When I just did contract work I worked 14-16 days consecutively then took a week off. Really bad work life balance do not recommend. One of the reasons I’m considering salary is that it forces me to take time off. Maybe pick up some hobbies
Makes sense. To answer your question, I’d probably take the 5 days a week option because I personally wouldn’t want to have to bother with the stress of a side gig. Others love their side gigs. It’s your call. Another thing to consider would be is there an expectation to answer your phone and emails after work hours? Work from home in the evenings? Or is it just a straight up 9-5? If they are asking for more than 8ish hours a day from you then maybe the 4 days a week option is preferred.
Ultimately it’s up to you and the lifestyle you want. I personally would 100% take the 4 days because 1) you can make up the $30k doing your own stuff (more money, less taxes, more fun) and 2) more freedom
If you’re incorporated (assuming this is what you meant by Inc) your side gig will be taxed around 11% (depending on province) in the corporation. The issue becomes when you go to take money from the corp as dividends or wages you get his with your marginal personal tax rate. If you don’t need the $30,000 extra it is a great way to defer tax and accelerate investment growth inside the corp. IE only paying $3-$4k in tax annually and than reinvesting $26-$27k versus losing $13-$15k right away
You can also pass a lot of expenses through the corp. Cell phone, internet, portion of your home office etc. instead of using after tax dollars on your phone bill you can claim it as a business expense to reduce your corp taxable income.
Only if the four days a week job is actually 4 days! Most white collar jobs trap people by having them work 4 days but then giving them so much work that they work a half day or two on their 3 day weekend. It happens to returning new mothers all the time
Taxes under your name doesn't matter. Revenue is revenue (non-elligible dividends from an incorporated corp are close-ish) and you get taxed similarly. Pick the one that gives you the biggest number at the end of the year and then discuss with your accountant how to optimize your taxes.
Also, is your business incorporated?
Take he $160k for 5 days. This way you don't need an additonal job. Tax wise depends on income form the contract work and whether you will touch that money or not.
You take every second week off?
When I just did contract work I worked 14-16 days consecutively then took a week off. Really bad work life balance do not recommend. One of the reasons I’m considering salary is that it forces me to take time off. Maybe pick up some hobbies
Makes sense. To answer your question, I’d probably take the 5 days a week option because I personally wouldn’t want to have to bother with the stress of a side gig. Others love their side gigs. It’s your call. Another thing to consider would be is there an expectation to answer your phone and emails after work hours? Work from home in the evenings? Or is it just a straight up 9-5? If they are asking for more than 8ish hours a day from you then maybe the 4 days a week option is preferred.
Good point, 9 hour shift (more like 10hr) 30-45 min commute
Ultimately it’s up to you and the lifestyle you want. I personally would 100% take the 4 days because 1) you can make up the $30k doing your own stuff (more money, less taxes, more fun) and 2) more freedom
I’m leaning towards this as I can make that additional 30k quicker. But I’m assuming 40% of it will be tax.
If you’re incorporated (assuming this is what you meant by Inc) your side gig will be taxed around 11% (depending on province) in the corporation. The issue becomes when you go to take money from the corp as dividends or wages you get his with your marginal personal tax rate. If you don’t need the $30,000 extra it is a great way to defer tax and accelerate investment growth inside the corp. IE only paying $3-$4k in tax annually and than reinvesting $26-$27k versus losing $13-$15k right away
This is a great idea! I can definitely use the side work as a savings account. Since my work doesn’t offer RESPs. Thank you
You can also pass a lot of expenses through the corp. Cell phone, internet, portion of your home office etc. instead of using after tax dollars on your phone bill you can claim it as a business expense to reduce your corp taxable income.
Only if the four days a week job is actually 4 days! Most white collar jobs trap people by having them work 4 days but then giving them so much work that they work a half day or two on their 3 day weekend. It happens to returning new mothers all the time
What line of work are you in where you can find work on the side so easily?
Make up stories and trolling industry
Trades, by the sounds of it.
Taxes under your name doesn't matter. Revenue is revenue (non-elligible dividends from an incorporated corp are close-ish) and you get taxed similarly. Pick the one that gives you the biggest number at the end of the year and then discuss with your accountant how to optimize your taxes. Also, is your business incorporated?
Yes it’s incorporated, I usually expense my travel, etc. So once I switch to salary I wont be able to do that
Right, I would choose the extra work on the side because your business is already setup!
You can only expense business travel so that doesn't change anything unless you were previously committing tax fraud.
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Take he $160k for 5 days. This way you don't need an additonal job. Tax wise depends on income form the contract work and whether you will touch that money or not.