The Transition from Employed to Self Employed Part 3

Let’s now move onto the 3^rd option in the transition from employed to self employed.  The 3^rd main option for making the transition from employed to self employed is through a 3^rd party contract service, such as the one we use called Job Works.  A third party contract solution allows you to have a steady contract with one company, similar to being employed with the same company.  The main difference is that you would be legally on contract, saving lots in tax through deductions, income splitting, dividends and more!  The key here is legal structuring as you don’t want CRA to come back and say you are an employee!  In a 3^rd party contract solution, you would have a corporation set up that contracts with the 3^rd party contract provider.  The 3^rd party contract provider has a contract with the company that pays the 3^rd party contract provider for the services that you will provide and then the 3^rd party contract provider has you fulfill the work that the company is looking for.  So in essence, your corporation that you work for and are an owner of, works through a 3^rd party contract provider to provide services for a company that has contracted with the 3^rd party contract provider.  There are many people who have been employed by a company and then the company that they worked for agreed to go through the 3^rd party contract provider allowing them to transition from employed to self employed!  For more information on Job Works, a 3^rd party contract service provider, you can go to www.jobworksinc.ca 

If you want to discuss your transition from employed to self employed, or the possibility of making the transition, don’t hesitate to contact us.  Also if you are an employer or a business that is looking to hire or transition your current employees, do speak with us first!