an employee trying to dodge taxes and your employer owes you a severance when they stop using you. Here's your enormous tax bills and penalty/interest fees."
As long as you're actually a contractor with >1 clients, this risk should be mitigated.

Are we talking about the same thing?

[msommers]

Personal service business, which is basically what you described. According to my accountant back in the day, it was A LOT of IT contractors who clearly were employees: they worked for one client, they had an office and used company equipment, company parking, the works.

They'd pay themself basically minimum wage, write-off as much as you can imagine, and it sounded like the biggest issue was actually the CRA not getting their EI payments and proper CPP amounts.

At one point some PSBs tried to use family as employees, get your wife to be the 'bookkeeper' at $50/hr for 10 hours a week.

But hey, if the system lets you do it why not. That said audits are fucking terrible, so hedge accordingly.

[suntan]

As a small business you can use the small business income tax rate. Yippee. And it's on profit.

[Buster]

Sorry, what's a PSB and the issue with it?

My understanding was that calling yourself a Contractor and then only working for one client put you and your client at risk of CRA saying "bullshit - you're just an employee trying to dodge taxes and your employer owes you a severance when they stop using you. Here's your enormous tax bills and penalty/interest fees."
As long as you're actually a contractor with >1 clients, this risk should be mitigated.

Are we talking about the same thing?

the PSB thing is crazy. There are a bunch of "tests" to determine if you are, and its a bit discretionary

[JPB]

on top of everything else, how does this impact liability and permit to practice?

Don't sleep on this, liability insurance is a few thousand a year and I'm currently paying one year of extended reporting liability after wrapping up my company and going back to staff. With no ongoing revenue this needs to be accounted for in your rate.

Also factor in phone, laptop, other IT costs. Internet costs. WCB. Both sides of CPP unless you are paying yourself as dividends. Utilization - if you aren't being guaranteed enough hours you need to account for enough income to get you through the slack times. I built up a spreadsheet to add all these things in and it gives me a range for my contract rate. Mine is about 50% over staff rate, but it can go higher for stuff that needs extra software or if the client looks like a pain in the ass.

Your employer is being super greasy moving everyone to contract and gut feel is they are walking a really fine line with CRA with this approach. Their overheads are going down big time, don't let them offload it all on you by low-balling you. Lots of guys get away with a single client and avoid the PSB thing, I am too paranoid so I was always hustling for bits and pieces from a bunch of EPCs. During the lean times my motto was three part time jobs makes a full time job.

[Hallowed_point]

Don't sleep on this, liability insurance is a few thousand a year and I'm currently paying one year of extended reporting liability after wrapping up my company and going back to staff. With no ongoing revenue this needs to be accounted for in your rate.

Also factor in phone, laptop, other IT costs. Internet costs. WCB. Both sides of CPP unless you are paying yourself as dividends. Utilization - if you aren't being guaranteed enough hours you need to account for enough income to get you through the slack times. I built up a spreadsheet to add all these things in and it gives me a range for my contract rate. Mine is about 50% over staff rate, but it can go higher for stuff that needs extra software or if the client looks like a pain in the ass.

Your employer is being super greasy moving everyone to contract and gut feel is they are walking a really fine line with CRA with this approach. Their overheads are going down big time, don't let them offload it all on you by low-balling you. Lots of guys get away with a single client and avoid the PSB thing, I am too paranoid so I was always hustling for bits and pieces from a bunch of EPCs. During the lean times my motto was three part time jobs makes a full time job.

:thumbsup: Bindar Dundat in my past life. Double CPP, WCB, liability insurance etc etc etc , accounting $, worrying about CRA declaring you as an employee vs a contractor. Just don't do it. Let them fire you and pay severance or whatever you need to do. Otherwise you are gonna get screwed in the short or long term, mark my words.

[ThePenIsMightier]

...

Your employer is being super greasy moving everyone to contract and gut feel is they are walking a really fine line with CRA with this approach....

They're not playing the long game. They're simply positioning for massive layoffs with no severance or time-in-lieu in the very near term.
HR people are often attractive, but rarely smart. This isn't going to end well. It's not a good strategy.

But then again, neither was carrying all the eggs in one basket by having one giant client and no other sustaining work.

[msommers]

:thumbsup: Bindar Dundat in my past life. Double CPP, WCB, liability insurance etc etc etc , accounting $, worrying about CRA declaring you as an employee vs a contractor. Just don't do it. Let them fire you and pay severance or whatever you need to do. Otherwise you are gonna get screwed in the short or long term, mark my words.

While there are a lot of factors to consider, there are a lot of contracting engineers who are successful and not pulling their hair out all day.

[Hallowed_point]

While there are a lot of factors to consider, there are a lot of contracting engineers who are successful and not pulling their hair out all day. Engineers with how many clients? I stand by my statement. Plus CRA can backtrack and make your life interesting years later. Just say no is a safer bet.

[statick]

As someone that deals with the CRA on behalf of others on a regular basis, I will echo all of the advice on being cautious about PSB status. There’s lots of good material online, but here is one of the better resources…
https://www.taxtips.ca/glossary/personal-services-business.htm

And yes, I’m aware that everyone (and their dog) in this province has operated in such a fashion for decades, but the CRA has recently launched a project to crack down on these. They have already started sending out “education letters” to suspected PSBs. In respect of full transparency, not all projects that get started by the CRA are seen through to the end (at least in their originally intended form), but this is a relatively low-hanging fruit, if you ask me.

[schurchill39]

OP, there are lots of things to consider that others have given good advice here about getting severance and making sure you aren't being considered a PSB. If you want a simple company setup I would recommend TIMPRO to get the corporation as they are ~$600 or so and easy to deal with. If you're looking to branch out to a bunch of different things or have family members as directors etc then I would recommend seeing a lawyer for ~$1300-$1500. Above all, get a good accountant! Preferably one that works with people in your line of work so they know the ins and outs of it.


on top of everything else, how does this impact liability and permit to practice?

If you want to follow APPEGA by-the-book then you will need to get your own Permit to Practice as soon as you flip over to a contractor regardless if the company you are doing work for or not is stamping it because you're an engineering preparing a technical document. I have yet to hear of anyone actually being investigated or fined for it but those are technically the rules. That being said, I think I am the only person I know who actually has my own Permit to Practice for my corp but I have both my wife and I under the company plus I actively try to find small projects outside of O&G. Everybody just "doesn't take responsibility for it as its reviewed and signed off of by an employee of the company" which isn't technically kosher but everyone does it.

Also, don't forget you will need to get your own O&E and general liability insurance now. Most companies have their own parameters of what you need, but you will want to make sure you are protected. Getting my insurance was easy, getting insurance to also cover my wife because she deals with aspects of the environment was a fucking nightmare.


While there are a lot of factors to consider, there are a lot of contracting engineers who are successful and not pulling their hair out all day.

My company runs most operations focused engineers as contractors and they love it. I know a few of them who have been offered employee but have turned it down. The rate is good, the write offs are great, and once you're in a groove with your taxes its pretty painless. I would prefer to stay as a contractor myself but with a family switching over to an employee when the opportunity presents itself is probably the smart move.

[ExtraSlow]

Corrects me if I'm wrong, but your work is "real engineering" that "creates and oversees plans, procedures and drawings" and as such, you really do need O&E, which is a major expense. I can't speak to the requirement for your own permit to practice, but wouldn't surprise me at all if you needed your own.
Sounds like a nightmare to me.

[schurchill39]

Corrects me if I'm wrong, but your work is "real engineering" that "creates and oversees plans, procedures and drawings" and as such, you really do need O&E, which is a major expense. I can't speak to the requirement for your own permit to practice, but wouldn't surprise me at all if you needed your own.
Sounds like a nightmare to me.

O&E is a huge expense. Definitely shop around for it and be as specific as you can for all of the stupid questionnaires they will make you fill out. I got quotes for general liability + O&E from $4,000-$11,000 for two of us per year. It got cheaper the more specific I was and the more follow up questions I answered for them to really understand what kind of work we do. If you're able to fall under any of their standard "templates" of work type you could be looking at as little as $2500/year but could be much much more depending on the risk level - especially if you say you have anything at all to do with pipe lines.

[Ntense_SpecV]

This may not be the most prestigious insurance company for E&O, but for commercial corp. general liability and the ability for non professionals to attain insurance without spending a fortune, it's been fantastic for me.
I was provided this insurance company when working at an EPC as they are a contractor EPC shop only and many new hires have never been a contractor before, so they walked people through the processes on having to attain insurance easily.

https://www.ajg.com/ca/

*Note - I've never had to make a claim and have no guarantee's as to the payout or claims process with them*

[rage2]

Kinda off topic, or maybe not. I'm sure some of you have some level of tax expertise.

Have a friend immigrating here from India. She's working for a US company as a contractor in India. She's moving to Calgary next month and continue to be working as a contractor. Company is in US with no offices in Canada so she can't be an employee. Would she still be considered a PSB or does she go through the route of incorporating? What other implications are there that she's dealing with a US company in the eyes of CRA and maybe even IRS?

I'm sending her off to experts to deal with it, but just trying to gauge if this situation is a shit show and if she should just try and find a regular job instead.

[suntan]

Unless she's making CAD$150K/annum this will suck for her.

[statick]

Kinda off topic, or maybe not. I'm sure some of you have some level of tax expertise.

Have a friend immigrating here from India. She's working for a US company as a contractor in India. She's moving to Calgary next month and continue to be working as a contractor. Company is in US with no offices in Canada so she can't be an employee. Would she still be considered a PSB or does she go through the route of incorporating? What other implications are there that she's dealing with a US company in the eyes of CRA and maybe even IRS?

I'm sending her off to experts to deal with it, but just trying to gauge if this situation is a shit show and if she should just try and find a regular job instead.

If she were to be incorporated, she would most likely be considered a PSB. From a tax compliance perspective, the easy solution to this is to simply carry on as a self-employed individual contractor (sole-proprietor). The only major downside to this is her losing the legal/liability “protection” of a corporation… if anyone’s curious about how much this actually plays a role, a discussion with a practicing lawyer in the area would be a good idea. Here in Canada, it’s considerably less than most assume. I know a lot of larger companies hiring the contractors prefer to see a corporation over a sole-proprietorship (if any industry folk can explain why, please do), but I know that at least a few of them out there will accept sole-proprietorships.

Despite what most folks think, the actual tax-deductions (please insert Schitt’s Creek clip) available to a Sole-Proprietor and corporation are essentially the same. There are a few specific tax-related advantages to a corporation, but they’re not black & white, and can be very situation/client dependent. Either way, unless her revenue stream is exempt under the ETA, once annual revenue exceeds $30K, she’ll probably need to get a GST number (if she’s maintaining that she is actively pursuing Canadian GST-able clients.)

With the above situations, she wouldn’t have US-nexus, so her client shouldn’t be withholding any tax from her when paying her invoices. This means that she shouldn’t need to file anything in the US. If she were employed by a US company, she likely would need to file a US return.

[ThePenIsMightier]

There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.
There is no limit to personal liability for a sole proprietor.

[ExtraSlow]

Sole prop can't hold cash in the company either, which sometimes is handy. Maybe not in this case.

[Buster]

Sole prop can't hold cash in the company either, which sometimes is handy. Maybe not in this case.

It's not advantageous for a psb to either, really.

[ExtraSlow]

If the flow into the company is uneven or uncertain it can be.

[Buster]

If the flow into the company is uneven or uncertain it can be.

how so?

[Nufy]

When you have periods where you aren’t working. You can still draw a paycheque.

I did on a few occasions over the years.

[ExtraSlow]

NOw keep in mind I have never had a successful corp or sole prop.
But, it's my understanding that it can be helpful in the following situation:
- You earn a high amount for part of the year, and have seasonal layoffs or slow periods - in "normal" years that averages out
- If you have a special busy year and don't have a slow time for one year, your company earnings will be abnormally high.
- In a sole prop, your personal earnings will be identical. In a corp, you can choose to "smooth out" your personal earnings over periods where you may have low or no earnings.

I know a drilling consultant who does this, helps with personal financial planning, and has covered his ass during the oilpatch downturns.

Does that make sense?

[rage2]

She does marketing. She’s basically a remote employee year round. The company she works for has zero Canadian presence hence the contract route (that’s what everyone else outside us does). Shouldn’t have any liability issues.

If she can get away with sole proprietorship that’s the best path. I doubt the tax advantages are there. I was more curious if US somehow wants a slice of the pie here.

[Buster]

NOw keep in mind I have never had a successful corp or sole prop.
But, it's my understanding that it can be helpful in the following situation:
- You earn a high amount for part of the year, and have seasonal layoffs or slow periods - in "normal" years that averages out
- If you have a special busy year and don't have a slow time for one year, your company earnings will be abnormally high.
- In a sole prop, your personal earnings will be identical. In a corp, you can choose to "smooth out" your personal earnings over periods where you may have low or no earnings.

I know a drilling consultant who does this, helps with personal financial planning, and has covered his ass during the oilpatch downturns.

Does that make sense?

if you are a psb, they effectively tax you so that your earnings are personal, so whether you keep it corporate or not doesn't help the tax status.

[kertejud2]

She does marketing. She’s basically a remote employee year round. The company she works for has zero Canadian presence hence the contract route (that’s what everyone else outside us does). Shouldn’t have any liability issues.

If she can get away with sole proprietorship that’s the best path. I doubt the tax advantages are there. I was more curious if US somehow wants a slice of the pie here.

The US will take a slice by default if she doesn't fill out the form that exempts her from withholding tax. And that's a relatively straight forward process once the incorporate-or-not situation is decide.

[msommers]

Relevant.

https://turbotax.intuit.ca/tips/5-tax-rules-to-know-about-working-remotely-14744#:~:text=3.-,What%20if%20I%20live%20in%20Canada%20and%20work%20remotely%20for,work%20or%20full%2Dtime%20employment.

[suntan]

Just have to make sure the employer fills out the relevant forms otherwise good chance US will apply withholding tax. Good luck getting that back ever.

[rage2]

The US will take a slice by default if she doesn't fill out the form that exempts her from withholding tax. And that's a relatively straight forward process once the incorporate-or-not situation is decide.
But US company isn’t employing her. To them she’s a foreign contractor.

[suntan]

But US company isn’t employing her. To them she’s a foreign contractor.

Doesn't matter. By default, they will demand the withholding tax.

Ask me how I know.

[ExtraSlow]

if you are a psb, they effectively tax you so that your earnings are personal, so whether you keep it corporate or not doesn't help the tax status.
yes. I agree with that.

[statick]

But US company isn’t employing her. To them she’s a foreign contractor.

Indeed, if she is an employee, there will certainly be source withholdings. If she's a foreign contractor, whether or not a W-8BEN form needs to be completed really depends on how the US employer/client is handling things on their end. I've seen more instances where the US party did withhold than not, but there are many instances where the US party sees the Canadian service provider as a vendor to whom withholding taxes won't apply.

If taxes are withheld at source, it's a fairly straightforward process to avoid the scenario of double-taxation... Personal tax filings will need to be made on both sides of the border, and through foreign tax credits, the net result will be paying tax in the higher of the two jurisdictions (typically Alberta, but California is an example of the converse). In such a situation, the taxpayer would be "pre-paying" the tax to both authorities and then be getting a refund from some blend of one or both of them.

[suntan]

Yeah it seems completely random. Once in a while we'll get a notice from the IRS asking us to pay withholding tax for income from a US client.

Despite us filling out the proper forms, they'll be like "we can't find them". No fuckface, that's on you.

They're so fucking disorganized down there.

[Maxx Mazda]

She does marketing. She’s basically a remote employee year round. The company she works for has zero Canadian presence hence the contract route (that’s what everyone else outside us does). Shouldn’t have any liability issues.

If she can get away with sole proprietorship that’s the best path. I doubt the tax advantages are there. I was more curious if US somehow wants a slice of the pie here.

So on what basis is she immigrating to Canada?

[suntan]

So on what basis is she immigrating to Canada?

She's sworn to vote Liberal.

[rage2]

So on what basis is she immigrating to Canada?
Her husband works for us. They’re relocating to Calgary.

[Neil4Speed]

Indeed, if she is an employee, there will certainly be source withholdings. If she's a foreign contractor, whether or not a W-8BEN form needs to be completed really depends on how the US employer/client is handling things on their end. I've seen more instances where the US party did withhold than not, but there are many instances where the US party sees the Canadian service provider as a vendor to whom withholding taxes won't apply.

If taxes are withheld at source, it's a fairly straightforward process to avoid the scenario of double-taxation... Personal tax filings will need to be made on both sides of the border, and through foreign tax credits, the net result will be paying tax in the higher of the two jurisdictions (typically Alberta, but California is an example of the converse). In such a situation, the taxpayer would be "pre-paying" the tax to both authorities and then be getting a refund from some blend of one or both of them.

Listen to this man.