Why more Canadians are taking on side jobs
Rise of the moonlighters: Why more Canadians are taking on side jobs and how to make it work for you
Melissa Leong | Financial Post | September 16, 2016
Arthur, a financial analyst making about $80,000 a year, often arrives at his office at 6 a.m. In addition to his 40-hour work week, he works two 12-hour shifts valeting vehicles, bringing in at least $350 a week in extra cash.
“The money is just too easy to pass up,” says the 36-year-old Brampton, Ont. father. He declined to give his real name to protect his jobs. “Originally, I did it to supplement our income when (my wife) went on mat leave…. Now we have daycare and that’s pretty much a mortgage payment each month and that’s why I’ve kept it up.”
He allocates the money from his side hustle to child care, debt repayment, vacations and RESP and RRSP contributions.
While part-time work isn’t new, the side hustle has become increasingly associated with millennials, whether they’re chasing a passion, trying to cover the high costs of home ownership or wiping out the estimated average $25,000 in student debt. And with the rise of the on-demand gig economy and e-commerce, experts say that we’re going to see an increase in moonlighting.
“You’re going to see more and more of it because people are seeing that work can be done non-traditionally,” says Faith Tull, senior vice-president of human resources at HR consultants Randstad Canada. “Work is digitalized now. You don’t have to be physically at a workplace. I met with a lady who worked full-time and in the evenings, she took calls for a pizza place from home.”
The percentage of workers with multiple jobs has more than doubled in the last 40 years to 5.3 per cent last year, according to Statistics Canada. In 2015, almost 959,000 Canadian worked at least two jobs. Most of my friends moonlight: the architect who works as a real estate agent, the financial planner who operates a dance school, the teacher who works weekends at a steak house.
Many moonlighters, Statistics Canada says, had jobs (whether main or sideline) in business administration, office support, education or health. About 27 per cent of moonlighters last year listed retail as one of their jobs.
“In my experience, folks are moonlighting simply because it’s a financial gain for their family,” Tull says. “A lot of times it’s of a temporary nature to get somewhere.”
Whether you’re driving for Uber or selling sock puppets on Etsy, it’s never been easier to boost your bottom line on your own terms; however, you should never be flippant about your side work.
Career experts suggest that you approach your moonlighting gig like you would a carefully planned meal (you wouldn’t want to ruin your boeuf bourguignon by scattering Cheetos onto the plate as a side). Ideally, your side job should have a purpose other than offering extra cash, such as beefing up your resumé or providing benefits (Starbucks and Costco offer benefits to part-timers, for example).
Check if your employer has a policy about secondary employment and consider disclosing your side job to your boss; talk to her about how you’ll remain effective at your main job and how you’ll continue to make it a priority.
Also, make sure that your multiple jobs don’t put you in awkward positions with your employer, co-workers, clients or customers. (It might be weird if you walked into a room for a massage and found the practitioner was your accountant.) Your side gig should not put you in a conflict of interest with your main job or put that full-time job, or even your well-being, at risk.
“It’s not only a physical and emotional toll on the individual, it’s a toll on the family…. You certainly can’t give it your all 24-7,” Tull says. Early in her career, Tull worked a retail job to supplement her $20,000 annual income. “It really took a toll. I had to give it up because I didn’t want it to allow my full-time job to suffer.”
More than 40 per cent of multiple-job holders last month reported to Statistics Canada that they worked more than 50 hours a week. Consider whether those sideline hours are the best use of your time.
It’s not only a physical and emotional toll on the individual, it’s a toll on the family…. You certainly can’t give it your all 24-7.
“If you’re conscious of the fact that you need to start somewhere and work your way up, it’s important that you put in the time and give the focus (to your main job) rather than trying to do multiple jobs,” says Sheryl Boswell, director of marketing with Monster Canada. “If (the side job) is for a financial gain, make a goal to complete it in a period of time. Hopefully by then, you’ll have achieved your goal and secondly, you’ll have made advances in your career to allow you to stop.”
The side money should not be taken lightly either. Moonlighters need to educate themselves on the implications of extra income and to make the second (or third, or fourth) cash flows a part of their greater financial plans.
“You just want to make sure that you’re aware that you can put yourself in the next tax bracket,” say Lee Helkie, a certified financial planner with Toronto-based Helkie Financial and Insurance Services. Once you hit the next tax bracket, any money earned above the new bracket is taxed at higher rates. So, if you’re not careful, you might not actually come out that much further ahead, despite the extra work.
Fortunately, people who freelance or run their own business can take advantage of deductions to reduce their taxable income, Helkie adds. For example, if you spend $2,000 on materials, equipment, etc. to get your online sock puppet shop going and you make $5,000 that year, you can deduct the $2,000 as business expenses and only pay taxes on $3,000. So track your income and keep a record of all of your expenses.
Hoard receipts for deductions (you can deduct expenses for advertising and promotion, for example, and claim 50 per cent of your entertainment bills). Opening a separate bank account and credit card for your business may help you to be better organized.
Finally, automate your savings or earmark the earnings from your moonlighting gig.
“If you’re going to work extra time, make sure those dollars are going directly to your purpose,” Helkie says. “Make sure that side job doesn’t have to become a permanent job because you start spending a lot more in lifestyle expenses.”
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