Entrepreneurship & Small Business

Newb question about taxes/income/living

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  • May 25th, 2015 7:24 am
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[OP]
Banned
User avatar
Aug 16, 2014
246 posts
49 upvotes
Toronto

Newb question about taxes/income/living

Hi folks,

OK - I am acquiring clients for my business and am now trying to know when I can quit my job when my income level will be the same.

For instance, if I take home $2300 every 2 weeks from my job - what do I need to earn in company billings to be at the same level with a sole proprietorship? I am currently at $4000/month and charging them 13% HST and can live off $3600/month.

Any advice?
3 replies
Sr. Member
May 29, 2012
604 posts
247 upvotes
Southern Ontario
so if you take home 2300 every 2 weeks
2300/2= 1150 per week
1150 * 4 weeks= 4600 per month net
4600 * 12= 55200 per year net
I would GUESS you gross approx. 80 000 per year
80,000 / 52 weeks = 1538 per week

So when you can earn 1538 per motnh from your business after expenses you would roughly be even with your job
[OP]
Banned
User avatar
Aug 16, 2014
246 posts
49 upvotes
Toronto
Thanks Tony, at the end of the year am I just giving the gov't their 13% cut or do I own them more?
Deal Fanatic
User avatar
Nov 19, 2004
9139 posts
2045 upvotes
Cambridge, ON
Whatever you gross now, if you gross the same as a sole proprietor you pretty much come out the same. The difference being you can claim some expenses but on the other side you have to pay both halves of the CPP. So if there are no expenses to claim, then you need the same gross plus half the CPP . You still pay the same income tax.

The 13% HST is not really a factor since it is a pass through cost. You would get some credits for HST paid on expenses.

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