[squiggs96]

I cannot be more clear on this: Talk to an accountant that specializes in this. Understand you are going to pay money for this service. The reason you do is because his/her advice is worth it. There are so many things you need to be aware of that can hinder you and there are so many things you can take advantage of. Do not try sourcing this for free on the internet, as you'll get what you pay for. I know of a great number of people that have tried to set these up themselves, talked to a family friend who "does taxes", and ended up in a much worse spot.

Some general things about being a contractor in the IT world:
There is a reason that businesses want to put their IT departments as contractors. None of them are for the benefit of the contractor. They don't want to have to pay CPP, EI, severance, and/or overhead. That's fine. Where the IT contractor gets screwed over is they are usually deemed a Personal Services Business (PSB). This means the earnings are taxed at the highest marginal rate and many of your deductions are denied. This is the single biggest reason to hire an accountant who knows this and can help you navigate it. If you google 'IT contractor personal services business' you will find a ton of pages on how much this situation can hamper you. This is much more complicated than a simple employee versus contractor test.

The accountant you hire can walk you through compensation options. There are benefits and disadvantages to taking a salary out versus dividends. There are lots of planning opportunities to minimize your tax position. I own a company. How I take money out could be vastly different than how you want to take money out and what your cash flow needs are. Asking for advice on this, or any forum, could lead to sending you down the wrong path, because our situations could be vastly different.