Quantifying Benefits for Contractor vs Employee

[Nufy]

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Not if you go to the same place every day.

That's why you need more than one client...at least on paper...

[ThePenIsMightier]

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Not if you go to the same place every day.

Can't you work for the same single client for roughly 2 years before you risk the CRA deeming you an employee?

[Nufy]

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Can't you work for the same single client for roughly 2 years before you risk the CRA Deming you an employee?

Longer than that according to my accountant. I am at my current client for almost 6 years now...

[ExtraSlow]

From what I hear, legitimate expenses aren't really the point. I wouldn't know, I was bad at that.

[killramos]

Seems appropriate

[ThePenIsMightier]

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Longer than that according to my accountant. I am at my current client for almost 6 years now...

I should've worded that better.
"The same client, exclusively."

[holden]

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Local IT rate for some sort of development role (developer, architect, etc) was around $140/hr pre-pandemic. It's now around $100/hr.

Is this for software engineering? I though the pay in those roles had gone though the roof since Covid. I read this thread in reddit last week and people were mentioning companies giving their SWE pre-emptive raises of $20-30k just to keep up with market rates.

https://www.reddit.com/r/PersonalFin...r_salaries_in/

[JordanEG6]

Been a contractor from day 1. Moved to staff to get pre-approved for a home. Then went back to contracting after about a year or so.

Personally, I find it more beneficial for me to be contractor salary and tax-wise. As said, it helps alot to have more than one client.

[ShermanEF9]

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Can't you work for the same single client for roughly 2 years before you risk the CRA deeming you an employee?

Thats usually only a concern if you are sole proprietor. Incorporated doesn't have this issue (and is also how my "client" is getting around this rule)

[ExtraSlow]

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Thats usually only a concern if you are sole proprietor. Incorporated doesn't have this issue (and is also how my "client" is getting around this rule)

I think this is incorrect, please consult a professional for all tax planning advice.

[ercchry]

Yeah, you’re not a business unless you’re a business… many people do it, but that doesn’t mean they should

[ShermanEF9]

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I think this is incorrect, please consult a professional for all tax planning advice.

Just how its worked for me the past few years.

[lasimmon]

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Just how its worked for me the past few years.

Until the audit.

[ShermanEF9]

Welp. This calls for a phone call to the accountant.

pro tip: Don't trust people when they tell you anything, even if they are confident.

[suntan]

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Is this for software engineering? I though the pay in those roles had gone though the roof since Covid. I read this thread in reddit last week and people were mentioning companies giving their SWE pre-emptive raises of $20-30k just to keep up with market rates.

https://www.reddit.com/r/PersonalFin...r_salaries_in/

Reddit is full of crap.

As a general market trend in Calgary, rates have gone down mostly because of the CoC.

A contractor rate of $100 is still $208K/annum though eh.

[ExtraSlow]

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Welp. This calls for a phone call to the accountant.

pro tip: Don't trust people when they tell you anything, even if they are confident.

Agree, don't take my advice, I am not an expert or a contractor or a business owner or an accountant. I am just going on one conversation I had about six years ago.
Always consult a professional.

[suntan]

The test is basically

- Do you have more than one client.
- Are you responsible for purchasing your own equipment.
- Are you responsible for your own training.

And anybody can be incorporated and stay incorporated. The roadblock is whether you can claim the small business deduction. Note that that only affects profits, not revenue. If you're drawing everything out as salary or a mix of income and dividends the savings is not that much. Dividends from your business are considered non-special, so they're basically taxed at your normal rate.

Harper closed virtually all the loopholes, Trudeau closed the rest.

[Xtrema]

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Is this for software engineering? I though the pay in those roles had gone though the roof since Covid. I read this thread in reddit last week and people were mentioning companies giving their SWE pre-emptive raises of $20-30k just to keep up with market rates.

https://www.reddit.com/r/PersonalFin...r_salaries_in/

I assume this is not Calgary. Calgary is still depressed. But it's a different tune in US (to a small degree GTA as well), there is a huge effort in retention as there seems to be a a huge game of musical chair going on. Whoever you can't retain, it'll cost you more to rehire. Which makes employees who stuck with you feels like chumps and they looks for another jobs. Vicious circle.

Retention is an hot top among top execs. We had a round of adjustments in July due to some pressure and losses but in no way as lucrative as that reddit post.

[suntan]

The USA has been like that in IT for decades.

It's weird right now. Stackoverflow's latest developer survey said that a lot of people lost their jobs, and a whole bunch of them are saying that they're leaving the occupation permanently.

[ExtraSlow]

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The USA has been like that in IT for decades.

It's weird right now. Stackoverflow's latest developer survey said that a lot of people lost their jobs, and a whole bunch of them are saying that they're leaving the occupation permanently.

Pretty sure you were reading the rigzone boards bro.