Canadian Contractor For US Company

agbell · Post by **agbell** » Mon Jun 16, 2014 6:00 pm

Hi,
Excuse my lack of knowledge on this subject. A US company would like to hire me as a contractor. I would work remotely from Canada, and travel to the US twice a year for meetings.

Should I setup a Canadian Corporation or is there a better way to structure things? What are the downsides to this arrangement?

I am trying to figure out the cost associated with working as a contractor for a US company vs a similar role as a Canadian employee.

Thanks

nelsona · Post by **nelsona** » Tue Jun 17, 2014 7:54 am

You would be better of as a contractor, both from a CDn tax point of view (there would be no US tax either way), and fro ma money point of view. The US firm would "reward" you for not being an employee, with a higher remuneration, since they would not need to setup payroll and would not have to fund US fringe benefits, which would be useless to You anywise,

Just make sure they give you at least 40% more than they would have given you as an employee.

agbell · Post by **agbell** » Tue Jun 17, 2014 8:14 am

Hi Nelsona,

Thanks for your input. In what ways would it be better? It makes sense that if it paid 40% better than my current job it would be worth it, but what if it does not?

If this contractor position paid exactly equivalent to a Canadian employee position I currently have with a different company, I do not think it would be advantageous because I would need to pay my own CPP and EI I think.

If it paid 10 or 15% more than my current job, I think it would work out about even, unless there are a bunch of tax advantages or disadvantages I am not aware of.

nelsona · Post by **nelsona** » Tue Jun 17, 2014 9:37 am

It is still better for you to be a contractor, as you would now be able to deduct many more expenses. And if you incorporate, their may be other benefits as well. talk to a CPA about whether you should incorporate for tax purposes. There may be other reasons to incorporate as well, like liability.

besides, the US firm might not want to pay youas a Cdn employee, due to payroll setup issues. Remember though, that they CANNOT put you on US payroll.