Compensation: How do I convert FTE annual salary to a contractor rate?
It depends.The first issue is whether it is long term contract, 6 months to over a year.Short term contracts pay more, increasing with reduced duration.Accounting for benefits, one should add one's health and dental insurance expenses to the comparable base salary.Accounting for additional taxes (FICA) one should add around 8% or slightly more.Account for salaried paid vacations.The hourly rate is at least ((salary + insurance costs) / ((52 weeks - n weeks salaried vacation&holidays) * 40 hours)) * (1.08)Adding another 10% is reasonable depending on contract length.Also you will not be getting an equity so that may need to be factored in lightly.
Is there an equivalent of a 1099 in Canada?
No, Canada does not have 1099s.Either you are an employee, and you get a T4 from me (your employer); or you are a contractor (aka “self-employed individual”) and you are on your own.An employee on a short-term contract is still an employee and still gets a T4 at the end of the year. A contractor gets nothing. No year-end summary or information slip or anything like that for tax purposes. As a contractor, you keep your own records of how much I paid you and why.A contractor sends invoices to the company. A contractor does not get wages or salary or paycheques. Most importantly, if you are a contractor, I, as the employer, do not have to pay CPP or EI for you; and I don’t deduct these amounts from any payment I make to you. You do the CPP yourself, and you are not eligible for EI.Revenue Canada: Employee or Self-employed?Note: There is one exception. If I paid you sales commissions and you are a self-employed individual, then I will issue a T4A showing all the commissions for the year. Types of income to report on a T4A slip.Also: a handy chart I foundHow Different is the Employee Contractor Relationship in Canada vs. the US?Disclaimer: I am not an accountant! If you are running a business in Canada you need to check your situation with your own accountant.
How can I calculate my current salary into a contractor hourly rate in Canada?
There are 260 week days (Mon-Fri) in a year. There are 11 statutory holidays (although some provinces have 12). But let us say they are only 11. So there 249 working days per year. You get an additional 20 working days off on top of that so you work 229 days. The average work day is 7.5 hours long .So you hourly rate issalary divide by 229 divide by 7.5 - hourly rateYou various insurance benefits are worth $353.52 per year or about $0.21 per hourIf you maxed out the RRSP contribution your employer would give you about $560 or $0.33 per hour... so your total hourly compensation would be your hourly rate plus $0.54Your CPP/EI contributions are based on monthly income until you reach the annual income. I have had jobs where I stopped paying after 5 months because I reached the annual max. The federal tax contributions are paid monthly as an advance against the amount you will owe at the end of the year. It is possible that your new income will be so high that hour tax contributions on your old income were to low when combined when the finale bill comes do. But it is difficult to say with out all the details.
If i work as an independent contractor and make about 2400 a month how much should i put aside for taxes?
The answer depends on your filing status, your other income, and your dependents. If you are single with no other income and no dependents, and no expenses from your work, you will owe about $6,700 in taxes. So I would set aside $600 a month. That will cover your federal taxes, and some of your state taxes. To avoid an underpayment penalty, you should forward the amounts set aside as estimated tax payments.
Penalties for not paying tax on time - independent contractor?
So I started my job in April and have made roughly around 30,000. I haven't saved up for taxes. Paid off other bills that piled up during the times I didn't have a job. What are the penalties for not paying Federal and State taxes on time? Does my credit score take a hit if I setup a payment plan with them and stay on it? Do they have a payment plan? Is it worth contacting the TV advertisers that help you and work with IRS directly to set up payment plans and stuff? Thanks to anyone who responds to the question.
If a sub-contractor gives you a fake social, what can I do to not take the tax hit?
Is he a subcontractor or an employee? Employees get W-2 (and payroll taxes withheld and matched), subcontractors get 1099s. If he is an employee with a W-2, you have nothing to worry about in terms of taxes, as long as you withheld and matched all payroll taxes. The only problem would be immigration officers showing up one day. If he is a sub-contractor with a 1099, this might create a potential problem if IRS audits, because your expense deduction will not match his reported income.
Salaries and Wages: If I make $60/hr as a contract web developer what rate should I charge if asked what my rate would be for full time employment?
I'm glad you asked this question. First of all, your rate is based on your skill level, experience and ability to negotiate. Just because your rate is $60 / hour as a consultant (which is roughly $120,000 annual = 60 x 2000 hours) that doesn't mean you are fairly compensated. You may be in a position to find a job paying you $150,000 per year plus benefits.Second, the difference between contract and salary should include a couple of considerations:1. Taxes - as a contractor you could be in a better tax situation, which means what you take home from earning $120,000 per year as a consultant may be the equivalent take-home of a salary at $140,000 per year (assuming your net tax rate is 30% self-employed vs. 40% employed). Consult a good CPA about your options to incorporate and maximize your tax benefits.2. Compensation as a whole - you may not need insurance, health, 401k and other benefits of a salary now, but you will. The sooner you start taking advantage of such benefits (or buying them for yourself as a contractor) the wealthier you'll be in the long-run. Consult a good Certified Financial Planner (CFP) about building wealth. 3. Your Ideal Work - Is being a consultant leading you to do your best work? Or would a salaried position? Consider your commute, your boss, your work place, your style of management, etc. Consider your freedom to express yourself, be creative and grow. Consider your time spent searching for paying work vs. having secure work.Also, look at your relevant salary range on sites like Salary.com to see what salary you could expect to earn in your geography.Good luck!
If I make $65,000/year salary as an employee what would the equivalent be hourly as a contractor?
Take your salary ($65,000) divided by the number of weeks (52/year) divided by 40hrs per week. (65,000/52/40= $31.25) You are currently making $31.25/hr assuming you are working 40hr weeks. Don't forget this is before taxes. And also don't forget about any other benefits you may have through your current employer (health insurance?)