Asked
I'm going to be doing some private work for a physician, I guess it would be like contract work? Wondering how much percentage wise I would need to set aside for taxes? Is the percentage based on the actual earnings or ??
Clint’s answer
Hi Tara.
Based on the comments it looks like you have another source of income, You'll be contracting out, and there is a comment about GST in here as well.
Depending on your income, it would be wise to save 30% or more for the income tax side.
GST, the $30,000 amount is correct, however you don't have to apply for a GST number and start charging until the first quarter after earning $30,000 in a four quarter period. This is a rule that has a ton of confusion. Feel free to reach out and I can explain further.
It would also be advisable to track any and all expenses you incur while earning this income.
Vehicle expenses, cell phone, home office, supplies etc are all good things to keep record of so you can lower your tax burden. Especially that vehicle one. Fuel, insurance, repairs, and depreciation are all deductible.
Hope this helps.
October 24, 2024
Update, October 2026: The timing is more specific than this. Go over $30,000 in a single calendar quarter and you charge GST on the sale that put you over. Go over $30,000 across four consecutive quarters and you stop being a small supplier at the end of the month after the quarter you crossed it in. Either way, you then have 29 days to register.
From Ask Clint: real questions from a Canadian public finance forum, answered by Clint Cole. Names are changed. This is general information, not advice for your situation, and rules and dollar figures may have changed since Clint answered. Terms