The transition from consultant to full time employment is often easy, particularly if you are hired by the company that you are consulting to. Despite the ease of transition, there are a number of points that you must take into account:
Heed the Health Bug
As a consultant, you have your own health insurance coverage and likely a disability plan of some type in place. Your new employer will provide you with health benefits coverage, and you can save a little money by terminating your own. Give a little extra thought before terminating your disability insurance, however. This is often age and health based, and if your new job lasts only long enough for your health to change or for you to reach a milestone birthday, you may be looking at a significant increase in costs to buy back in.
Invest in a Backup Plan
In addition, you must have a 2 or 3 month contingency fund set aside for easy access to cash, just in case there is a gap in the contract work. Do NOT rush out to spend this contingency money as soon as you start your new job.
“Sixty-four percent of people intend to cut indulgent spending this year according to a new survey by HSBC Bank USA […] This month, half of consumers plan to cut down on non-essential spending like eating out, going to the movies and remodeling, according to the report.” [Haley, CNN]
Invest it for a while, possibly a few months, to ensure your new employment is what you had in mind.
Closing Your Company
Likewise, hold on to your incorporated or limited company for a few months, or longer if there is a possibility for after-hours work elsewhere. You WILL need to inform the Federal tax people that you will no longer make your quarterly tax installments, as well as close your various GST / PST accounts, business registration etc. About.com provides a useful checklist to help you with closing down your Canadian company here.
Heed the Health Bug
As a consultant, you have your own health insurance coverage and likely a disability plan of some type in place. Your new employer will provide you with health benefits coverage, and you can save a little money by terminating your own. Give a little extra thought before terminating your disability insurance, however. This is often age and health based, and if your new job lasts only long enough for your health to change or for you to reach a milestone birthday, you may be looking at a significant increase in costs to buy back in.
Invest in a Backup Plan
In addition, you must have a 2 or 3 month contingency fund set aside for easy access to cash, just in case there is a gap in the contract work. Do NOT rush out to spend this contingency money as soon as you start your new job.
“Sixty-four percent of people intend to cut indulgent spending this year according to a new survey by HSBC Bank USA […] This month, half of consumers plan to cut down on non-essential spending like eating out, going to the movies and remodeling, according to the report.” [Haley, CNN]
Invest it for a while, possibly a few months, to ensure your new employment is what you had in mind.
Closing Your Company
Likewise, hold on to your incorporated or limited company for a few months, or longer if there is a possibility for after-hours work elsewhere. You WILL need to inform the Federal tax people that you will no longer make your quarterly tax installments, as well as close your various GST / PST accounts, business registration etc. About.com provides a useful checklist to help you with closing down your Canadian company here.
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