Entrepreneurship & Small Business

Changed Job, old employer gave part time work

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  • Aug 21st, 2021 3:36 pm
[OP]
Member
Jul 29, 2019
316 posts
300 upvotes

Changed Job, old employer gave part time work

I am in IT, and switching to new job next month. My current employer offered me to work for him part time as contractor. I am assuming around 15 hours work per week from him which would end up being $15-20k/yr.

What would be the best way to go forward with this. I have researched and think a sole proprietorship should be fine, but not sure if the expenses like a new laptop, car use for work and such can be deducted in it or if I need to incorporate for it.

Any tips or advice are welcome
I spend time on RFD,
more than I'd like to admit.
But I console myself stating,
I'd need another job if I wouldn't
13 replies
Sr. Member
Nov 10, 2019
622 posts
610 upvotes
Just make sure there's no conflict of interest
[OP]
Member
Jul 29, 2019
316 posts
300 upvotes
kimchibowl wrote: Just make sure there's no conflict of interest
Yes, the new job is on different technology stack and I am only going to work for previous employer outside of 9 to 5.
I spend time on RFD,
more than I'd like to admit.
But I console myself stating,
I'd need another job if I wouldn't
Member
Jun 23, 2010
337 posts
113 upvotes
If you are a sole proprietor then you will be taxed on your entire income in the same tax year so it doesn't leave you any room to spread this out over years or save it for a rainy day.

You can deduct all those as a sole proprietor as well. If you have like 10K left over after deducting all your expenses then just be a sole proprietor because a corporation has higher accounting/administrative costs but there are great tax saving options if you are making good net income that you don't need for your daily living.

Tiberious
Your friendly Ontario neighbourhood accountant
[OP]
Member
Jul 29, 2019
316 posts
300 upvotes
Hmm, I am going to keep it as Sole proprietor, and see how it goes work wise. And then decide after a year if it makes sense based on numbers.
I spend time on RFD,
more than I'd like to admit.
But I console myself stating,
I'd need another job if I wouldn't
Deal Addict
Dec 13, 2007
2026 posts
539 upvotes
Toronto
I would advise not to do it. 20K per year, 15 hr per week, 52 weeks. You end up being paid 25/hr. That is very little even for a salaried employee in IT, but for contractor that is just ridiculous.

You will also quickly find out that working after work on a consistent basis is very very taxing, especially after you realize how little additional income that brings you after taxes.

If you really need the money then tell your old employer you want $60/hr and no more than 10hrs per week.
Deal Expert
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Feb 8, 2014
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slavka012 wrote: If you really need the money then tell your old employer you want $60/hr and no more than 10hrs per week.
+1

You want double your previous rate of pay as a contractor at a minimum. They are not paying benefits, you owe extra taxes becasue they are not paying a portion or you and so forth.
Don't work for your old employer for less than they were paying you before once you factor in all the enhanced costs and paperwork for tax purposes.
In fact in Rand McNally they wear hats on their feet and hamburgers eat people
Deal Guru
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Sep 21, 2007
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Winnipeg
You should ask for more money. The ball is in your court.. they need you more than you need them.. They wouldn't have offered you that proposition if they didn't.
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
[OP]
Member
Jul 29, 2019
316 posts
300 upvotes
It makes sense, I am going to ask for double the hourly rate I was getting as an employee. In the meamwhile I setup my sole proprietorship.
I spend time on RFD,
more than I'd like to admit.
But I console myself stating,
I'd need another job if I wouldn't
Deal Expert
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Feb 8, 2014
26018 posts
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patel21 wrote: It makes sense, I am going to ask for double the hourly rate I was getting as an employee. In the meamwhile I setup my sole proprietorship.
If they try to nibble away at it don't bite, make it a firm offer.
Also revisit it once i year, you want at least inflation level raises, especially if thats what you were getting before.

Also the extra work is not going to be easy for you, starting a new job is a lot OT take in plus you will be working full time then working almost half of another full time job later.

Are you sure you want to do this?
In fact in Rand McNally they wear hats on their feet and hamburgers eat people
[OP]
Member
Jul 29, 2019
316 posts
300 upvotes
Quentin5 wrote: If they try to nibble away at it don't bite, make it a firm offer.
Also revisit it once i year, you want at least inflation level raises, especially if thats what you were getting before.

Also the extra work is not going to be easy for you, starting a new job is a lot OT take in plus you will be working full time then working almost half of another full time job later.

Are you sure you want to do this?
My old company is actually very small, I work with the owner directly. I agree its going to be tough. But I need some money as I am going to start a family and would also like to upgrade from my rusty old condo to something like a townhouse. I am also planning to use CCA to its fullest.
I spend time on RFD,
more than I'd like to admit.
But I console myself stating,
I'd need another job if I wouldn't
Deal Expert
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Feb 8, 2014
26018 posts
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patel21 wrote: My old company is actually very small, I work with the owner directly. I agree its going to be tough. But I need some money as I am going to start a family and would also like to upgrade from my rusty old condo to something like a townhouse. I am also planning to use CCA to its fullest.
If your full time job cannot support your goals then you need to find another one.

I don't know what your new job is paying you or where you live but if this is needed to make things work and they decide to hire someone in the future your screwed so you need to think of this as bonus money. If it is not then you need to make some changes.
In fact in Rand McNally they wear hats on their feet and hamburgers eat people
[OP]
Member
Jul 29, 2019
316 posts
300 upvotes
Yes I agree, its just that it would help reach some goals faster. But I get that I shouldn't count on this income for anything substantial.
I spend time on RFD,
more than I'd like to admit.
But I console myself stating,
I'd need another job if I wouldn't
Deal Expert
User avatar
Feb 8, 2014
26018 posts
10708 upvotes
Socially Distanced
patel21 wrote: Yes I agree, its just that it would help reach some goals faster. But I get that I shouldn't count on this income for anything substantial.
Cool
In fact in Rand McNally they wear hats on their feet and hamburgers eat people

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