I am currently a full time employee, changes have happened that have made me consider my employment at this company. I been just looking around and seeing if anything better is out there.
At first I was opposed to Contract work till one recruiter stated that he thinks I could get $50/hr. This made me reconsider it as I though the amount would have been lower and not worth the loss of benefits.
I still have not decided if I will apply for that job as I first don't know how to compare it to my full time job.
I live in Canada in BC
Current Salary + Benefits
- Salary: $47000
- Vacation 15 days:
- Sick/Personal Days: 10 days
- Pension Matching : $1200
- Other Benefits(internet, gym): $2000
- Health Package:~$5000 (very hard to put a number on this but I got a pretty good health package and probably will never have this kind of package again)
- Work from home: (can't put a number on this)
Since I live in B.C I also get 10 Stat Holidays.
Now the easiest way I guess is to break everything into a dollar value.
Should I calculate how much the Vacation Days, Sick Days and Stat Days would be in $ value? I calculated $6,000 and not sure if I should put that on my Salary.
If I do put that amount on it then I think my salary is bit over $60,000 Gross.
So the contract would be 6 to 12 months so I just took a year to compare against a year of salary.
First I wanted to figure out what the true yearly amount would be for this.
What I did was this
- Figured there are 104 weekends days in a year
- Said that I will take 15 days vacation a year
- Said I will take 10 Personal days a year
- Said I will be taking 10 Stat days a year.
So basically I mirroring what I get from my current employer.
I converted it into hours(7.5 / day). I then took that number and times it by $50/hr what got my about $87,000 / year.
Now I have more added expenses (these are rough estimates).
- Incorporation cost - $350
- Yearly accounting costs - $500
- Health insurance - $1,440 / year
- Provincial Healthcare - $831 / year
So with these costs, it still seems like contracting will come out a head.
Is my logic roughly right?(numbers might be slightly off, I did it yesterday and recalling from memory)
- Do contractors get Over Time Pay?
- In medium to long term contracts can you take vacation half way through (of course no pay)?
- Do I have to invoice the client myself (or does depend on how the recruiter does it)?
- Will I have to buy my own equipment?
- How doe taxes work (Personal Taxes & Corporation Taxes)? Do I just do one lump sum at tax time?
- How about EI? Will I have to pay for EI or am I never eligible for that?
- How do I pay myself? Do I have them to write me a cheque to my "company" and then pay myself somehow?
- How does it lower my taxes?
- Since I am a corporation, can I offer myself special benefits? Like say medical insurance? RRSP matching?
I am very interested in giving being a contractor in the I.T field, I hear it is more work to get setup and it can be riskier.
I think I am at a good time in my life to try it as I am good at handling money and I live at home so even if it does not work out, with my Rainy day fund and living at home I could easily be a year or 2(at current spending rate, longer if I cut back) out of work and still be able to make it.
Any advice or material I can read?