Here are the parameters which you need to consider when selecting FTE (Full Time Employment) vs Contract.
Job Security:
FTE has better job security than Contracting.
Contracts can end anytime with just 2 weeks of notice.
House Purchase:
If you are planning to purchase a house, being in a FTE helps to secure a mortgage easily compared to contracting.
Skill Set:
If you possess the skills which are hot in the market, it will not be difficult for you to secure a new contract once old one is done.
Professional Networking:
If you are in contracting world, you should have a strong professional network. It should include peers, hiring managers, recruiters, consultants etc.
Attending Interviews:
Contractors needs to be prepared to give interviews every 6 months. So if you are not ready for that, FTE is the best option.
Spouse’s work status:
If your spouse is working full time, the benefits will be covered by spouse’s employment. Hence it makes your life easy to do contracting.
Leave Plans:
If you have longer leave plans, please keep in mind that contracting doesn’t pay for you to be on leave.
Taxes:
Personal taxes are much simpler compared to contracting. You should be on top of your taxes & learn much more about running your incorporation. There are 3 types of taxes & you need to know how to best run your incorporation.
Cash flow:
Contracting is better in case you need to have a good cash flow. Basically take home is better in contracting.
Retirement Savings / Benefits:
In FTE, your employer & you contribute to CPP, EI, RRSP, shares etc. Your life insurance, health insurance & health benefits are covered by employer’s group policy.
In contracting, there is nothing. You need to do everything by yourself.
Discipline:
You need to disciplined with your documentation, tax filing & managing expenses if you are in contracting world. Any mistakes & CRA will put penalty on it.
Visa Processing:
If you need offer letter for processing visa, contracting would not be a best option. There are no offer/employment letter in contracting. Please check with an immigration consultant before you make decision.
Please feel free to add in case I missed anything.
Disclaimer:
This is my personal opinion. This doesn’t represent the view of my clients, customers or employers.
Taking up contracting is your personal opinion. You need to do your due diligence before you make the decision.
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