From an income tax perspective, it is generally beneficial if you can structure yourself as a self-employed independent contractor, rather than an employee. Of course, you are not always able to do so, as the firm to which you provide services may insist on you as being an employee or the facts of your relationship with the firm may not support the claim that you are an independent contractor.
If you are self-employed, you can normally deduct more expenses than can an employee. As a result, your net income should be lower, resulting in less tax. That is probably the main advantage.
One downside is that you will have to pay double the amount of Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) premiums relative to an employee. (Another is that you generally don’t qualify for Employment Insurance, though in some cases you can opt in to the EI system for certain purposes; and the September 2021 Liberal election platform proposes to allow EI for all self-employed persons.)
In an employment situation, the employee and employer both pay CPP or QPP premiums.
If you are self-employed carrying on your own business, there is no third-party employer. As a result, the CPP/QPP legislation generally requires you to pay both the regular employee premiums and the regular employer premiums. Hence, you pay twice as much as you would if you had been an employee.
For income tax purposes, half of the CPP/QPP premiums paid by a self-employed individual generate a tax credit. This is likely because employees get a credit for their premiums. The other half of the premiums are deductible in computing the self-employed individual’s net income, likely because “regular” employers get a similar deduction.
(A deduction is more beneficial if you are not in the lowest tax bracket. This is because the credit is calculated using the lowest tax rate, while the deduction will save you tax at the rate of your higher tax bracket.)