Guys,
Need some inputs around opening up an employment / staffing agency. I am in IT and having a full time job but want to do partime business. Got the idea of opening up an employment / staffing agency - with so many immigrants coming to Canada, think it would be a right & demanding option...Also this should not take much investment and I am already used to interviewing and evaluating candidates as part of my job responsibilities.
Any inputs on how to go about the same or any franchise option with any major successful player I can explore or free lancing option ? Any feedback or suggestions and pros & cons who has done or doing this Business will also help...
Appreciate any inputs you could provide to me around the same...
Regards,
Vik
Yes, it is a good business but there are lot of things, you must keep in mind.
1. There are around 30000/- employement agencies in Ontario. So there is cut throat competition. You have to quote low rates than your competitors in order
to grab the business.
2. For supply of 20 employees, you should have around $ 30000 in your pocket to pay the employees because the companies will pay you after one month time lag.
But once you complete one cycle, then you will be habitual to it and everything will run smoothly.
3. There is also risk that some of companies donot pay you on time or may declare bankruptcy. In every case you have to pay the employees as you are their employer.
4. You have to deal with following Government agency and to pay the tax and dues:
1. CRA : Payroll remittance (Monthly), GST/HST(Quaterly) , Income tax (Once a
year)
2 WSIB ( The rate is around 4.93% of the Gross payroll)
3. EHT if your payroll bill exceeds $400000/- (It is around 1% of the Gross payroll)
4. Almost every year, WSIB people uses to audit employement agencies.
Payroll : You have to pay employer's contribution for CPP & EI
WSIB : You have to pay 4.93% of payroll as WSIB.
There is a lot of work involved but with the help of good Accountant, you can handle it. That is not a bring problem.
Companies will pay you flat rate. All other dues and dealing will be dealt by you.
You also have to take two or three vans on lease to pick and drop the employees to
their work place. Drivers also need to be hired.
So these are the basic things, which you have to take in your consideraton.
If you have initial money and ability to take risk, then it is good business.
I hope it will help you.
Thanks.
Rajesh V.
I could understand everything - but the need for vans.
Solid points, Rajesh.
I just want to speak specifically about some of the tax implications of such a business. Rajesh mentioned the compliance requirements so I won't repeat that again.
The one benefit/advantage of opening your own business is that you can operate it from your home and claim a portion of your home expenses as home office expenses to reduce your income from the business. Whether you incorporate this business or own it as a sole proprietorship, you will have some opportunities to engage in tax planning and reduce taxes.
You will be able to claim a pro-rated portion of your home's expenses like insurance, mortgage interest, utilities, maintenance, etc. If you have other family members serving as shareholders and/or employees, you can perhaps give them a salary/dividend to split the income.
Something to be mindful of, I suppose...
-----------------------------------------------------------------
Madan Chartered Accountant team
http://www.madanca.com" rel="nofollow">LINK
Advertise Contact Us Privacy Policy and Terms of Usage FAQ Canadian Desi © 2001 Marg eSolutions Site designed, developed and maintained by Marg eSolutions Inc. |