Category Archives for "Employees"

Why Older Workers can be a Valuable Asset to Your Business

By Randall Orser | Employees , Small Business

According to the Canadian Government, in 2014 over 6 million or 15.6% of Canadians were 65 or over.  By 2030 this number will rise to 9.5 million making up 23% of Canada’s population.  The stereotype of the doddering older person is no longer true, and in fact they can be every bit as creative, innovative and entrepreneurial as their younger counterparts.   

Many older people want to stay within the work force either in full, part time or flexible jobs, or by creating self-employment opportunities for themselves. According to the US Bureau of Labor Statistics, between 1995 and 2016 the share of men in the work force aged 65 to 69 in rose from 28% to 38%, and for women the increase was from 18% to 30%.  Self-employed and entrepreneurial older workers were the highest percentage of any age group, and five times greater than the 24–35 age group.   

Here are some reasons why hiring older workers can help you to maintain a reliable workforce and provide a significant cost savings.

  1. Employers often complain that they are unable to find qualified employees. Older workers bring their previous education and experience, are more dedicated and produce higher quality work usually with little training.  
  2.  They are more likely to show up every day ready and willing to work.  
  3.  They take pride in a job well done, often staying after hours to complete a task.  Younger workers tend to want to put their hours in then leave.
  4.  They value honesty, personal integrity and truthfulness.
  5.  They are detail-oriented, focused and attentive and can often able find mistakes such as pricing errors, spelling errors and accounting mistakes which can save the company money.
  6. They are good listeners and often only have to be told once what to do. This makes them easier to train.
  7. Older workers can set an example and can be excellent mentors for other employees.
  8. They have greater organizational skills meaning less man hours are lost due to workplace disorganization.
  9. They are efficient and confident, willing to share their experience and recommendations with fellow workers and management. This means that jobs can be done more efficiently saving the company money.
  10. They have good communications skills learned from their previous experience in the workplace.

Next time you are hiring, consider an older person for the skills, values and potential savings in time and money that they can bring to your company.  Rethinking the costs of high turnover of younger staff vs the benefits of more mature workers can make a positive difference to your bottom line.

From an article by Stephen Bastien in Entrepreneur

 

Are you Planning to Give Gifts to Your Employees this Holiday Season? Do You Know What is Taxable?

By Randall Orser | Business Income Taxes , Employees , holiday season , Payroll , Small Business

At this time of year many employers give a Christmas or annual bonus – did you know that this is a taxable benefit if paid in cash or a cash equivalent such as gift cards?

You might think about giving your employees gifts instead of cash bonuses so that both of you will benefit on your Canadian income tax.  Employers can use the total cost of the gift as a tax deduction and employees do not need to declare the cost of the gift as part of their taxable income.

Under CRA rules all gifts to employees are considered to be taxable income except for the following exemptions:

1.   It is non-cash and less than $500 in fair market value per year and only given for the following reasons:

  • A Religious or other special event
  • Birth of a child
  • Wedding
  • Birthday

2.   It is a non-cash long standing service award valued at less than $500, this can be given once every five years.

3.   An Award for an employment related accomplishment.  These are allowed when:

  • It has clearly defined criteria
  • A nomination and evaluation process
  • Limited number of recipients

4.   Employer provided parties or social events where the cost is $100 per person or less.

5.   Meals or other hospitality services at work-related functions such as meetings or training sessions.

6.   Valueless items such as tea/coffee, snacks, t-shirts, hats etc.

There is no limit to the number of gifts an employee can receive in a given year as long as the total value is not more than $500.  Small gifts such as mugs or chocolates etc. are not included in the $500 limit.

If you want to give your employees gifts that are tax deductible for your company, you need to be careful what you give.  Items that can easily be converted into cash such as gift cards or stocks will be considered to be taxable employee benefits as will some performance related awards and bonuses.  Included under this rule are:

  • Gift Cards
  • Rewards that include employer-provided meals or accommodations such as trips
  • Cash or non-cash awards from manufacturers that are given to employers then passed onto employees
  • Points for travel, accommodations or other rewards
  • Gifts given by manufacturers to employees of dealerships

If you want to give Cash Bonuses or near-cash bonuses such as gift cards to your employees, it must be through payroll and must have taxes deducted.

For full list of taxable or non-taxable benefits and allowances visit the link below:
CRA's Benefits and allowances chart


Before You Start Your New Business, Ask Yourself These Five Vital Questions

By Randall Orser | Business Income Taxes , Employees , Small Business

You've chosen, you can hardly wait one more year to experience your fantasy. You long to work for yourself and run your own particular organization. You have a business thought and you're prepared to run head-long down the way to entrepreneurial flexibility. Before you bind up your sprinters and leave upon your voyage: you have to pose a couple of extreme inquiries first, sit yourself down and confront the accompanying five inquiries. Without the correct answers, your entrepreneurial dream may need to pause. 

ls Your Business Idea Viable Over the Long Term? 

Having a thought for another business is extraordinary. Understanding whether you can transform that thought into a beneficial long-haul business is very another story. Talk about your idea with loved ones; ask for ruthlessly genuine criticism. You have to know whether they can see themselves utilizing your business for quite a long time to come or in the case of acquiring from you would be a one-shot arrangement. On the off chance that you have to continually discover new clients, the continuous obtaining expenses may make your organization an Iess-than-beneficial wander. 

By what means Will You Acquire Customers? 

Since we're discussing obtaining costs, how would you intend to attract clients to your business? Is it accurate to say that you are trusting they’ll just normally discover you by means of their most loved web index? Is it true that you will utilize web-based life, and assuming this is the case, which stages will you utilize? Client obtaining is one of the hardest difficulties business people confront, everyone from corporate CEOs to startup organizers under-gauge exactly how tiresome it tends to be to persistently chase for new clients (it doesn't mind keeping the ones you have). Without a practical and reasonable arrangement to attract clients to your organization, your business may be dead in the water before it is even begun. 

Would you be able to Afford Legal Costs? 

It's a troublesome subject to confront, however securing your business legitimately is only one of the difficulties of maintaining your own business. Consider the possibility that a client is unsatisfied with your item or administration offering and chooses to make legitimate move. Is it true that you are ensured? Would you be able to manage the cost of the essential protection premiums to guarantee your organization is secured? From a flawed item that makes hurt a patent encroachment claim., there are various difficulties that could possibly come your direction. Having proper legitimate guidance and protection scope is essential on the off chance that you need to assemble a business that keeps going. 

Where Will You Build Your Business? 

Choosing whether you will run your organization out of your home or by means of a place of work is another test you will confront. In the event that you maintain an online-just business, what are the assessment suggestions in your neighborhood ward? On the off chance that your organization offers returns of physical merchandise, which return address will you offer for your organization? Odds are great you would prefer not to offer your place of residence on your organization site. Will a mail station box address do the trick? Do you have to rent a brick-and-mortar customer facing facade for your organization? Picking between maintaining an online business versus an organization with a physical address client can visit is only one of the arranging choices you need to make. 

Who Will You Turn to for Business Advice? 

Mentorship is a basic segment of business building. You'll confront numerous hard choices as you endeavor to develop your organization. Knowing ahead of time who you'll swing to for business directing is critical. Will you procure a business strategist, and would you be able to bear to do as such? Will you swing to different entrepreneurs who have manufactured fruitful organizations in your division or would you fear them taking your thoughts? In case you're depending on loved ones to offer business exhortation, they may abstain from giving you the hard realities just to save your sentiments. Business mentorship is an imperative piece of growing an organization; you have to confront this choice. on the off chance that you need to guarantee business stresses don't contrarily affect your wellbeing and prosperity. 

Building your own business is an outstanding choice. Not alI have the chutzpah important to put their future hanging in the balance. On the off chance that you need to guarantee your entrepreneurial dream doesn't turn into a living bad dream, you have to put forth a couple of intense inquiries initially Are you prepared to experience your enthusiasm and assemble your own organization?

How do You Measure up on Making the Hard Decisions?

By Randall Orser | Budget , Business Income Taxes , Employees , marketing strategy , Small Business

Running your small business can be one demanding enterprise. Your dilemma is that you have control, but that is both a blessing and a curse. You have the joy of deciding how your company grows and develops, but you are also answerable for everything that happens, good or bad. If you let it, this kind of pressure can douse the flames of passion. You can make things mentally and emotionally easier for you to deal with by using the following in your approach to decision-making.

Limit Your Options

The old adage analysis paralysis can easily set in. That’s why you should look at having your offers have as few options as possible. The more choices the customer has to decide on then the less likely they are to make any choice at all.

The more options you have available to you, the harder it will be to take a path. Your best bet is to limit options is to raise or refine your standards. The more specific your needs or desired outcomes, the less options you’ll have to pick from.

Use Your Numbers

Not sure which way to go, then your best to approach the issue objectivity. Rather than just go with your gut, check your numbers. Focus on the measurable metrics and forget what isn’t quantifiable. 

While this can take more time and slow down your decision-making process, it also makes your decision more tenable as well as improving the quality. As an example, you have two manufacturers to choose from and it’s a hard choice, however, go to the numbers and which one gives you a better deal when it comes down to brass tacks.

Think Long Game

Fear is one of the biggest barriers to quick decision making. The idea that your business can be hamstrung by a single mistake is a common one, fortunately it’s not an accurate one. Although a single mistake can hurt, it’s not the death knell you may make it out to be.

Some decisions won’t always expose their true nature early on. What’s working now for your small business won’t necessarily work in the future. On the other hand, that bad decision you make today that negatively affects your business may not necessarily do so in the future. Don’t focus too much on your mistakes or their immediate effects. They’re not necessarily representative of how things will turn out.

Manage Decision Fatigue

Nothing withstands constant pressure. Exercise one muscle frequently in a short period of time, and it’ll fatigue, no matter how strong it is. The same effect happens on your brain when making a lot of decisions, fatigue. Deciding what to have for lunch, which is a simple choice, can add to the barrage of stress bearing down on your brain.

By delegating those small-impact decisions to other people can keep that stress at bay. You need to focus on the big decisions. If you can reduce something to a habit or pattern, do so. Save your energy for important choices.

Not Your Problem

You can easily miss the forest for the trees when you’re deep in the woods, and that’s where you’re at when trying to solve your own problems. Especially challenging decisions can leave you lacking perspective. Taking a step back and removing yourself from the situation can be the best thing to do. Pretend it’s not your problem.

If you had a friend facing this decision point, think about what advice you’d give them. That seems silly but pretending that it’s someone else’s problem to resolve can jar your mind enough to recover your perspective.

You must nurture decisiveness as it’s a key trait to decision making. You won’t be able to run your business if you can’t make decisions quickly. It will take a lot time, practice, and effort, but it’ll be worth it if it makes you a leader who can make choices without freezing.

Find the Best Talent for Your Business

By Randall Orser | Consulting , Employees , Small Business

The 21stcentury economy is constantly evolving at unheard-of rates, and it’s getting harder and harder to find employees with the necessary skills for your business. As an employer are you finding it a struggle to find the right employees to stay competitive? The tried and true solution of old for finding new employees through traditional educational programs isn’t working as well either, because modern business is progressing so fast that many things learned in the classroom are either irrelevant or outdated by the time a student gets a degree. Businesses must get more innovative in their search for new employees in order to overcome those challenges. If you’re looking for new talent in this modern job market, here are some tips that may help.

Formal Education

For a long time, prevailing thought was that a relevant degree was the mark of a potentially able and valuable employee. There is still some truth to this, but a degree shouldn’t be the final word on whether that potential employee is a suitable fit. Many workers today are bypassing the traditional educational system by teaching themselves skills via online learning. Just because they don’t have the traditional degree doesn’t mean they aren’t as good or better than other prospects who do have degrees in their field. You should be placing your emphasis more on skills over degrees to avoid overlooking good talent.

Freelancers

Freelancer workers have been increasing their presence over the past few years, and economically are a great development. Freelancers aren’t someone who’s going to come work for you directly, but they can become a valuable resource because of the real-world experience in their fields. The workers of the future will be freelancers, so you don’t want to pass over them simply because of an outdated mindset of having traditional employees.

Build a Virtual Team

Thanks to technology many businesses carry on their operations without the need for all employees to be in one location. As an employer, you have a big opportunity to hire people from anywhere in the world, not just where your business is situated. The virtual space does take some getting used to, especially if you’re used to a more traditional way of doing business, but the benefits are vast. If you find someone whose talent fits your business well and is prepared to work remotely, don’t squander the chance to bring on this person just due to geographic separation.

Training Resources

Once a new employee has been brought on, the problems that were there that made it difficult to find that new employee with pertinent skills are still there afterwards. It’s more important than ever to play an active role in keeping the skills of your employees up-to-date. You need to develop practical training resources for employees that protect you from that skills gap re-emerging later on in your business. You may be thinking I’m a small business and don’t have the funds or time to develop such resources, however, there are online learning courses, and many are probably provided by your suppliers, that can keep your employees advancing.

The disparity between the skills you need or want, and those of future employees, just seems to grow bigger as the years go by. However, with the above strategies, you, as a modern business, can mostly sidestep the skills gap by adapting to how the modern job market works. And remember to offer your top performers generous incentives so they’ll stay, before you realize that their talent is also wanted by your competitors.

Hire the Right Graphic Designer

By Randall Orser | Consulting , Employees , Freelancing , Home Based Business , Small Business

Strong visual branding is the difference between success and stagnation in business. We’re visual creatures and your visual first impression of your business can rest on your design of your marketing elements (logo, etc.). If you’re going to get serious about brand building, then you must find an experience and talented graphic designer.

Most small businesses starting out don’t have the budget to hire in-house for this, so what do you need to consider when hiring a freelance graphic designer or agency.

Industry Experience

Many industries have a loose, underlying design theme used by successful brands within them. This greatly affects the type of design you should consider using. As an example, a snowboard clothing brand would need a very different tone and feel than a senior’s care facility.

Granted it can be useful to step outside the ordinary, it does pay to know the common themes and conventions as starting points, and it’s helpful if the designer can draw on their experience of previous work in your industry.

Range of Previous Work

However, simply imitating the style of your competitors will do nothing to build your distinctive brand. A versatile designer will have professional experience in an assortment of industries and can bring a wide range of influences into their work. Although you may want to hire a designer because of their individual style, they need the flexibility and experience to adapt their work to your company’s needs.

Testimonials

Does the designer have testimonials from previously satisfied clients? Most designers have some kind of testimonials, though there may be confidentiality issues that rule that out. Nonetheless, there has to be some way of checking their previous experience.

Professional Portfolio

The portfolio is an absolute must, whether or not testimonials are supplied. Proof-of-ability examples are okay rather than actual client work, however, it’s necessary if you’re going get any idea of the level of work you should expect. If you’re not impressed by the quality or have other serious issues such as disliking the fundamental style, then just stop now. You’re highly unlikely to get the designer to radically change their style just for your project.

Working with Others

Wide experience should also have furnished the designer with an ability to work with others in your organization. An effective designer should be able to liaise with your web team to ensure the results match their needs. Are they happy with this level of communication, and who will be the point of contact for your staff? Also, how will you get progress reports, and who do you speak with if there’s a problem.

Delivery of Goods and Legal Issues

Which formats will the work, once completed, be delivered in? Who takes ownership of the original files, including any rejected drafts? Who retains the copyright? While for professional designers and agencies none of those should be a problem, it’s best to ensure the details are expended before commitments are made and money changes hands.

Professional Insurance

Does the designer have insurance for their work, and will they indemnify you against any risks? Trademark violations and plagiarism accusations can be costly to resolve, but they shouldn’t be your problem if they arise.

Realistic Pricing

Like many creative industries, price expectations have been lowered over recent years, largely because of easy online outsourcing through bargain-basement platforms such as fiverr. However, you need to be realistic about the fees a reputable agency or freelance would charge.

If you want a relationship with a competent and proactive professional, this is going to cost more than a one-shot project ordered online. Find out what the initial fee covers, what it doesn’t, and whether a retainer option could offer a better deal all round.

No serious entrepreneur would disagree on the importance of a trusted and attractive brand, and the imagery your company uses is a crucial component of this. Taking the time to find the right graphic designer is a solid investment in the future of your business and could be that crucial aspect that puts you out in front of your competition.

Are Your Employee CPP/EI Deductions Correct?

By Randall Orser | Employees , Payroll , Personal Income Tax

As we’re coming to the end of the year, it’s a good time to check if you’re correctly calculating and deducting for Canada Pension Plan and Employment Insurance. You may think the software, or even Canada Revenue Agency’s Payroll Deductions Online Calculator (PDOC) are doing the correct job, however, that’s not always the case. In most cases, there’s not much of a different, but in some cases, it can be substantial.

Pensionable and insurable earnings review (PIER)

Each year, CRA checks the calculations you made on the T4 slips that you filed with your T4 Summary. CRA does this to make sure the pensionable and insurable earnings you reported agree with the deductions you withheld and remitted.This should be something you’re doing before you do your final remittance for the year in January of the following year. If you have someone preparing your T4s using software, they can do this for you before you file your December remittance in January. The software checks the CPP & EI and then adjusts the amounts and puts them to TAX. The reason to do this before the final remittance before the year is so you don’t end up with a credit balance on your payroll deductions account (this tends to trigger CRA into asking questions).

If you’re doing the T4s yourself then there is a way of checking the CPP & EI amounts.

Checking the amount of CPP you deducted

Step 1 – Prorate the maximum CPP contribution for the year by following these steps:

Stage 1: Deduct the year's basic exemption ($3,500 for 2016) from the year's maximum pensionable earnings ($54,900 for 2016).

Stage 2: Multiply the result of Stage 1 by the number of pensionable months.

Stage 3: Divide the result of Stage 2 by 12 (months).

Stage 4: Multiply the result of Stage 3 by the CPP rate that applies for the year (4.95% for 2016).

To find out about the previous and current exemptions, maximums, and rates, see the CPP contribution rates, maximums and exemptions chart.

Step 2 – Calculate the CPP contribution per pay period using the Manual calculation for CPP, and withhold the amount calculated until one of the following happens:

* the maximum prorated contribution for the year is reached; or

* the last pay period for which deductions are required is completed.

Step 3 – The correct amount of CPP contributions will be the result of Step 1 or Step 2, whichever is the lowest.

Example

Brent turns 18 on June 15, 2016. He receives $1,000 every two weeks ($26,000 a year). This amount is less than the maximum pensionable earnings ($54,900 for 2016) that require CPP contributions.

Prorated maximum contribution for 2016:

($54,900 – 3,500) × 6/12 × 4.95% = $1,272.15
(6/12 represents the number of pensionable months divided by 12).

Brent’s maximum CPP contribution for 2016 is $1,272.15.

Pay period calculation:

January to June 2016

No CPP contributions

July to December 2016

* Pay period: biweekly* Earnings: $1,000

* Brent’s first pay in July is July 3, for the period June 20 to July 3.

Using the calculation in the basic exemption chart, Brent’s CPP contributions for each pay are calculated as follows:

Step 1: Brent’s pensionable earnings = $1,000.00

Step 2: Basic exemption for the period from the basic exemption chart = $134.61

Step 3: Pensionable earnings minus basic exemption = $865.39

Step 4: CPP contribution rate for 2016 = 4.95%

Step 5: CPP contribution per pay period = $42.84

You will have to start deducting $42.84 from each of Brent’s pays, beginning with the one dated July 3 (the month after Brent turns 18). His actual contributions for the year will be $42.84 × 13 (biweekly pay periods) = $556.92.

This does not exceed the prorated maximum contribution of $1,272.15; therefore, the correct amount of CPP has been deducted.

When you fill out Brent’s T4 slip at the end of the year, report $26,000 in box 14, $556.92 in box 16, and $13,000 in box 26. Fill in the rest of his T4 slip in the usual way.

Checking the Amount of EI You Deducted

Checking EI is much easier than CPP as there is no yearly exemptions, though there is a yearly maximum income amount (2017 = $51,300 and $836.19 in total EI). Basically, you take the employee’s income for the year times it by the current EI rate (1.63% to maximum of $836.19) and that’s what should’ve been deducted from the employee.

Example

Bob earned $47,000 in the year, so his total EI contributions should be $766.10. If that matches what you have in your records then you’re good to go, if it’s under you’ll have to take more off of Bob’s next cheque. If it’s more, then just adjust his EI to match that amount and add the difference to his TAX amount. If it’s just a couple of pennies, don’t worry about it.

The annual maximum insurable earnings ($51,300 for 2017) apply to each job the employee holds with different employers (different business numbers). If an employee leaves one employer during the year to start work with another employer, the new employer also has to deduct EI premiums without taking into account what the previous employer paid. This is the case even if the employee has paid the maximum premium amount during the previous employment.

If I Give a Gift to an Employee, is that Taxable?

By Randall Orser | Employees , Personal Income Tax

Shopping cart with giftsYour employees are doing a great job, and you want to reward them with some kind of gift. However, you wonder if anything you give them will have to be considered income, and you are probably right. It’s pretty sad really that the government has to get its dirty paws on everything we earn.

A gift has to be for a special occasion, such as a religious holiday, birthday, anniversary (marriage or day started as an employee, wedding or birth of a child.  You may also give awards (employment-related accomplishments), such as for outstanding service, employees’ suggestions, or meeting or exceeding safety standards. Don’t confuse this with a reward, such as performing well in the job or exceeding production standards; these are performance related reasons. You can give an employee a gift, award or reward, and you can give it to them in either cash or non-cash, however, it’s still a taxable benefit.

This also means that as it’s a taxable benefit, Canada Pension Plan (CPP) and Employment Insurance (EI) may also apply to the gift, award or reward. If it’s a taxable benefit, it is also pensionable, so CPP applies. For EI, if the taxable benefit is paid in cash, then it’s insurable and EI applies. If the benefit is non-cash, it is not insurable, and EI does not apply. Remember, tax applies all taxable benefits.

You may be thinking, what about gift cards? Sorry, gift cards are considered an equivalent to cash, and, as such, are a taxable benefit to the employee. This also applies to items that are not cash, but cash be converted into cash, such as securities or precious metals.

There is hope though. You can give non-cash gifts and awards with a combined total of $500 annually. The fair market value of the goods must not exceed $500, and if they do, then the difference is considered a taxable benefit. For example, you bought an employee a couple of gifts over the year and the total was $750. In this case, the difference of $250 ($750 – $500) would be added to their income and taxed accordingly.  You can also give gifts or awards for long-term service every five years, so at the 5, 10, 15 etc. years of service marks, and up to $500.

Items of small or trivial value will not be considered a taxable benefit. These items are not included when calculating the total value of gifts and awards given in the year for the purpose of the exemption. Examples of items for small or trivial value include: coffee or tea; T-shirts with employer’s logos; mugs; plaques or trophies.

You may be thinking, well why don’t I just throw them a party. That won’t be taxable, right? Well, maybe. If the social function costs less than $100 per person, then it won’t be taxable. However, if you cover the cost of transportation home (taxi fare or other transportation) or accommodation this must be included in the $100 per person. If the total exceeds $100 per person, then the entire amount is a taxable benefit. For example, you throw a huge party for staff and the cost comes to $125 per person, then you must add to each employee $125.

If you want to do something for your employees on birthdays or anniversaries, then start a social committee. The social committee would be set up by, contributed to, and controlled by the employees. They could put so much per week into a fund that would then go to pay for cake, gifts, etc. for the birthday person. The employer should not contribute any funds to this social committee, as then it becomes a taxable benefit for the portion that the employer contributes. Now, you, as the employer, could have some say in when, where, etc. the party takes place, you just can’t contribute any monies towards it.

Sadly, in this day and age of taxing us to death, you need to check that what you’re giving your employees won’t become taxable to them. It’s always advisable to check with your bookkeeper, accountant, or even Canada Revenue Agency, before you give anything to an employee.