# Contractor umbrella companies



## lez_s (Jun 28, 2013)

Hi all,

New to the site so hope I'm posting the right places.

I'm now in Vancouver and thinking about going back to contracting. I contracted in the UK for 7 years and really liked it so thought I would give it ago around Vancouver as there seem a lot of IT contracts here.

My question is, are there Umbrella companies here? I've looked on Google but can't find anything - maybe they are called something different over here?


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## Liam(at)Large (Sep 2, 2012)

lez_s said:


> Hi all,
> 
> New to the site so hope I'm posting the right places.
> 
> ...


Explain what it is, I've never heard of it.


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## lez_s (Jun 28, 2013)

An Umbrella company acts as an employer to agency contractor and they deal with all the taxes, expenses etc. If you go via an accountant you have to set up and pay for your own company and process all the money made via your own company.

en.wikipedia.org/wiki/Umbrella_company


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## Liam(at)Large (Sep 2, 2012)

lez_s said:


> An Umbrella company acts as an employer to agency contractor and they deal with all the taxes, expenses etc. If you go via an accountant you have to set up and pay for your own company and process all the money made via your own company.
> 
> en.wikipedia.org/wiki/Umbrella_company


I don't know anyone who does it this way in Canada. I did freelance for 5 years in IT in Toronto, worked with a lot of other freelancers and contractors over 20 years in IT (mostly in Canada). You just register yourself as a sole proprietor, get your tax number(s), bill tax, remit tax and declare your income and pay tax against it as appropriate (plus great write offs!)... No company required.


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## lez_s (Jun 28, 2013)

Thanks for that. Its so different over here than the UK. Now I have an idea what I'll looking at and what to search on Google.


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## Liam(at)Large (Sep 2, 2012)

Sole proprietorships and partnerships

How To Set Up a Sole Proprietorship in Canada | eHow

Make sure you track costs for everything business related (gas, car service, paper, ink, postage, computers, etc...) and all your living costs (mortgage, property tax, rent, utilities) as you can write off percentages of each against "the business", including I believe 1/5 of your home space and costs.


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## lez_s (Jun 28, 2013)

Wow, thats a lot of stuff you can write off.

What I'm trying to find out is what percentage of the wage would I get back. In a perm job it works out to be about 72%. I know its a hard question to answer as its all different, but trying to work out if its better to contract.


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## Liam(at)Large (Sep 2, 2012)

I know a colleague of mine in TO was on about 95k freelance/contract, and his accountant worked out in order to go full time salary and bring home the same amount he was looking in the range of $120k.


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## lez_s (Jun 28, 2013)

Sounds about right. My idea is to contract for a few years and save money up and then go perm.

Thanks for the info. Just got to wait for my PR to come through and then I can move to contracting.


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