All in a day’s work

Full-time-permanent, contract, or self-employment work - each have their risks and rewards. In choosing the type that’s right for you, it is essential that you consider opportunities in your area, the industry you’re in, and your own strengths, personality and lifestyle. As each has its own implications, it’s important to understand how the law and the Canada Revenue Agency regard these different ways of working and their potential impact on you.

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Chartered Accountant Andrea D. Cromie is a senior search consultant with The Mason Group in Mississauga. She’s built a successful career matching client companies with the right professional accounting personnel. Chartered Accountant Erik J. Ellis is a partner with Collins Barrow Kawarthas LLP in Lindsay. He works with people and businesses of all kinds and sizes, and has seen how different work arrangements can benefit both employers and employees. Here are eight questions Cromie and Ellis suggest you ask yourself to help identify the work style that suits you best now, and is most likely to provide you with a successful future. Do you like change and constant learning? - Many people that Cromie sees crave variety, challenge and growth opportunities in their work. Contract work often fits the bill. The employer issues a paycheque with income tax, CPP and EI deducted but rarely offers other benefits like extended health or insurance coverage. Either party can usually terminate the relationship with limited notice and little recourse. What’s your tolerance for risk? - With the exception of those who are paid straight commission, most full-time-permanent employees have fixed salaries and (relatively) secure incomes, Ellis says. In contrast, the incomes of the self-employed and contract employees can fluctuate dramatically. Providing they meet the government’s specifications for the plan, both contract and permanent employees are eligible for Employment Insurance benefits if they lose or are unable to find a job. Self-employed people can now opt into EI on a limited basis but they would not be able to collect due to a loss of business. Do you want to build your experience and resume quickly? - Contract work is probably your best bet. Added bonuses are being able to “try on” companies to see if you’d like working there permanently; opportunities to make new contacts and expand your network; and no obligation to stay beyond the contract end-date if it’s not for you. Does your spouse or partner have benefits at their company? - If yes, you’ve eliminated one of the most compelling reasons people cite for needing full-time permanent employment. Do you have responsibilities that make it difficult to work full-time or regular hours? - Child care, elder care or even volunteer activities, continuing education and hobbies can make contract or self-employment attractive. Many self-employed people work from their homes at hours they decide. Contractors can take time off for extended periods - a big plus if children are home in summer or aging relatives need support. Want to set your own salary? - The self-employed have the ability to work-more-to-earn-more. Contract workers usually agree to a set rate for the duration of the assignment, although performance bonuses and overtime are sometimes possible. Full-time-permanent employees are paid an agreed-upon wage or salary, with strong laws to protect them if the company doesn’t honour its obligations. Salary increases and/or bonuses may be tied to their performance - or even the company’s during a prescribed period. Are you disciplined about paperwork? - The self-employed are responsible for their income and CPP. They must collect and remit HST. Tax deductions for many expenses that are directly related to running the business can be a huge incentive, but it’s imperative to keep complete, detailed and accurate records to substantiate any claims. Do you know how to protect your assets? - Self-employment can take a number of forms: a one-person owner or sole proprietorship; a partnership, which involves two or more people; or a corporation. The latter is a separate entity defined by law and shareholder equity, even if the company is privately owned. Incorporating a business protects the owner’s personal assets in the event of a lawsuit or bankruptcy. Brought to you by the Institute of Chartered Accountants of Ontario.