Working as a locum can come with many tax advantages. This chapter will help you start thinking about how to maximize your take-home revenue and set aside enough money for taxes.
5.1 Should You Incorporate?
Many doctors incorporate and locums are no exception. When you incorporate, you create a fresh legal identity (the corporation) that becomes the owner of your medical practice.
When physicians incorporate, it is usually to benefit from tax advantages, including income tax savings and tax deferral. These benefits are often, but not always, significant for doctors.
NOTE: It is essential to speak to a qualified advisor to ensure that you have taken into account all of your individual circumstances before deciding whether to incorporate.
5.2 Four Tax Tips for Locums
Working as a locum comes with many tax advantages. However, it also comes with a learning curve when it comes to taxes. Here are four tax tips to consider when working as a locum tenens:
- Track your Expenses
- Deposit locum earnings in a business bank account
- Look like a contractor to the CRA
- Set aside 40% of your earnings for taxes
Additional reading: More Accounting and Tax Tips for Locum Doctors
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