Decision Guides
Employee vs Incorporated?
How to compare being an employee with running an incorporated practice.
Introduction
Staying employed or incorporating affects your income, security, freedom and time. This guide helps you consider the trade-offs beyond gross income alone.
Important considerations
- Higher gross income doesn't always translate to higher net income after expenses and taxes.
- Incorporation adds administrative, accounting and cash-flow responsibilities.
- Employment benefits (insurance, paid leave, pension) have real monetary value.
- Freedom and autonomy aren't quantifiable but remain essential to evaluate.
Common mistakes
- Comparing a consultant hourly rate to a salary without accounting for unbilled hours.
- Ignoring employer benefits and pension contributions.
- Underestimating accounting and payroll-tax costs.
- Forgetting slow periods or non-billable time.
Frequently asked questions
At what income does incorporating make sense?
It depends on your business expenses, tax situation and personal cash needs.
Does incorporation always mean more freedom?
Often yes, but it also demands discipline and an administrative workload.
Should I consult a professional?
Yes — this tool compares scenarios but doesn't replace professional tax or legal advice.
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