Growing up, I always wanted to be in a relationship with someone who was self-employed so that we could reap the best benefits and be a united, superpower duo-couple. I know, this is an odd desire as a young adult isn’t it? Perhaps it was because my dad always was self employed and I could see that his schedule was very flexible. My mom worked as an employee until I was five and then she became a stay at home mom.
I knew that I wouldn’t have what it takes to be self employed completely, as I like the safety net and security of gainful employment. I also really like having benefits, I know that I’m paying for it in having a lower salary (because people that are freelancers tend to make more salary-wise in lieu of benefits such as sick time, vacation time, health and dental benefits). That’s why, when I met my husband, I was happy that he was self-employed, because we could then unit to form my idealized combination. Here’s why I think the best symbiotic combination is the self-employed (by self employed, meaning sole-proprietorship or incorporation) and employed couple:
why the best combination is a self-employed and employed couple
The Health Benefits
Prior to meeting me, my husband went to the dentist maybe once a year or once every few years. One of his really good friends is actually his dentist (who understands self employment as well since apparently he goes to the dentist very infrequently as well!). Since getting married, my husband now goes to the dentist every 6 months regularly because he now part of my health and dental benefits provided by my employer. He now has extra clean teeth!
He also has any prescription drugs that he would need taken care of as well because of my health benefits. In addition, previously when he traveled he would have to buy medical insurance, now that’s also taken care of too thanks to my health care out-of-country emergency medical benefits.
The Tax Benefits
The deductions available to people who are self employed are plentiful, especially in Canada. Canada is very generous to people who work for themselves. You can deduct meals, work at home expenses (this includes maintenance fees, rent, electricity, Internet, cellular phone plans) and you can also deduct your car payments, repairs, and gasoline. Business losses are also deductible against other kinds of income, such as investment income. Because of these tax benefits, the employed partner will also benefit as a family.
Unfortunately, there are some changes from the Liberal government that will be coming which will decrease these tax benefits for small business owners. Million Dollar Journey has a blog post outlining the potential changes and how to mitigate them.
For those with children who are part of an employee/self-employed couple, there is a lot of flexibility. For example, I know a realtor who stays at home with his son on most days so that they don’t have to pay for expensive childcare (because saving for a baby’s first year is enough expenses to worry about) while his wife works her 9-5 employee job. If both were working 9-5 and employed it would be difficult to get time off to take care of children and to clear it with management.
People who are self employed aren’t required to pay into government mandatory deductions such as employment insurance, so for those that are self employed, having an employed spouse is helpful, just in case one income gets hit (as a self employed individual there is inherently more risk with doing business), you have another income to back it up.
Retirement and Survivor Benefits
Finally, should my self-employed husband decide to poison me with arsenic one day, he would be eligible to receive survivor benefits and receive my defined benefit pension, a gold plated pension. For those who are self employed, there is no company provided benefits for retirement, or RRSP matching, or defined benefit pension. There are individual contributions to RRSP and self reliance. However, being coupled with a person who is employed, the self-employed person can receive these benefits should unforeseen circumstances happen to the employee of the couple.
Of course there are downsides to every gloriously depicted scenario. With someone who is self employed, they have a lot of control (well usually anyway) over their schedule. They can take July, August, and December (you know the most popular time to take time off) off if they wish, but for someone who is employed, there may not be as much flexibility, Most employees get 2-4 weeks of vacation a year and it can’t all be when everyone else is on vacation (July or August) unless the employee is a teacher by profession.
Readers, what do you think of the Self-Employed/Employed match? Has it worked out well for you or would you prefer it to be another way (e.g. both self employed or both employed)?