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Thread: Quantifying Benefits for Contractor vs Employee

  1. #21
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    I shove all my receipts into monthly folders and I try to make sure I use only my CC to buy company stuff so that I have only one thing to pay off every month.

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    Quote Originally Posted by suntan View Post
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    Most people can't handle being a contractor. Too much paperwork and the temptation to spend all your pre-tax money is too great.

    On that note I really need to get back to my accountant on some paperwork.
    You only have to do that if you have material expenses to write off. I would argue that most people massively overestimate the value of these.
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
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    guessing who I might be, psychologizing me with your non existent degree.

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    I do buy some computer stuff, mileage, cell phone, office 365, some other things. I think it saves me about $200/yr lol.

    Mostly I keep the company because virtually all places refuse to deal with sole proprietorships.

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    pretty easy to write of a few thousand bucks worth of expenses

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    You have to depreciate most assets which puts a crimp in the pre-tax savings.

    The CRA wanted me to CCA a fucking mouse. I told the guy I was talking to to shove it. He let me expense it all in one year.

    The govt is best.

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    So lemme play Devil's Advocate, here.




    If 40% is the number, who would be prepared to drop the contract where they were at about $200k and take a salary of $143k with benefits? Would that feel like a no-brainer decision?

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    Yup. Because if you were to lay me off in a couple of years that sweet sweet severance + possible EI.

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    Quote Originally Posted by ThePenIsMightier View Post
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    So lemme play Devil's Advocate, here.




    If 40% is the number, who would be prepared to drop the contract where they were at about $200k and take a salary of $143k with benefits? Would that feel like a no-brainer decision?
    As long as there was a healthy opportunity for performance incentives above that salary it’s not necessarily a bad deal.

    There is more to it than blue cross premiums and a parking allowance.
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
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    guessing who I might be, psychologizing me with your non existent degree.

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    Some of these benefits are a fixed cost… so as compensation increases the percentage will decrease… (employer paid ei, cpp, etc)


    A big one is paid days off… 3-5 weeks vacation plus flex days/PLDs… easily at 6 weeks+, then ~2 weeks worth of stats… bonuses, even at a conservative 10% of salary already puts the premium for employees at 25%+ alone… oh and don’t forget a minimum of 5% rsp matching… so 30% plus ~$15k for health benefits and cpp/ei premiums (employer paid part)
    Last edited by ercchry; 10-21-2021 at 11:25 AM.

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    Quote Originally Posted by ThePenIsMightier View Post
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    So lemme play Devil's Advocate, here.




    If 40% is the number, who would be prepared to drop the contract where they were at about $200k and take a salary of $143k with benefits? Would that feel like a no-brainer decision?
    Yes especially if there is a bonus component to salary. Even a modest 10% bonus gets you to 157, then add in benefits that you no longer pay out of pocket, paid vacation, retirement savings contributions, you’re pretty close to 200 anyways.

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    Quote Originally Posted by ThePenIsMightier View Post
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    If 40% is the number, who would be prepared to drop the contract where they were at about $200k and take a salary of $143k with benefits? Would that feel like a no-brainer decision?
    Yes.

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    Quote Originally Posted by ercchry View Post
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    Some of these benefits are a fixed cost… so as compensation increases the percentage will decrease… (employer paid ei, cpp, etc)


    A big one is paid days off… 3-5 weeks vacation plus flex days/PLDs… easily at 6 weeks+, then ~2 weeks worth of stats… bonuses, even at a conservative 10% of salary already puts the premium for employees at 25%+ alone… oh and don’t forget a minimum of 5% rsp matching… so 30% plus ~$15k for health benefits and cpp/ei premiums (employer paid part)
    What are paid days off?

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    These days, every day!

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    Everyone keeps talking about the benefits of being an employee but seems to be ignoring the benefits of being a contractor. Being about to deduct quite a few things along with splitting profits across future years has a fair bit of value. IMO the gap is def less than 30% figure some people throw around.

    All things being equal if you got a 20% bump to switch to contractor you'd probably finish the years ahead all things being equal. Though contractors tend to be the first chopped so there is the job security aspect and why some people expect a larger margin.

    (Depends on the companies bonus structure though, obviously if you get a huge yearly bonus that's quite different situation)
    Nolan

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    Going from being an employee to a contractor. In the same job. Same position. Same company.

    There are next to no legitimate business expenses in such a scenario.

    Change my mind.
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
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    Quote Originally Posted by Yolobimmer View Post
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    guessing who I might be, psychologizing me with your non existent degree.

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    Other than buying a computer, maybe Office 365 and your own email domain not much else.

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    Quote Originally Posted by killramos View Post
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    Going from being an employee to a contractor. In the same job. Same position. Same company.

    There are next to no legitimate business expenses in such a scenario.

    Change my mind.
    Couldn't you claim your mileage as an expense to get to your employer's site/office/UnderDesk?

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    Quote Originally Posted by ThePenIsMightier View Post
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    Couldn't you claim your mileage as an expense to get to your employer's site/office/UnderDesk?
    Not if you go to the same place every day.

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    Quote Originally Posted by suntan View Post
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    Other than buying a computer, maybe Office 365 and your own email domain not much else.
    If your employer doesnt provide these things that cost almost nothing.

    - - - Updated - - -

    Quote Originally Posted by lasimmon View Post
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    Not if you go to the same place every day.
    This
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.
    Quote Originally Posted by Yolobimmer View Post
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    guessing who I might be, psychologizing me with your non existent degree.

  20. #40
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    Yup, you might save $200 on your taxes.

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