Asparagus

Hi there
I’m a dual U.K. Canadian citizen working for a U.K. charity in London and moving back to Canada in the fall. My company says I can continue working remotely for them and we are trying to sort out whether that will be as an employee or as a contractor.

They have asked me my preference. I understand that for them, it’s better if I’m a contractor (we are v small and have no presence in Canada though as a charity aren’t profit making). Setting up payroll for me alone would be a burden for them and they’d rather use that money to pay me, if being a contractor isn’t a huge burden.

So my question is: if I have a choice, which is better? Being a remote contractor or an employee?

- are the tax right offs as a contractor worth it?
- would I still be eligible for things like paternity/prenatal leave (moving to Quebec so I think so) as a contractor?
- will I still be able to buy property in Canada if I don’t have a permanent job?
- what happens to annual leave?

If I do go the contractor route, advice on what to negotiate to make sure I don’t lose out on what I have now as an employee would be fab.

thanks!

dbd33

I can't answer most of this but have been a contractor, and a pimp, in Canada for many years. The key thing to understand is that a contract is an arrangement whereby you are paid for hours worked, nothing else. So, if you work a 40 hour week, you can assume your annual pay to be 8*260*your rate and nothing else. You don't get paid for holidays, for paternity leave, for anything except hours worked. If you get sick and can't work that's your problem so contractors tend not to get sick. There are no longer any write offs to speak of for contractors; course fees are the only significant deduction employees don't get.

Understanding all of the foregoing, I think you want to be a contractor. It's a hassle for the employer to create a payroll for just you and may not be possible at a reasonable cost. The tax deducted is going to be a mess because the payroll is new and you're the only one on it.

What you need to do is to work out a rate that's going to be acceptable to both parties. I'd calculate your gross hourly rate now, add a third and ask for that. I suppose it's you who wants to move to Canada so you have no leverage, settle at current gross + 10% or better.

redfox05

I'm actually doing the opposite, working in the UK, contracting for a Canadian company. But same kind of thing, small company, they cant really setup payroll here in the UK, so contracting and charging per hour is the only/best way we found so far.
I would say benefits wise, you're in the better position in that there is a big difference in the UK between employed and self employed in terms of holiday pay, sick pay and all the rest.
In Canada, it's more of a shock on that front, most companies only give 2 weeks holiday standard, and no sick pay (which I thought was a big comfort/security in the UK for employed vs contractor). Companies that do offer sick pay often give it as several days of "Personal time" which you can use for sick or just holiday.

For the property thing, I imagine it will be harder, same for me in the UK, it cuts out a lot of mortgage providers being self employed compared to employed, but will be interesting to see what you find out.

Hope that helps, any more questions just ask.