Personal Finance

Holding Two Fulltime jobs with employer benefits.

  • Last Updated:
  • Aug 2nd, 2019 4:42 pm
[OP]
Member
Dec 28, 2010
322 posts
79 upvotes
Toronto

Holding Two Fulltime jobs with employer benefits.

My spouse works in online education and has had some time to work on other projects.
What would be ramifications of holding two full time jobs - in terms of legal, taxes..
Yes, so there might an offer soon, but the second employer is offering full time only- we tried asking it can be a contractual or hourly rate, but HR is not budging.
Its all flexible schedule - as long work is completed and 4-5 visit /month for weekly Meetings.

Spoke with out basic tax accountant, who mentioned that should have pushed for contract and nothing more. Someone else advised that we should open a corp and then claim expenses etc..

Anyone in such situations, anything to prepare for? At some point we want to buy a house, would mortgage approvals require some more legal work with such arrangement ?
Last edited by Karma2000 on Aug 2nd, 2019 3:11 pm, edited 1 time in total.
5 replies
Deal Addict
Dec 12, 2009
3455 posts
1300 upvotes
Toronto
Legal - you can have as many jobs as you want, unless there are conflict of interest clauses in your employment contracts. (e.g. can't work for the competition, trade secrets etc.)

Mortgage approvals easier with full time employment (T4) than contract (self employed).

Taxes, just fill out your T1 properly & you should be good to go. Some debate over asking them to take extra tax payments off.

Benefits - a tricky one with multiples - you would have to ask the insurance companies. My thoughts are you would run claims through the oldest position first, then the newer one. Even trickier if both spouses have benefits. A PITA for service providers if you want assignment of benefits - suggest you pay bills yourself then have each InsCo pay you.
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Deal Addict
Sep 23, 2007
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Karma2000 wrote:
Aug 2nd, 2019 11:06 am
My spouse works in online education and has had some time to work on other projects.
What would be ramifications of holding to full time jobs - in terms of legal, taxes..
Yes, so there might an offer soon, but the second employer is offering full time only- we tried asking it can be a contractual or hourly rate, but HR is not budging.
Its all flexible schedule - as long work is completed and 4-5 visit /month for weekly Meetings.

Spoke with out basic tax accountant, who mentioned that should have pushed for contract and nothing more. Someone else advised that we should open a corp and then claim expenses etc..

Anyone in such situations, anything to prepare for? At some point we want to buy a house, would mortgage approvals require some more legal work with such arrangement ?
Legally, some employers specifically state on the employment agreement that you cannot hold another job without written approval. Check this first. Other than this, nothing wrong with holding multiple jobs. Personally I wouldn't bother informing the other employer that you have another job. But do be mindful that you can handle the work load. If anyone asks you to attend some company event, you will probably need to make excuses each time.

Legally, there is no well defined definition of "full time" vs "part time". A person can regularly work 20 hrs a week, but work 40 hours during a season. Employment standards generally only care about gross pay, pay per hour, and vacation pay etc.

Accounting wise, your accountant may have an incentive to push you in the contractor director and incorporate. This is so he/she has more business. Claiming for business expense is a common claim, but keep in mind that you should not be looking to "waste" money on things you wouldn't have needed to begin with just for the purpose of having expenses to deduct. Like...in any regular job, the employer would provide the papers and pens. If you need to pay for your own paper and pen, that's not a "benefit". You will have to spend money to buy these items. It is of course superior if an employer pays such costs to begin with. There are certain rules about PSB and some expenses are not allowed.

Tax wise there is nothing special to note. If you were employed by multiple employers, then you simply receive multiple T4s and report them all. You will be taxed on your total income. The number of employers is irrelevant. It is your total compensation that determines your tax obligations. There are also no special rules about "benefits". However, just note that certain employee benefits are taxable. Like...if your employer covers your rent, the value of the rent is counted as taxable income. Most people don't need to worry about these things. In large organizations the payroll department will take care of all the deductions and fill out your T4 for you.
[OP]
Member
Dec 28, 2010
322 posts
79 upvotes
Toronto
thanks for the reply. Any maneuvers to save taxes? I believe we will end up paying ton of taxes as a household.
Read somewhere that some couple bought a franchisee with the extra income (and savings) and then any losses in business were kind of written-off.
I mean is their tax benefit of investing in business or partnership? Just trying to evaluate if the full time is even worth the hassle or keep looking for a side gig that pays contract/hourly even at a lower rate.
Deal Addict
Sep 23, 2007
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995 upvotes
Karma2000 wrote:
Aug 2nd, 2019 3:10 pm
thanks for the reply. Any maneuvers to save taxes? I believe we will end up paying ton of taxes as a household.
Read somewhere that some couple bought a franchisee with the extra income (and savings) and then any losses in business were kind of written-off.
I mean is their tax benefit of investing in business or partnership? Just trying to evaluate if the full time is even worth the hassle or keep looking for a side gig that pays contract/hourly even at a lower rate.
Opening a corporation to execute a work contract is not an investment. If you report to the CRA that you had to buy a Porsche 911 to run your business, most likely that expense will be substantially disallowed. You may hire people to help you complete the work but it would be silly to pay people such a high rate that your overall position is a loss in a service business.

A franchise business would be totally different. Probably talking about incorporation, then using the corporation to pay for all the franchise fees, renovations, inventory, advertising, salaries of staff. If they are losing money from the business, the tax write off is hardly a "benefit" they are happy about. It's not like you would fail a business deliberately to pay less taxes. And corporate tax (I assume they did the franchise as a business) is separate from personal tax. I don't think anyone is insane enough to run a franchise as a sole proprietorship.

In terms of saving taxes, this is a more complex topic. In theory yes. But I find that most likely you may end up paying more in professional fees and in total taxes. By opening a corporation to receive the income, you can choose to pay yourself later. For example, you can earn $100k in one year from a work contract, leave the money in the corporation, and pay yourself $10k over 10 years. $10k annual income on the personal level will basically make your income tax $0 as it is low income. However, note that in the year the corporation earned $100k, the corporation will pay taxes on the $100k.

This is an over simplified example. Realistically I don't think you would have a $100k contract, and deliberately choose not to work for the next 10 years. Realistically, the benefit of gunning for more contract should always be more valuable than any tax considerations.

If you have family, one thing you can do is hire your family members. So basically you distribute the income to your family, and issue them all T4s (and pay CPP/EI). The salaries you pay will reduce your corporation's tax since it is an expense for the corporation. Each person you pay will report the income on their personal level. Be careful that they are doing real work. Some recent rules introduced in the past years have made this kind of thing harder to do.
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Dec 12, 2009
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BananaHunter wrote:
Aug 2nd, 2019 3:42 pm
Each person you pay will report the income on their personal level. Be careful that they are doing real work. Some recent rules introduced in the past years have made this kind of thing harder to do.
Reminds me of a story. I've got an Amerifriend that did audits for the IRA. They were doing an onsite audit of a company where the wife was on payroll. After 3 days he had noted that she spent most her time surfing the web and doing her nails. She never answered the phone and none of the employees interacted with her on a work level. Towards the end of the 3rd day my Amerifriend asked her where the men's washroom was. She didn't know. That was the final reason for his decision to disqualify the employee expense.
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