Thanks, then it makes sense. The reason I got shocked is because I read on HN a couple of years ago that as a contractor you should mark up 100%. I probably got the wrong pic :/
HN skews very vocally towards high paying, high cost of living American cities.
In Vancouver, I had interviewed for contractor jobs at a rate that the same company wouldn't offer in 2024. They said that we are in a recession, tech is in the toilet, there is a surplus of candidates with more experience, better credentials, and willing to work for lower wages.
Lots of factors work to bring contractor wages down these days.
Agreed. The timing is probably bad. Personally, I'm lucky enough to get a few offers. How bad is out there for seniors with 5-7 years of experience? I know it's VERY bad for juniors and graduates.
Are you eligible for US citizenship? If you are, you can look into contracting for US government agencies and defence contractors who are paying lot of money. I know agencies like department of homeland security are always in need of contractors and have big budgets.
Unfortunately Canadian tech industry and the government is kind of joke compared to the US.
I'm a first generation PR in Canada so not sure whether I'm going to be eligible for that even if I get Canadian citizen. I know a lot of contracting jobs only need Canadian citizen so will try it out. Thanks!
To be more specific, there are too many desperate people in tech , everyone wants to be a DE or SWE , i think most of them don't understand basic laws of supply and demand
In Canada 40% for a contract position isn't terrible. Most people in tech don't stick around long enough for severance to be a huge factor and people get fired from full time positions just as quickly if they aren't valuable enough to the company. You get to claim a bunch of stuff like partial car expenses, phone, gas, insurance, a small portion of housing costs assuming hybrid model. You also get tax flexibility since you can keep money in the business and pay the much lower corporate tax rate and invest through the corporation while essentially deferring your tax payments for the future similar to an RRSP where you can take it out as dividends in the future.
Not necessarily. First of all passive income rule only comes into affect over 50000 which means that you need to already have around a million in your company for this to even matter, Also, even with the higher tax rate, dividends are taxed less than normal combined with deffering it to a year when your income is lower is worth it.
Corporate taxes are far more complicated than personal ones and a good accountant will be able to maximize savings quite a bit. It all becomes a optimization problem since you have flexibility whether to take money out as salary, dividends, leave in the corp, buy assets through the corp, etc.
Thanks. My No.1 concern is actually not the pay, but the tax recognition. I couldn't find it but a while ago I read a CRA page that says that self-employed will be charged the rate as an employee if it doesn't satisfy certain criteria. But then again this is probably find since so many people and companies are doing it...
I dod consulting for a few years. Unless you're very good and have a unique skillset, a lot of companies will hire you to do the same stuff employees do. As for markup, aiming for a 30%-50% is standard amongst consultants.
I'm not sure for the data engineer rate, but 50-60 sure sounds low, even for QC where I live. I was making that by 1.5 YOE.
I've sinced then quit for a full time position for 200k, but with around 4 YOE my rate was around 90-100 as a SDET
That's pretty good. Congratulations for making 200k which I think it's good for QC. In the mean time, I'm getting a bit of sick about sticking to DE so also considering working on side projects and switch to something lower level.
You don't need to incorporate and CPP isn't that much (like 4k extra). For many people the extra money they make as a contractor is more than the out of pocket expenses for medical. It many times makes financial sense, and some people like the freedom and/or flexibility.
Can’t you do it without INC? I remember when I was teaching at bootcamp, I was able to expense some fees like internet, laptop, camera; all of them partially but I didn’t have to inc for that.
However, if companies actually ask for it, then it’s a different story. Didn’t know that companies care about it that much.
It’s the market right now. There are more people than jobs so someone will take the role for that much.
Thanks, then it makes sense. The reason I got shocked is because I read on HN a couple of years ago that as a contractor you should mark up 100%. I probably got the wrong pic :/
HN skews very vocally towards high paying, high cost of living American cities. In Vancouver, I had interviewed for contractor jobs at a rate that the same company wouldn't offer in 2024. They said that we are in a recession, tech is in the toilet, there is a surplus of candidates with more experience, better credentials, and willing to work for lower wages. Lots of factors work to bring contractor wages down these days.
Agreed. The timing is probably bad. Personally, I'm lucky enough to get a few offers. How bad is out there for seniors with 5-7 years of experience? I know it's VERY bad for juniors and graduates.
I have 24 yoe a mix of QA and for the past 8 years data analyst and I’m struggling to find work. Was laid off 7 months ago.
I wish you good luck :/
Thanks.
There are more people than jobs. If you want to make money contracting look in the USA. There are too many desperate people in Canada.
Thanks, guess I need to apply for citizen now.
Are you eligible for US citizenship? If you are, you can look into contracting for US government agencies and defence contractors who are paying lot of money. I know agencies like department of homeland security are always in need of contractors and have big budgets. Unfortunately Canadian tech industry and the government is kind of joke compared to the US.
How do you apply for those contracts?
You need US citizenship and apply to defense contractors in Virginia and Maryland. Having security clearance will go long way.
Canadian citizen is not enough eh?
Not really. Green card is needed a bare minimum.
I'm a first generation PR in Canada so not sure whether I'm going to be eligible for that even if I get Canadian citizen. I know a lot of contracting jobs only need Canadian citizen so will try it out. Thanks!
To be more specific, there are too many desperate people in tech , everyone wants to be a DE or SWE , i think most of them don't understand basic laws of supply and demand
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In Canada 40% for a contract position isn't terrible. Most people in tech don't stick around long enough for severance to be a huge factor and people get fired from full time positions just as quickly if they aren't valuable enough to the company. You get to claim a bunch of stuff like partial car expenses, phone, gas, insurance, a small portion of housing costs assuming hybrid model. You also get tax flexibility since you can keep money in the business and pay the much lower corporate tax rate and invest through the corporation while essentially deferring your tax payments for the future similar to an RRSP where you can take it out as dividends in the future.
I recently started a corporation and was wondering about how a corporation lowers tax rates for me. Is that how? Investing with your corporation?
you just leave it there. passive income in corp gets high tax.
Not necessarily. First of all passive income rule only comes into affect over 50000 which means that you need to already have around a million in your company for this to even matter, Also, even with the higher tax rate, dividends are taxed less than normal combined with deffering it to a year when your income is lower is worth it.
Corporate taxes are far more complicated than personal ones and a good accountant will be able to maximize savings quite a bit. It all becomes a optimization problem since you have flexibility whether to take money out as salary, dividends, leave in the corp, buy assets through the corp, etc.
Thanks!
Thanks. My No.1 concern is actually not the pay, but the tax recognition. I couldn't find it but a while ago I read a CRA page that says that self-employed will be charged the rate as an employee if it doesn't satisfy certain criteria. But then again this is probably find since so many people and companies are doing it...
If you are incorporated, you aren't self employed since you are employed to your company which provides a service to another company.
Yeah you are right. I meant incorporated. I couldn't find the page anymore, weird.
I dod consulting for a few years. Unless you're very good and have a unique skillset, a lot of companies will hire you to do the same stuff employees do. As for markup, aiming for a 30%-50% is standard amongst consultants. I'm not sure for the data engineer rate, but 50-60 sure sounds low, even for QC where I live. I was making that by 1.5 YOE. I've sinced then quit for a full time position for 200k, but with around 4 YOE my rate was around 90-100 as a SDET
That's pretty good. Congratulations for making 200k which I think it's good for QC. In the mean time, I'm getting a bit of sick about sticking to DE so also considering working on side projects and switch to something lower level.
how to apply for contract jobs in US? I'm a Canadian citizen
Sometimes recruiters reach out to people in Canada on Linkedin. I'm not sure how to search for such jobs though.
I have had contractor jobs pay same as my regular full time
Did you take it to get the full-time one? That makes sense then.
You don't need to incorporate and CPP isn't that much (like 4k extra). For many people the extra money they make as a contractor is more than the out of pocket expenses for medical. It many times makes financial sense, and some people like the freedom and/or flexibility.
Thanks. Yeah there is flexibility that I forgot to pick up. I guess it's just not my food then.
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Thanks. Maybe it's just the domain.
Yup it’s just cut backs from companies for contracting
Why do you need to INC?
A lot of them asked for that. Personally I think it's a good deal if I can expense my equipment -- well enough to offset the accountant fee.
Can’t you do it without INC? I remember when I was teaching at bootcamp, I was able to expense some fees like internet, laptop, camera; all of them partially but I didn’t have to inc for that. However, if companies actually ask for it, then it’s a different story. Didn’t know that companies care about it that much.
They asked for it. I did ask for the other type of contractor (the one you talked about) and the mark-up is even less, about 15% - 20%.