Save. Spend. Splurge.

Is it worth it to be self-employed in Canada and getting maternity or sick leave benefits?

As a self-employed person living in Canada, I pretty much assume the following:

  • If I am sick while on contract, I lose money (I charge by the hour; no show, no pay)
  • If I have to take time off work (as in refuse contracts) because I have a kid, I lose money
  • If I need to go to the dentist or the ophthalmologist, it comes out of my pocket (100%)
  • If I go to the doctor, it’s covered by the government (phew!)


While I am working, I am not allowed to get sick, and I should plan having kids AROUND contracts (yeah like that’s going to happen).

Anyway, so when I heard they I would POSSIBLY be able to get maternity benefits while being self-employed on Employment Insurance (EI) in Canada, I got excited.


Exactly my reaction.

Then I read this Money Sense article by Gail VO:

  • You have to earn a minimum of $6222 a year
  • You pay about 1.83% of your money towards Employment Insurance (EI)
  • The maximum you pay towards EI is $839.07 a year (works out to $24,000 salary)
  • EI is taxable income

I agreed with these points until I read the next ones:

  • Once you sign up, you’re in it for good — can’t “opt out”
  • If your business goes under, you can’t collect unemployment insurance
  • If you make money while self-employed, your EI cheque decreases


Gail basically lays it out in the post exactly the way I would have written it with these final words:

Of course hardly anyone who is self-employed has the luxury of taking a year off from their business.


If you take only the first 15 weeks, you’ll be coughing up a lot of money for $7,275 in benefits. You’d have to have three mat leaves and some sick time off just to break even.

Thank goodness for Gail.

Now I don’t have to do the math, because navigating the Government of Canada website is a mess.

I’d also basically need to pop out 3 kids at 15 weeks each, and call in some “sick time” while on contract just to break even.

Sounds like a scam to me. I’m just going to have to save up a motherlode of cash for when I do have kids, and I will most likely take as little time as possible off while on maternity leave if there are contracts waiting to be filled.

Otherwise, I’ll spend the time with the baby until I get another contract.

(Or take a job at a company THEN get pregnant.)


(This might very well be me one day in the future while working at a company on maternity leave.)

I’m curious how other self-employed people have dealt with this, not necessarily just in Canada. 🙂



  • Elle @ ForHerByHer

    Having been self-employed for a few years, this is something I stress about all the time. So stressed that I actually started saving in my own “maternity leave” bank account. For the same reasons you mentioned, this new ‘plan’ sounds like a scam to me as well.

    I’ve actually started thinking and planning of ways to automate my income as well so that I have a decent stream coming in. My biggest advice is to plan WAY in advance.

    Oh and I agree, navigating the Government of Canada website is one of the most frustrating things!

  • Sarah Li Cain

    THIS is actually what I’m kind of going through. Hubs and I are ready to start a family, but international school contracts (unless you work for the BIG ones, AND it depends on the country) don’t really have anything in their clauses that deal with maternity leave. It’s sad, many of the local staff I know try to give birth in the summer so they don’t have to worry about such things. So basically if I have a kid here and I want to spend time with him/her, I can a)quit b) take “sick” leave for a week or so and then go back to work.

    I guess the advantage that childcare is fairly cheap here in China, but if one of you has to quit their job to take sick leave (which means you are let go of your contract if you are physically unable to work) it just doesn’t sound good financially.

    • saverspender @ save. spend. splurge.

      @Sarah Li Cain: I’d agree with that. I think the sacrifice couples make living abroad not as citizens, are that they have to figure out how to make it work with the laws there regarding employment.

      I went through similar thoughts while in the U.S. I would have had to switch my visa to a spousal one to stay in the U.S.

  • Cassie

    My sister has been self-employed since she was 19, and she had her daughter just about 2 years ago now (at 25). She ended up passing the majority of the management responsibilities temporarily to one of her employees so that she could take a “mat leave” of sorts. I believe she still drew a pay cheque from her company, it was just smaller. This worked for the first little while, but the employee was screwing up royally, so she was forced to take the reins back earlier than anticipated to prevent her company from collapsing. Given that you work on a contract basis this obviously wouldn’t work the same way for you. You could pull a small salary from your company during that time frame, but realistically I may just be better to bulk up your savings account like you mentioned in your post.

    • saverspender @ save. spend. splurge.

      @Cassie: I don’t take a salary anyway as a freelancer. I only take dividends at the end of the year from my company.

      This means if I don’t work, I don’t get any money, period. Salary or not. I could draw on the money in my company in retained earnings but I’d rather not. It’s my retirement nest egg.

  • MelD

    Depending on your point of view, one of the possible “disadvantages” of Switzerland is paying for health care. Basic health insurance is obligatory for everyone, this varies depending on your age, gender and where you live in the country. We pay about CHF 350 (directly comparable to US and CAN $) each a month (late 40s). Children pay a lot less up to 18, between CHF 75-100, from 18 that will probably be more like 250-300. With one nearly 18 yr old left at home, that is CHF 1000/mth just in basic health insurance. There is a “franchise” cost level you can choose, where you pay the first e.g. CHF 300 or 700 or whatever of the year’s medical costs yourself, thereafter you pay 10% of medical bills. It isn’t wholly inclusive, and less so as time goes by (homeopathy and natural medicine are no longer covered, for instance) and it’s getting slightly more expensive each year, but on the whole, we have excellent medical care and you can choose various models that will vary the cost, too (like opting to stay within your canton for care or only using certain doctors or clinics). Obviously, semi-private or private health insurance costs more.
    It still works out a lot cheaper than Germany, which I know as a fact. When I see the French and English systems, they make me a bit uneasy (I had first-hand experience with my mom in the English system last year). However, the care my mom had turned out to be fine, mostly because the people were lovely, but the medical care was ok, too. You do hear a lot of bad things, though.
    Unlike the rest of Europe, we have very little in the way of maternity support, though. You can take 14 weeks at 80% pay if you’re employed but that’s about it – and you’re not allowed to work for the first 8 weeks, anyway.
    Other countries in Europe have systems where you can stay home up to 3 years (Germany again) or extended support and allowances if you have at least 3 kids (France) and so on. But there are always going to be loopholes and not everyone can automatically have such benefits, wonderful as they sometimes sound. Average salaries in the EU are lower than Switzerland (sometimes significantly so) with cost of living often equally high and many young families can’t afford to live on one paycheck, no matter how frugal they are. That is different here, where if you aren’t hankering for fancy stuff all the time, it is usually not a problem for women (or men) to stay at home with children. That’s why in some ways it’s very old-fashioned here and only changing slowly, though.

  • Anna

    You are lucky to have government health insurance. Even though I heard it’s not the best. Since you lived NYC you know how expensive it is. I always thought that my life as a contractor would be perfect if ONLY I did not have to buy health insurance. So you lucked out in that sense.

    I was working f/t when I had my kids but it would be impossible without any benefits. Even if you lose pay while on maternity leave you at the very least, will not be stuck with a HUGE hospital bill. think of it that way!

    • saverspender @ save. spend. splurge.

      @Anna: Yes, universal healthcare in Canada is something I do not take for granted any more.

      NYC was a real experience for me, which made me appreciate Canada all the more. I have Canadian friends who fly back to Canada to have children in the hospitals before going back to the U.S.

  • Chris Grande

    My wife is staying home with our baby, and I have my own small business. I live in the US so we simply make due without her salary now but it’s been awesome to spend time with our son and see things that we would miss if he were in daycare full time.

    We just keep things lean and mean in a smaller home, and our only big expense is buying quality food. When my wife goes back to work we can have more toys but we really aren’t missing out on anything and I could continue to grow my business also (another advantage of having one’s own business) so my wife could stay home if she likes.

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