Contract Work versus Regular Employment

There are a great deal of advantages and disadvantages that come along with both contract work and regular employment.  If you are struggling to determine which one is right for you, then you might want to take these things into consideration:

Regular Employment

The Pros:

  • Offers many benefits including health care, insurance, RRSP contribution matching, and much more
  • Offers a steady job security in most cases

The Cons:

  • Higher taxes in most cases because employees are not going to have as many tax deductions
  • Sometimes the work may not be the work that you want it to be
  • Lower pay per hour than most contract work

Contract Work

The Pros:

  • Higher pay per hour than most regular employment
  • Offers a high level of flexibility when changing from one job to the next
  • Gives you more tax deductions, such as claiming your home or vehicle expenses as work related expenses

The Cons:

  • The benefits may vary from one contract to the next
  • Contracts are not always guaranteed, and some may be terminated early
  • Unpredictable income
  • Constant need for staying competitive

When you think about it, regular employment and contract work don’t have very much in common at all.  Contract work is basically like working for yourself.  There are some risks involved, but it can usually give you a higher payout for your time worked.  Regular employment can offer you less risk and more security, but it also may not pay out as much in the long run.  These are all things that should be considered when you decide whether you should do contract work or look for full time employment.