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Depending on which country you and your employing entity are in, this could end up netting you all of the disadvantages of self-employment with none of the bene
by jsty 7y ago
Depending on which country you and your employing entity are in, this could end up netting you all of the disadvantages of self-employment with none of the benefits.
E.g. in the UK, HMRC will determine your tax status based on, amongst other things, how much control your 'not employer' has over the work you do. So if GitLab were to treat you as just another member of the team, you'd run a big risk of ending up treated as an employee for tax purposes, but without any of the rights accorded to employees.
TLDR - talk to a tax professional who understands the regulations in both your and your "not employer's" jurisdictions.
- scarecrowbob 7y agoI agree with this comment. I'm wholly in the US, so maybe my experience is unique to me. Bit I was freelancing for quite a while and then one of my clients ended up buying all my time. IMO, there weren't any benefits from remaining a contractor once I was working full time. We ended up cutting my pay a bit to account for a shift in taxes and that worked out better for both me and my employer.
- ex_ex_nihilo 7y agoIf you were individual 1099, then no there is no advantage really. And you have to pay self-employment tax. If you were B2B 1099, there are ENORMOUS advantages. My average effective federal tax rate on ~$250k/yr is right around 1.8-2.2% because I'm 1099 B2B and have a great tax attorney and accountant. Obviously on paper I make like $30k a year or something stupid like that, I don't know. My attorney adjust things monthly or quarterly as necessary, starts new LLCs or whatever is required.