IT Contract Work

[firebane]

Hoping maybe to have some insight into the whole process behind IT contract work. As I was laid off a few weeks ago and the hunt for work again I've had a few people contact me about contract work, but they say that in order for me to get the wages I want that I would have to be self-employed or set up a sole proprietorship.

As I've always worked for someone and always received a pay cheque in my bank account every two weeks this is foreign to me. What are some pros/cons of doing this that you guys have ran into? Is this more a giant pain in the arse than anything?

Feedback would be appreciated as I want to ensure I'm doing the right choice for my career.

[adam c]

What kind of IT Contract work? are you a generalist or specialized? Calgary right now is fairly saturated IT wise, I know of people out of work for 2 years now. The market is being taken over by MSP's and internal or contract work is getting harder to find

[firebane]

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What kind of IT Contract work? are you a generalist or specialized? Calgary right now is fairly saturated IT wise, I know of people out of work for 2 years now. The market is being taken over by MSP's and internal or contract work is getting harder to find

Generalist. I have a large background with technical issues but have a plethora of skills just not in a corporate environment.

Current offer is for a technical role with a large bank for 1 year but requires you to be sole

[carson blocks]

If the money is right and you have nothing better to do, give it a shot. Sole proprietor is nothing to set up. Even a corp is just a few hundred bucks to make someone else do all the work.

[adam c]

I don't know the details but if you're out of work and this is the only thing available and you NEED something then I would start the process to become a sole proprietor, with IT if this is something you can see yourself pursuing further then look into LLC or Incorporating, make sure you carry some sort of business insurance though

[ExtraSlow]

One trip to the registry and one call to tool peete or state farm and you are done. This is no big deal. If they are giving you a whole year of work, no reason not to.

[firebane]

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One trip to the registry and one call to tool peete or state farm and you are done. This is no big deal. If they are giving you a whole year of work, no reason not to.

I assume state farm for the business insurance? Is this something necessary? What does it provide?

[adam c]

If you're a SP and you fuck something up, the company can sue you directly, business insurance will help mitigate loses, just like home or car insurance protects you in the event something happens

[firebane]

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If you're a SP and you fuck something up, the company can sue you directly, business insurance will help mitigate loses, just like home or car insurance protects you in the event something happens

Makes sense.

How much are people paying for business insurance? I am just looking for a general number.

[Anomaly]

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Hoping maybe to have some insight into the whole process behind IT contract work. As I was laid off a few weeks ago and the hunt for work again I've had a few people contact me about contract work, but they say that in order for me to get the wages I want that I would have to be self-employed or set up a sole proprietorship.

I was in a similar situation a year and a half ago, I took a 1 year contract and had to get incorporated. Cost ~$500 to get incorporated, and I used an accountant for the first year ($2400) since I'd never done contract before. It's a bit of pain in the beginning getting incorporated, getting a GST #, opening a business bank account but it only takes a day or two of getting all that annoying stuff sorted then it's not really much different. I found I needed to be more disciplined financially, putting aside money for deductions, and keeping track of receipts so you don't get yourself in trouble come year end. The upside being you will typically pay less tax and you can write off some of your expenses.

When I was looking, there were a lot of short term contracts (3-6 months) and some of the rates were quite low for contract. I don't think it's worth incorporating for a short term contract (imo), and if you do decide to go that route, make sure the pay is fair since your costs\risk will be higher.

[suntan]

Go the SP route for now. Get E&O insurance if you want. And being incorporated doesn't mean you don't get E&O insurance.

[carson blocks]

Traditional insurance brokers wanted an arm and a leg for E&O. Talk to LMS prolink about their insurance for APCC members. The APCC membership and the E&O insurance combined was just a few hundred IIRC, which was about 1/10 of a traditional broker quote. No idea if the insurance was any good for claims etc, but it met my contractual requirement to be insured. Some links to get you started:

http://www.prolink.insure/apcc/
https://www.apcconline.com/

[Zhariak]

State Farm has O&E for decent price... I do my biz insurance, as well as equipment insurance with them...

[eblend]

I did this for about a year and a half. Quit a full time government job to get into another company I wanted to work in, but only way in was to be a contactor and incorporated. Insurance was a requirement and hr would check it.. Or so they said.. I never got it and never got checked for the time I was a contractor. A year and a half later was offered full time which I accepted and have been there and loving it ever since. You get a license, login online and get your gst and other registrations. The sign up for something like quickbooks online, link your business bank accounts, and categorize expenses as they show up. With quickbooks you make your invoices to give to your client every month, they pay you, and that's your business income. Since this sounds temporary, just pay urself a dividend, much easier than doing payroll and crap for yourself. I used to just transfer funds to myself every couple of month. Have to remember that all you make isn't all you keep.. You have to pay corporate taxes on that money.. And dividend tax on the dividend you give yourself, you issue yourself a t5 at the end of the year, and when you fill in your personal taxes you owe them money.

On phone and in Orlando right now so don't want to write much more now, so if you got any questions let me know. I did all my own accounting, corporate taxes, everything, it really isn't too hard if you don't mind learning a little, I actually enjoyed doing it myself, or you could pay a couple grand to an accountant to put numbers into boxes, really up to you.

[firebane]

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I did this for about a year and a half. Quit a full time government job to get into another company I wanted to work in, but only way in was to be a contactor and incorporated. Insurance was a requirement and hr would check it.. Or so they said.. I never got it and never got checked for the time I was a contractor. A year and a half later was offered full time which I accepted and have been there and loving it ever since. You get a license, login online and get your gst and other registrations. The sign up for something like quickbooks online, link your business bank accounts, and categorize expenses as they show up. With quickbooks you make your invoices to give to your client every month, they pay you, and that's your business income. Since this sounds temporary, just pay urself a dividend, much easier than doing payroll and crap for yourself. I used to just transfer funds to myself every couple of month. Have to remember that all you make isn't all you keep.. You have to pay corporate taxes on that money.. And dividend tax on the dividend you give yourself, you issue yourself a t5 at the end of the year, and when you fill in your personal taxes you owe them money.

On phone and in Orlando right now so don't want to write much more now, so if you got any questions let me know. I did all my own accounting, corporate taxes, everything, it really isn't too hard if you don't mind learning a little, I actually enjoyed doing it myself, or you could pay a couple grand to an accountant to put numbers into boxes, really up to you.

Good feedback. Thanks

[nzwasp]

Is the IT contract direct or through a middle man like si systems.

If through a middle man then you dont need to invoice anyone you just fill in their online timesheets and they give you the money after they have taken their cut. Atleast thats how it worked when I contracted last year.

[firebane]

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Is the IT contract direct or through a middle man like si systems.

If through a middle man then you dont need to invoice anyone you just fill in their online timesheets and they give you the money after they have taken their cut. Atleast thats how it worked when I contracted last year.

It is through a middle man who they said I would need to become a sole prop or incorporated. But still waiting on more info.