All Posts by Randall Orser


About the Author

Bookkeeper Extraordinaire Number Crunchers® Financial Services Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.

Conquer These 5 ‘F’s for a Successful Business 

By Randall Orser | Small Business

Your path to success as a thriving entrepreneur will have downfalls, and you must be willing to conquer challenges and work through obstacles. You can’t let these challenges stop you from going after your entrepreneurial dreams, or else you’ll never forgive yourself for not having the conviction to conquer your trying experiences. The barriers on the way to entrepreneurial success are plentiful, and these 5 ‘F’s are the ones you need to beat.


Entrepreneurs need to be fearless in order to succeed. You’re a business builder and your means of growing your business needs to be bold. Do you have a fear of failure? Maybe it’s a fear of being outdone by a smarter, quicker competitor? Either way that fear will be the end of you, so don’t let fear rule your business moves. Face fear head-on, and you can go far in building your entrepreneurial dreams.


You’ll probably go through what many call the ‘imposter syndrome’, which is basically a lack of confidence, and lots of entrepreneurs have felt fraudulent at one time or another in their daily business lives. You will need to triumph over your confidence issues, if you want to be a successful entrepreneur. You could better your confidence level in areas lacking, hire people that can do the jobs where you’re weaker, get helpful tips from other entrepreneurs, and in the end just believe in yourself.


This is a huge thing for the entrepreneur to overcome as you are starting out and trying to be successful is the predilection to give away your products or services for free. The freemium version of a product has taken off as too many entrepreneurs and startups believe they need that in order to gain traction. If you do only one thing to improve your chances of success, consider changing your attitude towards offering your products or services for free, and double-down on providing premium value instead.


Your chance of long-term entrepreneurial success is much less when you falter in your business building efforts. If you allow roadblocks to hinder your growth or are fuzzy (another F!) in your approach to marketing and customer acquisition, your lapses can affect your success rate. You need to be unrelenting in your approach, take glitches in stride, and grow your company confidence and conviction.


Your career as an entrepreneur takes work, and is much easier to have a 9 to 5 job and a regular paycheque than it is to be self-employed. Entrepreneur ship can also be draining, mentally and emotionally. Your time as an entrepreneur is going to be pretty short-lived, if you let fatigue block you from following your passion. As in many aspects of your life, develop coping mechanisms and energy hacks in order for fatigue not to end your entrepreneurialism.

Your entrepreneurial adventure will be much more enjoyable if you aim at conquering these five ‘F’s. It’s not going to be simple, but the success you’ll enjoy will be worth all that effort. Have you thought of any ‘F’s you find challenging as an entrepreneur?

Do You Have an Employee Turning Sixty-five? 

By Randall Orser | Payroll

As more and more people are not retiring early like they used to, you, as an employer, need to think about those employees that are currently turning 65. If the employee is going to continue to work for you then there are a couple of things you and they need to discuss. The first is Canada Pension Plan (CPP) and the other is their taxes.

Canada Pension Plan (CPP)

You must also deduct CPP contributions for all employees who are 65 to 70 years of age, unless they choose not to contribute to the CPP by giving you a signed and completed copy of Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election. They also have to send the original Form CPT30 to the Canada Revenue Agency (CRA).

Workers who were at least 65 years of age, receiving a CPP or QPP retirement pension, and who had chosen to stop contributing to the CPP can start contributing again if they want to, but they have to wait until the next calendar year. They will be able to do so by giving their employer another signed CPT30 and sending the original to the CRA.

Continue to deduct CPP from the employee until you get confirmation that the CPT-30 was received and processed. CRA has a tendency to lose these forms, so follow up with them after about four weeks.

If you, as the employer, do not deduct or remit CPP contributions to the CRA, you may have to pay your employee’s share and your share of the CPP contributions. If you do not remit the contributions to the CRA by the due date, you may also be charged penalties and interest.

After the month in which they turn 70 years of age, employees can no longer contribute to the CPP.


You should talk to your employee about having more tax taken off his employment income to cover the additional taxes he may incur due to his pension and employment income. Have the employee look at the sources of their income, and the total income they’ll receive for the tax year. The employee can also get the other sources to take off more income tax, so as to alleviate a large tax bill at tax time.

Is the employee taking their Old Age Pension (OAS)? Do they have another pension their withdrawing? Maybe RRSPs? These can all add up to a good sum. If the employee is 65, perhaps taking their OAS is not such a good thing depending on their employment and other income. Currently (2017), the claw back starts at $74,788 and ends at $121,279. If they find their income in this range before the OAS, then it may be wise not to take the OAS until they actually retire.

If the employee is under 70, then they may consider doing RRSPs, or upping their contributions, as this will reduce their taxable income, and give them some retirement funds when they do retire. They should ensure what their contribution limit is before putting any monies into RRSPs.

The employee may want to fill out a new TD1Personal Tax Credits Return plus the Provincial counterpart. As the employee is now 65, they are entitled to some additional credits, such as the Age Amount.

When an employee turns 65, there are a few things that the employee and the employer need to consider. Talk to your employee or have them talk to your human resources, and see what changes are happening.

Pass These Five Entrepreneurial Lessons onto your Children 

By Randall Orser | Small Business

As many have come to realize, the middle class is disappearing. It seems that now you are either filthy rich or at poverty level. For financial independence, that long-time career as an employee is not feasible any more. You need to recognize this and teach your kids, from a young age, how to be an entrepreneur and not an employee. For your kids to succeed, they must learn the following business lessons.

Sales Abilities

Whether your child becomes a solopreneur or takes the startup path, they must know how to sell. You won’t get investors to invest if they can’t persuade them the business is viable investment, nor will they be able to persuade customers to pick them over the competition.

One of the major steps is advising them to have pride and faith in their products or services. They won’t be able to sell what they don’t believe in, and for many kids they need to be coached that what they produce will be good.

Target Growth, Not Avoidance

Failure is the biggest educational impediment that your child faces today. Kids are afraid of failure, as parents are drilling into them that failure is unacceptable. The entrepreneurial perspective needs failure as that is feedback, and it can guide you into working better. They need to look at failure as part of the process of entrepreneurship, and that avoiding it at all costs ends up limiting their options.

You need to look at these fear acronyms (there are many more but these two are relevant to our post): Forget Everything and Run or Face Everything and Recover. Everyone makes mistakes, and scolding your kids when they do doesn’t help; just let them know everything will be okay and ask them what they learned because of the mistake. You need to guide them rather than just tell them what they ‘should’ learn; ask them leading questions and guide them toward the answer.

Independence and Autonomy

Successful entrepreneurs take initiative. There always times when waiting is the best call, however, in a lot of cases action is better than reaction. They need to push past the competition, which seems to just get more intense.

The next generation must have independence, autonomy, and initiative. Coddling and helicopter parenting over your kids all the time robs them of all three, which in the end costs them in the future when they want to create their own companies. You need to back off when they have projects to do; you can answer their questions, just don’t tell them what to do.

Fiscal Responsibility

Get your kids to comprehend that being an entrepreneur and running their own business can’t be done for free. There are many costs such as time and money. They need to get a handle on these costs or they won’t be able to handle running a startup.

For an entrepreneur, the important lessons are financial responsibility and literacy. That summer job or lemonade stand, as innocent as those may be, can teach them about income streams, savings, and profits.

Concentrate on Action

Paralysis by analysis is a phrase than can definitely take the beginning entrepreneur. Planning and theorizing are important, but great entrepreneurs are made from that. Entrepreneurs act on their ideas (and make mistakes) instead of worrying about the possibilities. Don’t get obsessed by checking all the angles, you eventually need to take action.

When your kid has an entrepreneurial idea, encourage them to consider carefully but not fearfully. You need to stress the obsessing over every little detail isn’t ideal, and there are many benefits for just doing it.

Entrepreneurial lessons may seem to be harsh, but they don’t have to be given in a strict manner. You’re teaching your kids to be independent, but that doesn’t mean you have to be cold. Being cold-hearted or mechanical may teach the wrong lessons. You should be warm and supportive. Your children will thank you, both for your kindness, and for showing them how to handle being an entrepreneur.

Why Designating Your Tax Preparer as a Representative is a Good Idea

By Randall Orser | Personal Income Tax

There comes a time when your tax preparer is going to need access to your information that Canada Revenue Agency (CRA) has on you. This could be as simple as finding out how much you made in installments to more complicated such as adjusting your income tax return already filed. Of course, if CRA comes calling about your tax return filed, then having your tax preparer may be the way to go.

Access to Your Information

Allowing your tax preparer to have access to your CRA information can not only save them time getting your notices of assessments or tax installments, it saves you the hassle of having to find them and delay the preparation of your return. There are quite a few things your tax preparer can gather as your representative.

List of notices issued

A new service called 'List of notices issued' provides authorized representatives with a summary list of notices of assessment (NOA) and notices of reassessment (NOR) that have been issued to you as a result of a tax return being filed or amended.

Starting February 13, 2017, a summary list will be available and will include notices that were issued within the last year. Notices that were assessed before February 13, 2017, or before the authorization effective date, will not appear in the list.

The four possible notice types that will be displayed are:

  • NOA issued – No change – will be displayed when an initial assessment results in no tax difference from what was originally submitted.
  • NOA issued – Changed – will be displayed when an initial assessment results in a tax difference from what was originally submitted with the tax return.
  • NOR issued – Client or representative request – will be displayed when a change has been submitted to an assessment.
  • Other NOR issued – will be displayed when a change to an assessment has been initiated by the CRA.

Here’s a list of services for representatives of individuals.

Submit Documents

The “Submit documents” service allows you to electronically send documents to CRA on behalf of either your individual or business clients. “Submit documents” can be accessed directly through Represent a Client and allows you to submit documents on behalf of multiple clients without leaving the “Submit documents” service. The service can only be used to submit documents in response to requests from the CRA to submit supporting documentation and you will be provided with a reference number to use.

Auto-fill Return

Auto-fill my return is a secure Canada Revenue Agency (CRA) service that allows authorized representatives to automatically fill in parts of a 2016 and 2015 income tax and benefit return with information that the CRA has available at the time of filing the return. This service will continue in the future. That said, your tax preparer still needs to see the physical slips to compare what CRA has on file. We found many clients with a T4 of which CRA had no information.

Auto-fill also allows your tax preparer to get information on your carry forwards such as the Home Buyers Plan, non-capital and capital losses, tuition/education credits, etc.

Representing You in a “Review” or an “Audit”

This is where the representative can home in very handy. You get that notice that CRA wants to review something from your return filed, medical is usually one of those. Your tax preparer can get this information together from you, scan and then upload all your receipts to CRA, nice and easy.

If CRA is calling to “review” your return as a small business person, then you should have someone represent you in such matters. They will know exactly what items they put under each expense category, and can explain to CRA their reasoning for so doing. However, they can’t do that without being your representative.

For individuals, it won’t hurt having a third party at any reviews or audits by CRA, or even having them represent you without having to be there with the auditor. Who needs that stress, right? Letting the representative attend the review or having the review done in the representative’s office, may be a good choice.

Responsibilities of authorized representatives

· You shall act in the interest of your clients, employers, and interested third parties.

· You agree not to disclose any taxpayer information that is provided to you by the Canada Revenue Agency (CRA) to anyone else without the taxpayer's prior consent.

· You agree to ensure the security and privacy of all transactions you conduct on behalf of the taxpayer(s).

· You will ensure that all documents are properly disposed of to protect the taxpayer's confidentiality.

· You must comply with all provisions of applicable legislation (i.e. Income Tax Act (ITA), Excise Tax Act (ETA), etc).

· Please note that if you are accessing a taxpayer's account information online through the Represent a Client online service, you are also subject to the terms and conditions of the Represent a Client online service.

· EFILE® service providers are subject to the terms and conditions of EFILE®.

· The CRA reserves the right to revoke or suspend your privileges as an authorized representative of the taxpayer if you fail to abide by these terms and conditions of use.

Having a representative when it comes to CRA matters is a good thing to do, and it allows them to chat with CRA alieving you of that stress. For the representative it makes preparing your return more accurate, and less stressful for them as they can get the information they need to do the return without pestering you.

Is it Time to Outsource Your IT?

By Randall Orser | Small Business

Technology is very important to businesses today, and when it fails, it can be an utter disaster. You have two choices when it comes to your Information Technology (IT) operations. Do you hire someone in-house to install and maintain your servers, and train your staff on the latest software? Or, do you outsource it to an external IT expert? The choice of the latter has many reasons to pick and smart business owners recognize the value of outsourced IT.

The benefits of outsourcing your IT can be quite clear, however, some are not as clear. Here are ten benefits to outsourcing your IT.

Lower Costs

You can lower your overheads with outsourced IT, as you’re just renting the equipment or space on a server, and pay a monthly fee rather than having to outlay tons of money for in-house equipment. You end up paying only for what you need.

Enhanced Security

Data security is crucial for your small business, and managed service companies are experts at protecting your data safe. These IT providers can easily increase data security, and make expensive data breeches less plausible.

Decreased Training Costs

It can get quite costly keeping your IT staff up-to-date on the latest operating systems and other software, not to mention the constant updates out today. Outsourcing your IT can reduce or eliminate these costs lowering your overhead even more.

Hiring Issues are Gone

Most business owners are not techies, and you’re probably not either, so hiring an IT person can be difficult when you don’t understand what it is they do. These hiring challenges can be eliminated by outsourcing your IT.

Dependable Backups

You have so many things on your mind as a business owner that backing up your data may fall on that list way down. You may have a setup where your data is backed up automatically, however, are you checking those backups. Managed service companies ensure that backups are done regularly and that those backups are usable. You’ll definitely be pleased about this when something goes wrong.

Technical Abilities

You’re an expert in what you do and the niche you’re in, however, IT is probably not one of those. Through smart outsourcing of your IT to an expert, you can focus on what you do best, and not have to worry about your IT.

Better Budgeted Costs

You can better budget what you’re spending on your IT each month as you just pay a fee based on the infrastructure or services you bought. When you have in-house staff, that’s much harder to do, as when something breaks down, you’re responsible for paying for it.

Easier Scaling

With an in-house IT staff, it can be much harder to scale up, however, with outsourced IT can be as easy as letting them know what you want. Is your business in a growth phase? Then you’re perfect for outsourced IT.

Better Productivity

The goal of any business is to be productive and efficiently serve customers, and that’s much easier when you outsource your IT. If your goal is higher profits, as I’m sure it is, then better productivity and lower costs ensures those profits.

Give Yourself a Fighting Chance

As a small business owner, you can keep up with larger competitors by outsourcing your IT. Outsourcing has always been a great way to level the playing field, and outsourcing IT lets you win in this global world of ours.

Finding ways to do more with less is the way of the startup as well as the growing business. A great strategy to do more with less is for your business is to outsource your IT, it has ten great advantages as mentioned above.

Is Your Donation Going to a Registered Charity? 

By Randall Orser | Personal Income Tax

It’s always good to give, and charity is one way you can give to help others, and at the same time get a credit on your taxes. In 2010, 84% of Canadians over 15 donated to charity, for an average of $446/donor, or $10.6 Billion. However, is that charity registered with the Canada Revenue Agency (CRA)? Any organization that wishes to have donors get a tax credit must register with CRA. You may be giving to a US Charity in US dollars, however, it may still be registered with CRA.

That raises the question, how do you know if your charity is registered with CRA?

What is the difference between a registered charity and a non-profit organization?

This is where some donors get confused as you may be giving to a non-profit rather than a registered charity. Although registered charities and non-profit organizations (NPOs) both operate on a non-profit basis, they are not the same. This explains the differences between the two.

Registered charities

Registered charities are charitable organizations, public foundations, or private foundations that are created and resident in Canada. They must use their resources for charitable activities and have charitable purposes that fall into one or more of the following categories:

  • the relief of poverty
  • the advancement of education
  • the advancement of religion
  • other purposes that benefit the community

Examples of registered charities

Here are some examples of registered charities under each of the four categories:

  • relief of poverty (food banks, soup kitchens, and low-cost housing units)
  • advancement of education (colleges, universities, and research institutes)
  • advancement of religion (places of worship and missionary organizations)
  • purposes beneficial to the community (animal shelters, libraries, and volunteer fire departments)

Non-profit organizations

Non-profit organizations are associations, clubs, or societies that are not charities and that are organized and operated exclusively for social welfare, civic improvement, pleasure, recreation, or any other purpose except profit.

Examples of non-profit organizations

Here are a few types of non-profit organizations and examples of each:

  • social, recreational, or hobby groups (bridge clubs, curling clubs, and golf clubs)
  • certain amateur sports organizations (hockey associations, baseball leagues, and soccer leagues)
  • certain festival organizations (parades and seasonal celebrations)

If you wish to find out more about the differences between registered charities and non-profit organizations, go here.

List of charities and other qualified donees

Only qualified donees, including Canadian registered charities can issue official donation receipts for gifts they receive from individuals and corporations. Find a charity or other qualified donee, their current status and any available public information.

  • Charities
    (Charities Listings) Confirm registered status; review contact information and information filed on annual returns.
  • Municipalities
    Municipalities currently registered, revoked or terminated.

How do I Check if the Charity I’m Donating to is Registered?

There are two ways to confirm if a charity is registered with CRA:

· You can also call the Charities Directorate at 1-800-267-2384.

· You can ask the charity for its registration number and confirm its status in the List of charities.

Here’s Some More Information on Donating

Does a charity have to give a receipt when it receives a donation?

No. But the Canada Revenue Agency (CRA) advises charities to tell potential donors when they will or will not give a receipt. For example, a charity may decide to give receipts only for donations over $10.

Can a charity return a donation?

In most cases, no. Once the donation is made, the charity has to use the donation to carry out its charitable programs. But there are exceptions. For more information, go to Returning a gift to a donor.

Can a charity lend its registration number to another organization so it can give receipts?

No. A charity should never lend its registration number to another organization. A charity is responsible for all receipts issued under its name and number and must show these donations on its annual return. A charity that lends its registration number could lose its charitable registration.

Does a charity have to send copies of receipts to the CRA?

No. But charities have to keep a copy of all receipts they issue for at least two years from the end of the calendar year the donations were made in.

Whose name should a charity put on the receipt?

A receipt can be issued only to the true donor of the gift. For example, if a corporation donates money that was collected from its employees, and there is a written declaration to prove this, the charity can issue a receipt in each donor’s name. For more information, see Policy Commentary CPC-010.

Can a charity correct or replace a receipt?

Yes. A charity can give you a replacement receipt. For more information, go to Correcting or replacing official donation receipts.

The charity you made a donation to is no longer registered. Can you still use your receipt to claim a tax credit?

Yes. If the organization was registered when you made your donation, you can still use your receipt to claim a tax credit.

What if you get something in return for your donation?

When a charity gives you something of value in return for your donation, it is considered an advantage. The charity has to subtract the value of the advantage from the amount of your donation to figure out the eligible amount to put on your receipt.

Is it safe to donate online?

A charity that asks for donations online should be responsible for protecting your information. Read the charity’s privacy policy before making a donation. Make donations only if the webpages are secure. If you are not sure about donating online, contact the charity and ask about other ways to donate.

You’ve been invited to participate in a donation program that will make a profit for you. Is it safe to participate?

There are serious risks associated with this type of program. To learn more, go to Donation tax shelter schemes.

Donating not only helps your fellow man, but gives you a tax credit. I will say this, giving less then $200 per year really doesn’t do much for your tax credit, and depending on your income, $1000 or more is better.

What are the Advantages of Incorporating? 

By Randall Orser | Small Business

While there doesn’t seem to be statistics on how many small businesses are incorporated in Canada, in the US it’s something like 20%. As of June 2016, there were 1,143,630 small businesses in Canada (97.9% of all businesses are small businesses). In Canada, a small business is defined as businesses that have fewer than 100 paid employees. In Canada, when you incorporate, you can use Limited, Ltd., Incorporated, Inc., or Corporation after your company name. Why are small businesses choosing to incorporate their business at the start?

Legal Protection

With a sole proprietorship or partnership, you have unlimited liability, however, a corporation limits your liability to your investment in the company. The debts and other legal judgements against the company do not affect your personal assets.

You can also protect the name of your corporation, at least in the Province you’ve incorporated, or Canada if you do a Federal incorporation. Though if you have something good, it may be worth trademarking it.

Equity Investors

If you are a sole proprietorship, and family wish to invest, then you have to make them partners, which then dissolves the proprietorship, and creates a new entity. Otherwise, it’s just a loan that you pay back. For the corporation, you raise capital by selling shares, and you can have different share structures, such as non-voting or preferred shares where they get their investment back first.


The corporate tax rate for small business, if it’s a Canadian Controlled Private Corporation, is 10.5% at the moment, and the provincial tax rates varies on your province. In BC as of January 2017, it’s 2.5% for a total rate of 13% on net income below $500,000. Over that amount it jumps to 11%, and a federally it’s 15% for a total of $26%.

The advantage to incorporation is you can play with your income. You can take all the net income out as wages, or divide it between wages and dividends, or leave some net income get taxed at 13% on that, and take some as salary and/or dividends. You need to keep in mind if you have a personal mortgage, the banks like to see a higher personal income. I have found the banks don’t like all dividends when it comes to income.


The sole proprietorship dissolves once the owner dies, and the partnership may dissolve if there’s no agreement in place on the occurrence of a partner’s death, otherwise, it becomes a proprietorship or a new partnership. Corporations, on the other hand, continue until they are liquidated.

Ease of Ownership Transfer

As ownership in a corporation is through shares, this makes it much simpler to transfer said ownership. The purchase of shares allows the company to merge or be sold without having to start the business from scratch.


To future investors or customers, having the suffix Limited, Incorporated, etc. after you name makes you seem more legitimate in their eyes. For some people, it just seems like your more invested in your business if you’re incorporated, especially to the banks.

Also, being incorporated allows foreign investors to invest in your company as there are not the limitations to invest like other forms.

There are Drawbacks to being Incorporated

Administrative Costs

Maintaining a corporation does have its additional costs over the sole proprietorship or partnership. Corporations have an annual filing fee with the province for provincial corporations and for federal corporations too. Federal incorporations may have two filings as they file federally as well as provincially depending in which province it operates. Of course, if you operate in more than one province, you have to register the corporation in each province, and then pay annual fees.

Also, many provinces work with the Canada Revenue Agency, and are informed when you incorporate, so you may be required to register for Workers’ Compensation depending on the province.

More Documentation

Since corporations are separate entities from the owners, there is increased documentation account setup, and filing demands, such as:

· Articles of Incorporation

· Bylaws

· Corporate Minutes

· Certificates of Good Standing

· Separate Bank Accounts

· Greater tax compliance

There are some requirements for corporations when they reach a certain revenue milestone or the number of shareholders that they need to register with the TSX. And, maybe the SEC in the US.

Double Taxation

The one advantage of incorporation is taxes; however, it can be a double-edge sword. The reason is that the corporation is taxed on its earnings, and the owners pay taxes on any earnings received from the corporation, such as dividends. Dividends though are taxed at a different rate than employment income.

When entrepreneurs consider starting a business, the corporation isn’t the first type of entity they think about. Corporations are a viable choice for a business startup, and have advantages over the other forms.

Are You Considered a Low-Income Worker?

By Randall Orser | Personal Income Tax

In 2007, the government at the time established a refundable tax credit for those Canadians who are working but have a low income, and not attending post-secondary education called the Working Income Tax Benefit (WITB). It was thought this would encourage Canadians to enter the workforce. A refundable tax credit is one that you actually get the money back rather than added to your other non-refundable credits. For some clients, this has meant going from a balance owing to getting a refund, which is always nice. Who qualifies and what do you get with the WITB?

Are you eligible for the WITB?

You are eligible for the WITB if:

  • You are 19 years of age or older on December 31st; and
  • You are a resident of Canada for income tax purposes throughout the year.

If you are under 19 years of age, you may still be eligible for the WITB, if you have a spouse or common-law partner or an eligible dependent on December 31st.

You are not eligible for the WITB if:

  • You do not have an eligible dependent and are enrolled as a full-time student at a designated educational institution for more than 13 weeks in the year;
  • You are confined to a prison or similar institution for a period of 90 days or more in the year; or
  • You do not have to pay tax in Canada because you are an officer or servant of another country, such as a diplomat, or a family member or employee of such person.

If you are eligible for the WITB and the disability amount, you may also be eligible to claim an annual disability supplement. To be eligible for the disability supplement, your working income must be over $1,150 and the Canada Revenue Agency (CRA) must have an approved Form T2201, Disability Tax Credit Certificate on file. If you have not already sent the CRA a completed Form T2201, you must do so to receive the disability supplement.

Some provinces/territories have exercised the option to reconfigure the WITB calculation based on specific social and economic realities. The CRA will determine the amount of WITB to pay based on the eligible individual's province or territory of residence at the end of the year.

For WITB purposes, you have an eligible dependent if you have a child who, at the end of the year:

  • lives with you;
  • is under 19 years of age; and
  • is not eligible for the WITB.

For WITB purposes, eligible dependents can be registered by completing Form RC66, Canada Child Benefits Application. However, if your dependents are already registered for the goods and services tax/harmonized sales tax (GST/HST) credit, the CRA will automatically take them into consideration when calculating your WITB amount.

For WITB purposes, an eligible spouse at the end of the year is a person who meets all of the following conditions:

  • is your spouse or common-law partner on December 31st;
  • is a resident of Canada throughout the year;
  • is not enrolled as a full-time student at a designated educational institution for a total of more than 13 weeks in the year, unless he/she has an eligible dependant at the end of the year;
  • is not confined to a prison or similar institution for a period of 90 days or more during the year; and
  • is not an officer or servant of another country, such as a diplomat, or a family member or employee of such person.

Family net income is an individual's net income added to the net income of their spouse or common-law partner, minus any amount reported for Universal Child Care Benefit (UCCB) (line 117 of the Income Tax and Benefit Return). Net income is the amount on line 236 of the Income Tax and Benefit Return.

Working income for a tax year is the total amount of an individual's or family's income for the year from employment and business (excluding losses).

How is the working income tax benefit (WITB) calculated?

The WITB is calculated using the following information:

  • marital status; province or territory of residence; working income; net income; eligible dependent; and eligibility for the WITB disability supplement.

To see how the WITB is calculated, please refer to the calculation sheet applicable to you, or you can use the Canada Revenue Agency (CRA) Child and family benefits calculator to get an estimate of your benefit.

What is the maximum amount of WITB you may receive?

WITB is intended for low-income individuals and families who have working income earned from employment or business.

For single individuals without children, the maximum amount of WITB is paid if working income is between $7,112 and $11,675 for 2016. The WITB payment is gradually reduced when net income is more than $11,675 (this is referred to as the base threshold). No WITB is paid when net income exceeds $18,529. These amounts vary slightly for residents of Alberta, Quebec, Nunavut and British Columbia.

For families, the maximum amount of WITB is paid if the family's working income is between $10,472 and $16,122 for 2016. The WITB payment is gradually reduced when family net income is more than $16,122 (this is referred to as the base threshold). The WITB payment is reduced to zero once family net income exceeds $28,576. These amounts vary slightly for residents of Alberta, Quebec, Nunavut and British Columbia.

For single individuals and families who are eligible and entitled to WITB disability supplement, the income thresholds will be a bit higher. See here.

Check here for the income levels.

The WITB can be quite beneficial to low-income, working Canadians, and was designed to give them a break on their taxes, as well as encourage those not yet in the workforce to do so.

How are Your Profit Margins? 

By Randall Orser | Small Business

Do you feel like your profit margins are being choked? You are probably finding that you are working harder and harder to make the same profit with the same capital. Or, maybe you’re finding you’re having to put more capital in to your business to stay afloat. You need to know where your profit margin is now, and find means to improve them.


So, where do you start? Your pricing is one of the things to check out first. You may want to increase prices by a few percent as this grows your profit margins immediately; however, you need to find a percentage that won’t affect sales. This across the board increase on all prices is doable, but not always practical. A better approach is to look at those areas where a price increase can do the most improvement. This could be where your inexpensive items are marked up, while the more expensive items are not. A great example of this is inkjet cartridges, they cost more than the printer, however, you need them to run the printer and going and buy a new printer when the cartridges run out isn’t practical. Are you offering discounts or special offers? Discounts can give away too much, and don’t always get your recurring business, unless you keep giving the discount; and, special offers can be too charitable. If you’re offering discounts or have special offers, stop them or fine-tune them to increase your profit margins without increasing prices.

Mix It Up

Your sales that is. Have you analyzed the costs of your products? Do you know the margins on each? If you offer services, do you know the costs and margins on each? This is crucial to figure out a strategy you need. This could be looking at how to stimulate your customers to change their behavior by offering a loyalty scheme, or offering bundles (putting two products or two services together, or a product with a service).

Lower Your Costs

Looking at what it costs to produce your product, or service, and reducing them can definitely improve your margins. This isn’t going at your costs with a chainsaw, but doing an accurate study, and seeing the best areas to cut. Where are your orders coming from? A good way to lower advertising and marketing costs is cutting those that are not generating a good amount of sales, and moving your dollars to where they are generating good sales. Being purchasing savvy is another good way to lower costs, such as buying in bulk, or paying for a year and getting a lower rate per month or free months.

Waste Not Want Not

There are so many things that can waste your dollars. Leaving lights on or computers on when no one is around, keeping too much inventory on products that aren’t selling, and using old lighting technology that uses too much energy. Investing in a more efficient plant, can quickly payoff. What products and/or services differentiate you from your competitors? Focus on those, not the ones that are the same or similar to the competition. Low quality can hurt your margins, so look at products that are broken or below par, get returned from customers frequently, and perishables that are beyond their best before date; get rid of these as soon as you can.

Time is Money

Time is money, as they say, and it was never more apropos than on a television show, where a minute is worth about $200! – Dirk Benedict, actor

What’s slowing down production? What’s causing delivery delays? Fix those things and you will vastly improve your margins. How often are customer details taken down? This takes time, the more times you do this the more time the customer is on the phone, but not buying something. Cutting the time wasted taking details more than once, benefits you, but the customer more. You can expedite the process by templating or automating email responses, keeping stock of parts that are ready to assemble rather than having to do a whole run to make the product, which will save you money.

Feel the Churn, well maybe not

Are you watching when customers drop out of the purchase, or stop ordering? When customers drop, this is called churn, and it can cost your business big time. What causes churn? It could be your website is not performing adequately, and customers leave before completing the sale. Maybe it’s that your recurring customers are no longer coming around, and you need some help getting them back; such as targeted offers, sales or discounts, maybe a call from you the owner.

Cut the Slack, Customer Slack

Where are your delivery areas? Are there any outer lying areas that you deliver to, such as rural areas; may be good to cut those unless it hurts your business image. Maybe they can be turned profitable for now by delivering only on certain days, or subcontracting out those deliveries. If you sell business to business, look at your customers and let go of the less profitable ones. Don’t just do this willy nilly, do a thorough study to determine if they need to be let go, and do so as tactfully as you can. Of course, don’t forget your more profitable customers, look at the top ten to twenty percent of those, and see how you can get more business out of them.

Your Business Model Sucks

Sometimes in the end it’s your business model that needs an overhaul. You may be doing customized software, or some other product that’s customized, however you may want to change that model to packaged software selling licenses and get royalties from bigger companies. You can improve your margins with a lower cost by selling a complementary, outside supplied product, which may turn you from a manufacturer into a retailer, but could make total sense.

In our current economic climate, it can be hard to boost revenues, however increasing profit margins may be easier, which in turn creates a noticeable bump in the bottom line.

What Happened to Casual Labour? 

By Randall Orser | Small Business

Once upon a time, the Canada Revenue Agency (CRA), would allow you to deduct small payments made to people that you hired to do a particular job, or maybe work a few hours to cover someone, a student to hand out fliers, etc., and it was called Casual Labour. Those days are long gone. Now, when you hire someone they are either an employee or a subcontractor.

If you’re continuing to pay cash for the odd job here and there, even window cleaning, you are losing out, and cannot claim the expense. And, if you are claiming such expenses, then you are waving a red flag at CRA, and could trigger an audit. CRA will look at your wages expense, compare that to your T4s, and then want to look at your payroll records. If you’ve paid a lot out as casual labour, then CRA will determine this as wages and calculate the deductions according, adjust your T4s, and penalize you for not claiming these individuals as employees. And, you will be on the hook for those casual labour people’s CPP and EI.

CRA is trying to stop the underground economy (any activity that is unreported or under-reported for tax and GST/HST purposes; including moonlighting or working under the table). Casual labour was one of those forces that encourages this underground economy. Generally, any income you earn is taxable and you have to report it on your tax return. If you don’t file your tax return or register your business for GST/HST when you’re supposed to, or you don’t report all of your income, you are participating in the underground economy. In most cases, when you pay someone as casual labour they are not reporting this as income, and, therefore you’re contributing to the underground economy. Maybe without even realizing it.

For the business owner, it can be a pain to have to take deductions off a one-off employee, however, that’s the rules and it’s best to follow them. I can certainly understand that, as you now have to calculate CPP, EI & Taxes on such a small amount of pay. Your best bet is to find someone who can work casual on days you need them, you can treat them as an employee, pay them every two weeks, and you’re good.

You can’t just pay someone as a subcontractor either to get away from not having to make deductions. They need to invoice you, provide a SIN (especially if you’re in construction as you have to do a T5018), have their own workers’ compensation coverage, and a GST/HST number is best. You probably would be better off having some kind of contract for anyone you use on a regular basis.

Remember, you can still pay people cash for those little bits and bobs that you need done. Just remember that you won’t be able to write it off as an expense, and if you’re incorporated and draw out company cash to pay them, that is now a shareholder draw and you could be taxed on it.

Casual labour is dead, and you need to decide what you’ll do with anyone going forward you need just on a few days a month or even a one-off. In the end, you’re better off treating them as an employee, even if they’re your kids.