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]

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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.

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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.

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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]

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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.

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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.

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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]

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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]

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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.

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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]

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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]

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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]

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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!