Work Part-Time - Independent Contractor?

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Number one , make sure the company you are currently employed with are inside with a side gig in the same business. And not the next level manager , the big guy that can fire you . Some may consider it poaching.

Get all your tax ducks in a row , you’ll need it eventually and when tax breaks are offered and things like COVID money is getting tossed around , you need the legit business to get in.

Get a decent bookkeeper, starting most are fine , you don’t really need an accountant except yr end . Bookkeepers , the good ones know as much as most CAs for daily work .
A bit of your time gets eaten chasing work, discussing projects and chasing outstanding accounts, none of which may be billable, make sure it’s worth it .


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Depending on the anticipated duration of the side gig, it maybe worth incorporating and then pay taxes on the after deductions amount of the contract.
You could then Hold the profits in retained earnings, reinvest and take dividends if you need any income from the venture. This could then become an additional revenue stream for retirement.

This model is used my several in academia where consulting is encouraged.
 
If you are looking for a side hustle, here's what I would do.

1) Make sure it's within the terms of your employment.
2) Never intermingle a side hustle with your regular job. Use your own equipment/tools/facilities; don't do any side work while you're performing your day job duties -- even answering the phone.
3) Find a bookkeeper, discuss the financials and evaluate the benefits BEFORE you start.
4) Never bite off more than you can chew - if you get jammed up both your day job and side hustle will suffer..
5) Draw up a plan that makes your side hustle your main gig. It may never happen, but if it proves lucrative OR you run into employer issues you at least have a plan.
6) Don't plan to fail, but don't be afraid to fail. If it doesn't work out so be it, you learned something. Failure is OK as long as you learn something from it.

The biggest challenge you will find is time. Before you start, 10-20 hours of 'spare time is easy to visualize, once you get going that will change -- side hustles can sometimes feel like a grinding trap. If you're young, have a supportive partner/family that helps.
 
Mad Mike said:
If you are looking for a side hustle, here's what I would do.

1) Make sure it's within the terms of your employment.
2) Never intermingle a side hustle with your regular job. Use your own equipment/tools/facilities; don't do any side work while you're performing your day job duties -- even answering the phone.
3) Find a bookkeeper, discuss the financials and evaluate the benefits BEFORE you start.
4) Never bite off more than you can chew - if you get jammed up both your day job and side hustle will suffer..
5) Draw up a plan that makes your side hustle your main gig. It may never happen, but if it proves lucrative OR you run into employer issues you at least have a plan.
6) Don't plan to fail, but don't be afraid to fail. If it doesn't work out so be it, you learned something. Failure is OK as long as you learn something from it.

The biggest challenge you will find is time. Before you start, 10-20 hours of 'spare time is easy to visualize, once you get going that will change -- side hustles can sometimes feel like a grinding trap. If you're young, have a supportive partner/family that helps.
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This is key. Especially the last part about a support system to make sure you're encouraged. Last thing you want is your wife to say 'you're never home, I miss you, I'm lonely, time to discuss this'....worst words you can hear.

As for an HST number....

When to register for and start charging the GST/HST - Canada.ca

www.canada.ca www.canada.ca

Outlines WHEN you need to register depending on the 30k and when it's achieved.
 
mimico_polak said:
This is key. Especially the last part about a support system to make sure you're encouraged. Last thing you want is your wife to say 'you're never home, I miss you, I'm lonely, time to discuss this'....worst words you can hear.

As for an HST number....

When to register for and start charging the GST/HST - Canada.ca

www.canada.ca www.canada.ca

Outlines WHEN you need to register depending on the 30k and when it's achieved.
Click to expand...
Good lord, how long has it been @ $30k? That was the limit 25 years ago when I first registered.
 
george__ said:
Got me a insurance quote and wow wow. Now I see why contractors charge so much
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There may be a difference in using your car FOR work (i.e. carrying passengers, tools, etc.) and going TO work.

I know I called for my wife's cleaning business, and they re-confirmed that it's no different than going to an office daily.
 
mimico_polak said:
There may be a difference in using your car FOR work (i.e. carrying passengers, tools, etc.) and going TO work.

I know I called for my wife's cleaning business, and they re-confirmed that it's no different than going to an office daily.
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No this was for commercial insurance

www.techinsurance.com

Errors & Omissions (E&O) Insurance - Get Free Quotes | TechInsurance

Errors and omissions insurance, also known as professional liability insurance, protects small businesses against lawsuits over professional mistakes or oversights. Compare quotes online with TechInsurance.
www.techinsurance.com www.techinsurance.com
 
george__ said:
No this was for commercial insurance

www.techinsurance.com

Errors & Omissions (E&O) Insurance - Get Free Quotes | TechInsurance

Errors and omissions insurance, also known as professional liability insurance, protects small businesses against lawsuits over professional mistakes or oversights. Compare quotes online with TechInsurance.
www.techinsurance.com www.techinsurance.com
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If you don't mind, how much is a policy and for what coverage? I never bought any, but I was young and dumb (and lucky - or talented, lol) at the time, and didn't even know about it. I'm eligible for early retirement soon and have been considering going back into the consulting business.
 
Just a couple of notes, then some random thoughts all in a mess below...
  • To get good advice you need to be more specific what a contractor is in your case. Many here will think somebody with a hammer (trade). I think, and my be wrong, you are not talking classic trade but something like doing contract work in something else (maybe in an office at a desk...technology, engineering, graffics....)? Maybe not as strong as consulting...
  • Independent contractors (not trades) tend to make ~1.5 times "hourly" what employees make. They are disposable and have much lower loaded costs than an employee.
  • Errors and omission insurance etc. will be a cost.
  • When a company does the same contracting (to another company) the rate will be 2.5 to 3 times the employee hourly rate. They need to pay all the loaded costs and they need to pay the employee between contracts, insurance etc. It is not gouging.
  • Be prepared for downtime between contracts and you need to build a reputation and connections to get the next contract.
  • Do not take anything part time in a field related to your day job, very bad call if that is your goal.
  • Mortgages will be much harder to get as banks like "stable" employees and do not like contractors that could be on the street tomorrow, if you go 100%. Offset if you are making the $$$$s and have a wad in the bank.
  • Taxes should be lower as your "small business" tax will be at a lower rate and you should only pay yourself just what you need to for income and leave money in the business.
  • You may need to be location flexible.
 
backmarkerducati said:
[*]Mortgages will be much harder to get as banks like "stable" employees and do not like contractors that could be on the street tomorrow, if you go 100%. Offset if you are making the $$$$s and have a wad in the bank.
Click to expand...

I actually looked into this a few years ago, and one of the banks told me as long as I can produce the last two consecutive annual tax returns showing stable income, they'd use the average of the two returns as proof of income for qualifying for a mortgage.
 
I once accepted a job offer with a salary lower than they could afford, on the condition that I had the freedom to contract on the side to make up the difference during business hours as long as my salaried job took precedence and of course, no conflicts of interest. I ended up making more than my salary from contracting (technically sub-contracting to a consulting firm). That was such a sweet gig, but the director who hired me eventually left after a couple years, and then my manager who she explained the deal to also left. The replacement manager couldn't verify the handshake deal and wanted me to have fixed hours, so I resigned.
 
Lightcycle said:
I actually looked into this a few years ago, and one of the banks told me as long as I can show two consecutive annual tax returns showing stable income, they'd use the average of the two returns as proof of income for qualifying for a mortgage.
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It will depend on the bank.....
 
^
My mortgage broker said the average of my entire income over 24 months would be used
 
Relax said:
I once accepted a job offer with a salary lower than they could afford, on the condition that I had the freedom to contract on the side to make up the difference during business hours as long as my salaried job took precedence and of course, no conflicts of interest. I ended up making more than my salary from contracting (technically sub-contracting to a consulting firm). That was such a sweet gig, but the director who hired me eventually left after a couple years, and then my manager who she explained the deal to also left. The replacement manager couldn't verify the handshake deal and wanted me to have fixed hours, so I resigned.
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Similar story here.

I wanna stay in a specific industry but jobs are scarce, housing is $$$ etc so if I want to stay then I need to do this
 
george__ said:
^
My mortgage broker said the average of my entire income over 24 months would be used
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This is what my broker also told me. When I was in FIFO, and my wife has her own business, they look at an average of 2 years to confirm hours, and overtime average in order to count toward your mortgage limit. This was with MCAP and BMO.
 
Relax said:
If you don't mind, how much is a policy and for what coverage? I never bought any, but I was young and dumb (and lucky - or talented, lol) at the time, and didn't even know about it. I'm eligible for early retirement soon and have been considering going back into the consulting business.
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I pay ~3000 for 1M E&O and 5M GL. Boo. Others have talked about much lower numbers but I couldn't get them.
 
I pay $1,100 for an F150 as daily driver , on the road work vehicle. Sales vehicle / no payload . Northfield Ins. I had never heard of them , my broker found them
If I use wife's BMW no change.
 
Lightcycle said:
I actually looked into this a few years ago, and one of the banks told me as long as I can produce the last two consecutive annual tax returns showing stable income, they'd use the average of the two returns as proof of income for qualifying for a mortgage.
Click to expand...
Getting unsecured credit is harder for contractors, mortgages, and car loans a bit easier.

Credit underwriters are looking for stability in a job (character) - OR - a job that's in a stable industry. 2 years of a steady income in a demand field should be as good as income from a job. For example, a self-employed restaurant designer may make $20K for a month's work -- but in a difficult market segment -- he/she will have a much harder time getting credit than a contract nurse who makes $10K a month, and only works 6 mos a year.

If you are going alone and might need some reserve cash to carry you through tough spots, it's always better to get an unsecured line of credit while employed. Getting it later (when you really need it) can be difficult and/or expensive.
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