Becoming Self-Employed
 

Howdy - could anyone point me in the right direction - I need to find out how one registers as being self employed and cannot seem to find anything relevant.

Thanks

Re: Becoming Self-Employed
 

I am not a tax consultant, so I might be doing this completely wrong , but this is what we have done (both my husband and I each are self-employed)

If you are going to have an income of over 30,000 $ per year, you need a business number. I suggest you read through this brochure about how to obtain it
http://www.cra-arc.gc.ca/E/pub/tg/rc2/rc2-09e.pdf

If your income is going to be below 30,000$ / year, you don't need to register , the only thing you have to do is tell them when you do your yearly income tax return that you are self-employed.

That's how we do it and it has worked for the last 6 years.

Re: Becoming Self-Employed
 

Fab - it will be well well below 30K! Thank you :0)

Re: Becoming Self-Employed
 

Take cash only and don't tell anybody.

Re: Becoming Self-Employed
 

Unless you are incorporating, you don't need to register. If sales are expected to be over the GST threshold, that is when you have apply for a business number and register for GST (you can voluntarily do this as well if you want the hassle). If you have payroll or import/export you then need a business number to get the accounts set up. If you want to do a trade name you should do a name search and register a name to protect that name. There may be bylaw restrictions, check with city, you may also need a business license.

Also a good idea to check with WCB and your insurer as to what you may need. If you are home based there are some added benefits, also talk to an accountant.

You should also take a peek through this http://www.gov.ns.ca/snsmr/nsbr/entry.asp

Re: Becoming Self-Employed
 

can i ask, in general is being self employed in canada broadly similar to the uk ?? i'm an IT contractor with my own ltd company here. theres extra paperwork but basically i pay less tax so its worth the effort.

i'm thinking that self employment may be a good option in canada (not sure what in yet though...), just wondering if there are the same benefits to outweigh the extra work and risk of being self employed

the obvious one is paying less tax, but what about company cars and health insurance and any other bits and pieces that can work in your favour ??

Re: Becoming Self-Employed
 

When I spoke to employers / agencies (associated with construction) in Canada they did not like the self employed route as they felt it did not show any loyalty to them. I even discussed temp-to-perm and they again were not keen on it.

Re: Becoming Self-Employed
 

Yes, it is broadly similar, but not necessarily as advantageous. Being self-employed will allow you more write-offs than an employee. However, if you have a cooperative employer you can have the employment contract written in such a way that you can get almost as many write-offs as an employee.

Using a limited company has advantages but, unless you are earning more money than you need, there are only very limited tax advantages. Tax rates are set so that by the time you have cash in your jeans the same amount of tax has been paid regardless of the mechanism (employee/self-employed/corporation) you use. A corporation that exists solely to sell your services is much more restricted in the expenses it can claim than a trading company.

If you are genuinely self-employed (e.g. have several different customers) then fine. If you are really an employee then the benefits of being on the payroll, such as extended health and other benefits, the employer paying half your CPP contributions, and access to EI can outweigh the tax benefits of being independent - especially if the employment contract is written correctly.

You might as well keep your options open.

Re: Becoming Self-Employed
 

CRA have rigid rules that apply to determine whether one is employed or self employed. If you don't meet these standards, you are employed, it is not necessarily a choice one has. Construction is an industry the CRA often monitor for 'self employed' who are really employees.

http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-08e.pdf