- What are the pros and Cons of each? Why the vast difference in the earnings?
I think pros and cons are hard to say without having hard numbers to compare.
Pros of FTE are basically employer administered benefits, a stable paycheck, simple tax return filing, additional benefits like RRSP contributions, EI, bonus, stock options, additional health and life insurance etc. But taxes you pay are generally higher.
Pros of incorporation are that you can (probably) reduce your tax liability significantly by working with a tax consultant, turn it into a significant advantage in terms of attracting new contracts once you have setup. But you’ll need to wrap your head around the everything related to having a corp (it’s not too complicated). You’ll need to figure out how you’ll pay yourself, if it is suffices your requirements for current and future plans (if you plan to buy a home, get a home loan, what kind of income do you need to show?)
If you can work remote, then Incorporating means you’ll have better chances at getting remote contracts from US, since a big chunk of jobs tend to be from those companies that don’t or can’t have employees in Canada.
- Is it better to be a full-time employee or get incorporated?
The only way to compare which option is better, is if you have an offer to work with an employer and the employer gives you both options like:
- if you work as an employee you’ll get $96K per year ($50 per hr)
- if you work as a contractor you’ll get $60 per hr
If you get such an offer, then you can compare and try to figure out which one works out better for your situation.
- Roughly the procedure for incorporation? (would appreciate any reliable links)
I dont know the details of how to incorporate. I got it done through a CPA.
Does getting incorporated equate to taking care of your health insurance & savings on your own without any government assistance
I don’t think there’s any govt assistance in either case. Yes, you’ll have to get additional health / life insurance and figure out how to save up (either invest the savings) if you go for corp. This is a lot simpler in Canada since you don’t have to jump a lot of hoops to get health insurance coverage as in the US.
This is my understanding. Make sure to chat with an accountant / tax advisor to evaluate what’s your best option.