@nilz I just recently went through this and I’d rather be tied to CAD as long as your $218k/yr is consistent, who cares what the USD is at. This was a sticking point for them and I had to take the USD salary to be paid in CAD. Economist outlooks don’t look there will be a ton of fluctuation in the near future, but it will be weird getting a different wire amount every 2 weeks.
@rita1989 You read that wrong - CAD will be pegged. In other words, it'll be 216K CAD all year long. If USD to CAD goes 1:1, they'll still make 216K CAD vs 160 CAD with option 1.
@nilz Incorporate and become a contractor. Make sure you can secure another small contract part time as well. This will help with labeling with the cra. You can basically use the corporation as an rrsp. Make a business account and get a business credit card. Talk to an accountant and start going over on how to limit your taxes on the income you get
@galations322 In what way is the corporation an RRSP?
The corporation is the contractor in your scenario, not OP. OP is the director and sole shareholder of the corporation, and still has to file his personal taxes. Keeping in mind as well that OP would need to pay himself from the corporation via a T4 slip (aka still be an employee anyways just to do his own tax deductions) in order to avoid being just as liable for any issues as he would be as a sole proprietor.
@foodie20 I was talking about the rrsp part. But in terms of liability, it’s best to make a bold line between him and the business. Not very hard to do either with a good accountant
@galations322 If you take money from the corp via dividends, you are personally liable for tax debt, etc. Doesn’t matter what else you do.
Not to mention that technically any of these ‘contractor’ options would require OP to have a GST account since >$30k/yr in earnings means that you’re a mandatory GST registrant. So now OP has to remit GST as well.
@foodie20 GST doesn’t apply to international customers though. I just asked 2 accountants that.
He will be liable for the tax that he takes out. So if he makes 200k and only takes out 50k. He only gets taxed for 50k. That’s how it can be used somewhat like an rrsp