During a discussion with a group from the Canadian infosec community, the
group repeatedly lamented the state of salaries in Canada. It seemed to really
boil down the fact: employers seem to be unwilling to pay for top talent.
It’s competitive locally!
During some discussion, it seemed that the job postings that were being shown
had a re-occurring theme of a senior role in Canada being on par with a
mid-level role in the US. The age old “this is what the market pays here”
salaries are being trotted out as business as usual. This completely ignores the phenomenon
of remote work. This isn’t even a new thing. Remote work means that the
workforce is global and that companies must compete globally for that talent.
Where is the talent going?
Everywhere- but mainly the US, into markets that are starved for talent, or at
least ones that are willing to pay more than at home. Some of the opening
markets for remote workers are among the most expensive in the world to live.
Remote work has really put Canadian employers in a position where they will
need to rethink the compensation that they are willing to offer. You want
someone to commute for 55 minutes each way, and sit at a computer, that’s
being used to connect to servers in a far off data centre (or even one down the
hall)? For 30% less than an US counterpart? What is the benefit? Are you
measuring success by output, or by asses in seats? (Remote work is an entire
Where is the talent coming from?
Well, the focus here really is global, and in my experience, the talent is
being globally sourced. This does lead to an interesting side effect is that a
global supply may increase competition and drive down salaries overall. This
may take time to manifest itself, however, if you look at offshoring, this is
what has already happened as a cost saving measure.
Also, there is the recognition that this a two-way benefit:
- Access to global labour markets.
- Reduced need for office space.
- Ability to pay less based on cost of living of remote employees.
- Remote work benefits.
- Access to markets with higher salaries.
A Common Practice (at least on the East Coast) – Unicorn Hunting
Unicorn hunting is the practice of writing a job description that is so
completely outlandish that nobody can hope to satisfy all the requirements.
This results in applicants that won’t have all the qualifications, because
the applicants that do have all the skills won’t work for the low compensation
being offered. The failure to meet all of the requirements by the applicants is
then used as a bargaining tactic when it comes to salary negotiation.
Several years ago, I saw a local ISP looking for a Senior Oracle DBA. There was
a lengthy list of requirements for all the Oracle products, and on top of that,
another list of unrelated technologies that were requirements. Upon asking
someone with inside knowledge, it was revealed that they knew that the
candidate didn’t exist at that compensation range, but they could get someone
even cheaper by leveraging the requirements against the candidates that did
A very recent unicorn hunt that I’ve witnessed: HPD CISO
Working Remotely… Internationally?
Absolutely! The “HR/Payroll as a Service” model is amazing for this: you get all
of the normal things with an in-country business (benefits, tax withholdings,
etc…), and the company that you work for gets an invoice. That’s it. If your
company isn’t interested in the HRaaS model (they should be, since it opens
labour markets…), you can opt for being an independent contractor, but there
is some additional work to be done for taxes and benefits.
Considerations of being a contractor
- Healthcare insurance
- I had a nightmare of a time with the provider that I initially chose because someone made a typo in my billing details. This went on for months!
- Do you have a spouse that has a benefits package that you can use?
- You must do your own withholding for taxes.
- You must carefully plan your own CPP contributions, if you wish to pay CPP.
- There are fees associated with this: legal, corporate tax returns.
- When I went through this exercise income less than $180k annually was of marginal benefit. It would take at least two years to break even after incorporation fees, and this was with a 100% dividend plan through a family trust.
- Dividends and Family Trusts
- The rules around family trusts are changing, and the ability to shelter earnings in that model are decreasing.
- You can opt to not pay CPP in a family trust model, which means that you also do not qualify for CPP on the money received from a divided.
- Revenue and payments
- If you’ve incorporated, but only have one customer (your employer), you’re considered a “personal services corporation” by the CRA. This negates most of the incorporation benefits.
- Employment Insurance
- You’re self-employed and may no longer qualify for EI. This may depend on the classification of corporation by the CRA. Some light EI reading
- Mortgages and Loans
- Your income model has changed now. A former contractor was able to secure a mortgage after close about a year of committed income. You should talk to a banker about these implications.
tl;dr Get a good international tax accountant. Make sure that you understand
all of the implications. This article is not financial advice, but rather, it’s
a list of questions to ask.
Are there exceptions?
There will be always be exceptions, and these points of view are anecdotal, but
seem to be holding true over time. There are some great Canadian companies out
there that go to tremendous lengths to get the best people.
Next time you’re looking for a job, don’t be afraid to go looking at companies
that you’ve always wanted to work for! Many of them are remote friendly, and
may already have Canadian employees! If they don’t have Canadian employees
already, you could be the first.
- I live in Canada.
- I’ve been working for US companies since 2012. One based in Maryland, and the other based in New York.
- I’m not a tax accountant and this is not advice of any kind. Consider this research for questions that you’d like to ask a tax accountant or lawyer. I consulted with both when researching.
- You’ll notice there are lots of observations here, but not much data. I hope to remedy this.
*** This is a Security Bloggers Network syndicated blog from Invisible Threat authored by Invisible Threat. Read the original post at: https://www.invisiblethreat.ca/post/canadian_employers/