YYZlover

Well, not salary exactly but compensation.

Company is willing to pay x dollars per year for a job, which they can consider run under contract instead of employment. I presume some sort of benefit packages are involved.

I know that an employer in Sweden pays net wage to employee, taxes to gov and a further 37.5% on the gross sallary in employers fees and social security etc.

What does an employer in Canada really pay that en employee never sees?

As this job would be run as a contract I am aware that health coverage would be up to me. I presume I won't be covered by OHIP at any point during the contract and have to cover all aspects.

I hope someone understands what I'm trying to figure out. As I donät know what to ask I don't know how to ask.

Thanks in advance

Judy in Calgary

In Alberta, the generally accepted norm is that a contractor has to earn 27% more than the salary that an employee receives in order to break even.

The "rule of thumb" in Ontario might be different. I'll leave it to the forum members who live there to tell you about their province. Still, I'd be surprised if the percentage in Ontario was as high as it is in Sweden.
x

club_biscuit

main consideration for most of us who occasionally work on contracts is taxes and really depends on how much you think you will earn - having work-at-home, car, licencing fees, subcontractor and travel write-offs etc.. can be financially worthwhile if you earn enough (over about 65k).

at the low end of the pay scale it may not matter as much since tax is lower, so any benefits may be more worthwhile, but I think you pay GST on self-employed income over 30k.

sorry can't be more helpful - if I knew more I wouldn't pay the accountant!

YYZlover

Thanks. I'd be working via my UK company contracted to a Canadian company so Canadian taxes doesn't apply, according to my understanding, and there for nor does benefits.

So I'm trying to figure out what all that would cost an employer if I would have been a resident and get those numbers in to the bull of what I would invoice them.

gryphea

I think, so long as you are living in canada then canadian taxes do apply!

Jingsamichty

I agree.

I understand that a Canadian compnay cannot make payment to a foreign (UK) company without deducting 'withholding tax' of 15%.

If you're resident and have a WP you'll be expected to fill in a tax return and pay tax on your income.

Oakvillian

Why wouldn't you be covered by OHIP? If you're here on a WP there are a few hoops you have to jump through... but assuming you WP is for at least a year's duration and you can get your employers to write an appropriately worded letter to the Ministry of Health, then you can join OHIP after the three-month qualifying period.

Surrey Expat

You have to register for GST if you have revenue of over $30,000 a year. You charge GST to the client and if they are registered they can claim it back if it is a business expense. You then have to remit what you collect to CRA on the frequency they set. This also means that you can reclaim GST on business related expenses.

club_biscuit

ha ha - I did say that I pay the accountant for a reason - my job is to make the money, his job is to keep the money...so far so good. quite right re:GST - forgot that we do indeed add it to the bill. it's only the paying back part that stuck in my mind somehow....

YYZlover

Are you two invoicing your "employer" each month and is the money transfered from the employer to a UK account?

I presume that as my company is UK based I need to have the money transfered from them to a UK account and not to a Canadian account.

I am not asking as self employed with incorporation in Canada. I'm asking as self-employed with a Ltd company in UK invoicing a Canadian company.

Surrey Expat

You really need to talk to an accountant who understands international commerce. This forum can give you feedback and opinions, but really you need definitive answers to stay within regulations.

JonboyE

This is not a straightforward issue as the OP says she will bill the Canadian client from her UK company.

1/ If the UK company operates through a permanent establishment in Canada (an office, a business phone line, the presence of a company employee who has the authority to contract on behalf of the company are all indicators of a permanent establishment) then the profit it makes in Canada is taxable in Canada. If it does not have a permanent establishment in Canada its profits are taxed in the UK.

2/ If the CRA conclude that the mind and management of the company has moved to Canada they can deem the company to be resident in Canada and therefore taxable in Canada on its worldwide income.

As for the OP, if she is here on a WP she will be tax-resident in Canada and therefore taxed on her worldwide earnings - including any income she derives from her UK company.

On the other issue, the employer's payroll costs are CPP, EI, Workers Compensation, Provincial health premiums (if paid by employer) and extended health benefits (if any). CPP and EI cost the employer about $3,000 a year. WC depends upon the rate.

JonboyE

Amen.

club_biscuit

clearly, I rely on the accountant, and I do agree that the only advice to really take is his/hers, but I think the OP, like many many many of the other people who post on here is just throwing it out there to get a sense of the issues involved - if she's done all the work to succeed to this point, I think she's probably clever enough to know not to take this forum as the ultimate in truth! let's give her some credit!

reference all the posts "so what's it like living in...." ????

Surrey Expat

But you don't get fined or put into jail for living in the wrong place!