Checklists
Salary or contract, and what is the offer really worth?
A salary is not just the number on the offer. The employer pays half your CPP and 1.4 times your EI, funds a match, covers health and dental, and pays you for weeks you do not work. Put a value on all of it before you compare.
Worth knowing before you start
- An employer RRSP match is free money at 50% to 100% return on the day it lands. A 4% match on $90,000 is $3,600 a year; always contribute enough to get all of it.
- Benefits, paid vacation and the employer’s payroll contributions are typically worth 15% to 30% on top of salary, which is why a contract should pay 25% to 50% more per hour.
- As a contractor you pay both halves of CPP, get no EI, and bill fewer weeks than you work. Above $30,000 of revenue you must register for GST/HST.
- What matters is take-home: two offers in different provinces can differ by thousands after tax at the same salary.
The steps, in order
- 1 Contract or full-time?The hourly rate that truly matches a salary once benefits, CPP, EI and unpaid weeks are counted.Open the contract vs full-time calculator →
- 2 What lands in my account?Take-home pay for the offer in any province, per paycheque.Open the take-home pay calculator →
- 3 How is the bonus taxed?What a signing or annual bonus leaves after withholding, and how to keep more of it.Open the bonus tax calculator →
- 4 If I go contract, what do I owe?The tax and CPP on contract income and the share of each invoice to set aside.Open the self-employed tax calculator →