contractor or employee?

[joel]

I need to make a decision between two job offers right now, one would be as a consultant the other would be as an employee.
Which would you choose and why?

consultant:
more salary ( ~25% more)
1 year duration w/ option to renew.
no benefits pkg
slight less convenient location glenlyon parkway
more potential in terms of career experience
8hr wrk days
probably a bit more stressed environment
write off expenses like travel/office/equipments/phone/etc...

employee:
less salary
max 5 year duration
med/dental benefits
rrsp match 4% of income.
more convenient location metrotown
7.5 hr wrk days.
doing relatively the same job i already know and do.
other notes: the med/den benefits are not a huge deal for me since, i am covered under Joyce for the time being.

just want your guys perspective, perhaps you guys have some insight i have not considered.

[geForce]

I guess it's personal preference. For me, I like job security, so the salary job with 5 year duration would be preferable. It depends on the company too. It's more of a plus if it's a reliable company.

Although, 25% more salary is pretty tempting too... And the career potential is a good plus.

Tough choice!

[se7entse7en]

I'm not sure if by 'consultant' you mean contractor/self-employed or not.

Self Employed:
There's also the hassle of having to deal with GST/HST. It would suck if you were expected to cover the tax.
As a plus, however, if they were going to pay you 25% more + GST, you could invest the GST you collect and earn interest on it in between the quarterly payments that you'd have to make.

Also, as an employee, your employer pays a portion of your CPP. Self employed, you'd have to pay DOUBLE the CPP that you otherwise would have as an employee.

As far as benefits go, unless you're planning on having kids, I'd suspect you'd be better off without the medical/dental and just take the extra money.

Glenlyon Parkway vs Metrotown... personally I think the difference is negligible. I mean, if you're gonna have to get in your car to get to work anyway...

[joel]

yes, i meant self-employed. it would be ~25%+GST. i was also looking at incorporating. then paying myself thru dividends. apparently, i'd save more in income taxes that way... that may affect how the cpp thing works too. as i might not be contributing to cpp at all.

for metrotown, i'd be ok walking to work. roughly 15-20 minute walk. although i could bus too, seeing as the bus takes me directly there.

for glenlyon i'd have to figure out some other arrangement. i might just get a bike, and go up and down on decent days. but i'll have to figure out something else in the winter. i may end up needing to get a car just to make the short trip.

[se7entse7en]

Will you be paid:
a) every other week
b) once a month
c) whenever the company has enough money to pay you?

[joel]

for the contractor position, my best guess would be a) although i haven't seen the actually paperwork. the client would be bchydro.

[nature boy]

[se7entse7en]

[Wetundies]

The wife is on a consultant/contractor right now. Yes, you should incorporate. She writes everything off, pays herself the max dividends per year. Writes off all medical expenses that's over my insurance that covers her. Pays around 3k in taxes. As a contractor you can always explore and look at multiple opportunities at a time.

[Duncan]

i think if you incorp like fynn said, it may be worth it to contract yourself out. You could always just try the contractor thing for the year and see how you like it. If you don't, then you could look for another job after. You know what's it like to be an employee, maybe you'll like it better as a contractor.

if you have a good accountant, to help you with the numbers, it may be worthwhile to try contracting. paying double cpp isn't a huge deal as cpp maxes out at a certain amount anyways.

Although, you might wanna factor in, if you make 25% more as a contractor, you may end up in a higher tax bracket and end up paying more income tax.

For me, i'd sit down and fully evaluate the following two points:
1) at the end of the day, accounting for all expenses and how much value rrsp matching and benefits give you, which path pays you more for your time, and
2) how much value do you put in the conditions in which you work? ie. job security, stress environment, travel, etc.

and after listing out what i came up with for the two points, then i'd be able to weigh the monetary value vs work environment out.

and if you're planning on getting another car, you could write it off as an expense if you contract yourself. of course you'd be saving more money if you didn't get a car in general, but if you've been planning on getting another car, you could save more money by writing it off

[jeSteR]

When you incorp... you are essentially become a company. You are an employee of your own company and get paid by them. You contract your company's services and it is your company that is being paid by the contractee. Business taxes are far lower that personal income tax, so basically, you can just pay yourself enough to live on, thus insuring that you pay income tax at the lowest level... or even none if you pay yourself less that $18K??? a year. Then let the company pay the taxes on the rest of it at the business tax rate. Incur all the expenses... car / insurance / a reasonable amount of entertainment and or food expenditures / even clothing through the company. No one ever said that a company HAS to make money (within reason) The extra 25% is more than enough to make this very worth while if you are willing to put the time to structure this properly (and legally). If you want specifics, ask Fynn, Dave or me to go over it with you.

[joel]

right now, i am leaning toward the contractor gig.

more so b/c of career opportunities it might open up more so than the salary. also I will be able to experience running my own business, which i think could be a plus too. it is the more riskier choice and definitely would require more effort on my part. but I am figuring it is better to do that now than later if kids were in the picture.

i have also heard bad things about the project manager for this contractor position too. mostly that he has very high expectations. and also like to have his *** kissed. the high expectations can be somewhat reasonable i suppose... but i suck when it comes to office politics and brown nosing.

[jeSteR]

If you incorporate, you can complete the Kit's condo under your incorporation too. All income and profit from there is taxed at a MUCH lower rate than capitol gain / personal rental income tax rates.

[Wetundies]

[nature boy]