Category Archives for "Employees"

Working from Home – How do the New Rules for Office Expenses Work?

By Randall Orser | Business , Covid-19 , Employees , Personal Income Tax

There is good news for those of us working from home, due to the pandemic and under new CRA guidelines we will be able to choose between using a new temporary flat rate (only for 2020) or using the detailed method to claim expenses.  This will simplify the process for both employers and employees and will reduce the compliance burden for employers who usually provide T2200 forms to their employees.  However these new rules only apply to employees, nothing has changed for those who are self employed working at home.  Here are some of the highlights:

Eligibility - to claim this temporary flat rate you must meet all the following conditions:

  • You worked from home in 2020 due to the pandemic (this applies even if you chose to work from home).
  • You worked from home more than 50% of the time for at least four consecutive weeks in 2020.
  • You are claiming home office expenses only and no other employment expenses.
  • You were not fully reimbursed by your employer for all of  your home office expenses.

How it works: You can claim $2 for each day you worked from home during the four consecutive weeks mentioned above, plus any additional days you worked at home in 2020 because of the pandemic.  The maximum you can claim is $400.

Why it is simpler: You don't need to calculate the size of your workspace, keep receipts or ask your employer to complete and sign Form T2200 or Form T2200S a shorter version that can be used if you opt for the detailed method calculate your home office expenses.

How to make the claim: First count the number of days you worked from home in 2020 due to the pandemic including part days and multiply that by $2 per day up to a maximum of $400.  You will then use form T777S - Statement of Employment Expenses for Working at Home Due to COVID-19 to enter these amounts and attach it to your 2020 income tax return. 

The detailed method to claim expenses is much more complicated.  

  • You have to have chosen to work from home or your employer required you to work at home. 
  • You were required to pay for expenses related to your home workspace and directly in your work.
  • You must have worked in your home workspace more than 50% of the time or for at least four consecutive weeks, or you used the workspace only to earn employment income.
  • You received a signed T2200 or T2200S from your employer.
  • You can claim office expenses as well as office supplies but they must be separated between employment and personal use.
  • Eligible expenses include rent, electricity, heating, home internet access fees, water, maintenance and minor repairs.
  • No eligible expenses include mortgage interest, principal mortgage payments, internet connection fees, furniture and capital expenses.
  • To claim utilities, rent and other expenses you need to allocate them reasonably by taking the area of your workspace and divide it by the total finished area of your home.  The CRA provides extensive guidance on calculating workspace use.  They also provide a comprehensive list of office supplies that are deductible or non deductible.

Should you choose the flat rate or the detailed method? - this will depend on your own personal circumstances.  It might make sense to go for the detailed method if you rent your home because included in your rent are expenses such as insurance and property taxes which you cannot claim if you own your own home.  For homeowners your eligible expenses may only be utilities so the fixed method may provide a deductions similar to that under the detailed method. 

The CRA website or income tax preparer will be able to provide you with more information to help you to decide which method you should use to claim your workspace expenses.

From an article by Margaret Craig-Bourdin

Tips to Improve your Brand Strength

By Randall Orser | Employees , marketing strategy , Retail , Small Business

For your business to have a competitive advantage you need to have a brand that is strong and authentic.  It takes a long time and lots of persistence to build your brand but the benefits are worth the work.  A strong brand has advantages inside your company and in attracting customers.

  • If your brand is strong you are more likely to attract the best talent.  Not many job seekers will apply to company that has a bad reputation.
  • Your profits will increase as many customers are willing to pay more for products that they trust and value.  
  • More loyal customers, customers will accept higher prices and will come back for more.  Over 40% of consumers say that brand consistency is important when deciding if they will be a loyal customer.  
  • During an economic crisis consumers will look for a strong brand with a competitive edge over weaker competitors and shareholders are more likely to value the brand's potential.
  • Brand equity will give your company the maximum chance of coming back from any negative publicity.

How can you develop a strong brand?

  • Know what your brand's purpose and passion is and why your business exists, these are the basic building blocks.  You then need to define your ideal customer and what your products can offer them.  Get feedback from your target market and cultivate customer relationships to get their feedback.
  • Create a set of brand identity guidelines that are comprehensive and distributed throughout your company and beyond.
  • It is important that you continually communicate with your customers to make sure that your message is resonating with them.  Your brand message should not change during the life of your company. However it can grow and adjust slightly to suit your audience but it should continue to be something that your customers recognizes.  
  • When you update your logo and marketing materials make sure that your logo remains standard and easily recognizable on advertisements and social media.
  • Always be consistent this will continue to build your brand strength.  Consumers will try something new from you if you are always consistent in your message and product quality.  They are not likely to react well to anything that does not align with the company values and image that they are familiar with.

Creating a strong brand takes a lot of effort and expertise and can only take your business so far.  So it is important to target the right potential customer.  You will never please everyone so target people with similar values and beliefs.  What can you offer that is unique to your company and makes you different from your competition so that you stand out and are able to connect with your customers.

From an article by Justin A Staples

Why Customer Reviews are Even More Important for your Business

By Randall Orser | Business , Employees , Retail

As more people are shopping and doing business online customer reviews have become more important.  You might think that getting critical or bad reviews may be damaging to your business but that is not always the case.  Customer reviews are an important consideration for new customers and should be encouraged. Customers are doing much more online research before making a purchase and 90% of them read online reviews before visiting a business.  

A recent survey showed that online review engagement has more than doubled during the Covid-19 pandemic.  More people are doing business online and cautious customers are reading reviews so that they know what to expect when they visit your business.  You are more likely to get a visit from new customers if they see reviews from other happy customers who rave about your business and employees and that it is run safely.

Reviews build your credibility - reviews are a large part of the online reputation of your business and can greatly enhance customer trust.  88% of consumers trust online reviews as much as personal recommendations and 72% say that positive reviews help that to have trust in a local business.

Reviews increase sales - When potential customers read reviews they are more likely to purchase something if other people have already done so.  The concept of people following the actions of the masses is called "Social Proof".  As more people are likely to enter a busy restaurant than an empty one customers are more likely to make a purchase if they believe that it is a good one.  

An Invesp infographic showed that:

  • 72% of consumers will only purchase after reading a positive review
  • 92% of people will buy from a local business if it has at least a 4-star review
  • Consumers are more likely to purchase 31% more from a business with excellent reviews.

Reviews give you the chance to interact with your customers - You can reinforce positive comments with thanks and rectify negative ones by showing that you care and solving any problems.  Interaction with your customers is very important to make them remember your brand and this works both ways good and bad.  Interactions with your customers help to build brand loyalty and support for your business and make them more likely to recommend you in the future.

Here are some of the most important review platforms that you should considerate to collect reviews for your business:

Google My Business - is a free tool for businesses to manage their online presence across google. Once a business verifies their information and complete their Google my business registration the users can start to leave reviews.   Google customer reviews show up in searches improve SEO.

Facebook - is an important business review site. Businesses need to create a Facebook business profile and the process of leaving reviews is easy for customers as most already have a Facebook account.

Yelp - is the largest platform for online customer reviews and can be useful to any kind of business.  It has many useful review management tools and allows businesses to reply privately and publicly to customers who have posted reviews about them.

Tripadvisor - is the world's largest travel website and businesses can list on there for free. It increases exposure to a qualified audience and is ideal for travel related businesses such as accommodations, restaurants and attractions.

Better Business Bureau - is a business rated review system that educates consumers and assists them in finding trusted businesses.  A company profile on BBB will have a short bio, a history of any complaints about the business and a rating from A to F.

All businesses benefit from an online presence and customer reviews.  They give customers the best experience that they can and reviews let more people know about it.

From an article by Claudia Labonte-Kudzman

Building Better Business and Customer Service in 2021

By Randall Orser | Business , Employees , Retail , Small Business

In 2021 most businesses are looking for ways to rebound from the disastrous year that was 2020.  As well as dealing with the ongoing Covid-19 crisis, there are many new variables affecting business such as how products and services are offered and delivered which will have an impact well into 2021 and beyond.  There are also other market forces to consider including the impact of big-box stores and being able to offer a fast delivery service that customers now expect.

According to "Go-Daddy" half of the businesses that they surveyed had a website or active social media account before the pandemic hit.  The number has now almost doubled but businesses who want to maintain their market share in 2021 will have to go further and adopt platforms that do everything in one place, sales, email communication and marketing.  When businesses improve their digital systems and at the same time continue to offer top class customer service they are more likely to survive.  This could include using the Canadian platform Shopify so customers can order and pay online, and then offering them the bonus of fast local delivery.  For those businesses who are behind in creating a digital presence they should be thinking seriously about investing in online in 2021.

For those businesses who are wondering how they can compete with the fast delivery service offered by Amazon, or the prices offered by the big box stores the answer is don't.  It is better to work on offering what the big retailers don't - excellent customer service and the personal touch.  Once you have an online platform to offer customers a fast and easy ordering service, expand on that by offering free local deliveries, discounts for in-store pick up, curb-side pick-up, and personalized invitations on key dates such as birthdays and anniversaries.  

To make your customer's experience at your store memorable think about offering little extras such as a hand written thank you note attached to the bag, or a small free gift in the bag such as a chocolate, pen, bookmark, fridge magnet etc.

When you are building your brand it is important to work on earning customer loyalty, not only do you need them to return to your store for more of your products or services but also to recommend you to their friends, relatives and colleagues.  You need to tap into what is important to your clients.  If they like to support their local stores provide them with a branded reusable shopping bag.  Remembering their names and the names of their children will make them feel special.  Encourage repeat customers by offering VIP offers or discounts.  Positive interaction with your clients goes a long way to advertise your business and good service is always appreciated even from a distance.

From an article by iCapital

Working from home? Canadians may get a $400 Tax Deduction

By Randall Orser | Employees , Personal Finances , Personal Income Tax

In early December 2020 in a proposal announced by the Federal Government the CRA would allow employees working from home due to Covid-19 to claim up to $400 in modest expenses without questions.

For many of us, working from home has become the norm and it is likely to stay that way for a while if not become a permanent reality.  For many us it means working on the kitchen table, in the dining room or wherever you can set up office space, but wherever it is there is a good chance that your bills have increased.  For those people who usually work from home in their home office, deducting home expenses on their tax return is the norm, but with so many more people working in their spare room or basement the federal government is looking at ways to simplify the process of claiming expenses.

Currently salaried employees who work more than 50% of the time from home are currently eligible to deduct part of the expenses related to their workspace such as electricity, heating and maintenance as a work-space-in-the-home-expense.  

The proposal that the CRA would allow a $400 claim for modest expenses was In the government's Fall Economic Statement for 2020 released November 30th, and would help taxpayers to access the deductions they are entitled to receive while simplifying the tax filing process. It means that employees can generally avoid the T2200 form that their employer would normally complete to tell the CRA that the employee has incurred mandatory expenses while working from home.  

More information on this proposal is expected in the coming weeks.

From an article by Stefan Labbe

Incentives are Key During Salary Freezes

By Randall Orser | Budget , Employees , Small Business

As companies are struggling to survive under the grip of Covid-19 employee salaries have been mostly frozen and instead of pay increases different ways have to be found to keep employees motivated.   Companies are currently conservative with their profit projections and approach to changes hence the salary freezes.  In 2020 more than 36% of Canadian organizations froze salaries in 2020 compared to the pre-covid forecast of only 2%.  This trend will probably continue into 2021 as 46% of employers expect to freeze salaries in 2021.

As most companies are conserving cash and not increasing wages here are three ways that they can mitigate repercussions on business performance and employee engagement.

1.  Offer Incentives such as flexible work hours, extra vacation days, training opportunities and employee assistance programs.  This will deter talent from seeing new opportunities and encourage loyalty and promote the notion of teamwork and that the company will succeed if everyone works together to move the company forward.

2.  Communicate clearly with employees so that they are clear about the reason for the salary freeze, how long it will be in place and how it will affect their workforce.  Communications with employees should be on a regular basis especially with employees who are working remotely.  This helps employees to feel less isolated and increases transparency so that they know what is happening with the company so that there are no surprises.  

3.  Companies that do not keep up with salary increases run the risk of losing their talent to the competition.  Businesses able to increase salaries are going to try and attract the best talent and that will impact organizations that have to freeze or roll back salaries.   Pandemic support such as the Canada Emergency Wage Subsidy have enabled companies to furlough or give a temporary leave of absence that will keep employees in their jobs.  They can return to work instead of being laid off ensuring that talent is not lost and the employee will have a job despite the bleak labour market.

According to a survey by Morneau Shepell 76% of employers have reported that covid-19 has negatively affected their bottom line and in 2021 salary increases are going to be dependant upon how quickly these businesses can recover.

From an article by Sophie Nicholls Jones 

Surviving the Pink Slip During the Pandemic

By Randall Orser | Covid-19 , Employees , Personal Finances

The Covid-19 pandemic has devastated the Canadian labour market. According to Statistics Canada more than three million jobs were lost in March and April alone due to the economic shutdown. For those affected by job loss the impact goes beyond the statistics, and with all the uncertainty around us being out of work can be very scary.  The usual recommendations for when you have lost your job are no longer totally relevant today but here are some tips that will help you to deal with a sudden job loss during the pandemic.

1.  Understand the emotional toll that job loss is taking on you.  When you lose your job you lose your personal work relationships, daily structures and your self of self-purpose causing you to feel the same stresses which come with other forms of loss.  Asking "why me" does not have an answer any more because we have no control over a global pandemic.  You can expect to have feelings of anger, sadness and denial but it is important to try to cope and live with your new circumstances.   Look up free online programs and counselling that can help you deal with these mental health issues.  It is important to find some benefit out of your loss, so think about reinventing yourself maybe by taking some business classes on-line to help you in your job search.

2.  Review your finances and spending, not having enough cash to pay the bills is a major stress for everyone.  Financial experts recommend having an emergency fund with three to six months of expenses in it but for many people this is not possible. What you can do is track your spending to see where your money is going.  If you need money to buy groceries make sure that you are aware of all the financial and economic support available from the government.  You may also need to withdraw from your RRSP or TFSA to tide you over.  For those with no savings it is important to work on restructuring your debts contact your credit card provider or mortgage lender for assistance and think about using an unused line of credit with a lower interest rate to pay off credit cards with a much higher rate of interest.  

3.  Look for future employment, it is important to boost your LinkedIn profile, update your resume and network as much as you can. Being adaptable to change might be your best asset at this time.  Think about expanding your skills into areas that are in demand or are going to be in demand in the future.  For older workers experience is their best asset so think about offering your assistance to smaller companies that need help but can't afford a full time employee.

From an article by Ethan Rotberg

The Rise of the Virtual Restaurant

By Randall Orser | Employees , marketing strategy , Small Business

The pandemic has forced millions of people across Canada to stay home no longer eating out, giving rise to "the virtual restaurant". Virtual restaurants are also known as dark, cloud or ghost kitchens and they exist just to take orders from food-delivery apps.  They don't have dining areas or servers and often do not even have a storefront.  The only physical part of them is the kitchen where delivery drivers pick up. 

The first ghost kitchen started in New York in 2013 and the concept has grown from there as have the delivery apps that work with them.  Online food delivery is big business, the global market is currently US$84.6 billion and is projected to nearly double to US$164.5 billion by 2024.  In Canada a third of the $3.3 billion food delivery market goes through third party apps like Skip the Dishes and DoorDash.

There are many incentives for restaurant owners to have a ghost kitchen.  Labour costs account for a third of a restaurant's revenue and ghost kitchens cut these costs as front-of-house staff are eliminated.  Owners are able to offer a variety of food styles all from the same kitchen which can be set up anywhere such as rented spaces inside commissary kitchens, converted warehouses and even parked trailers.  

In 2019 a well known large restaurant conglomerate in BC launched 100 virtual restaurants in repurposed kitchen spaces.  In 2019 a Restaurants Canada survey of 9424 food service establishments found that only 4% of those responding operated ghost kitchens but 17% were planning on launching one in the next two years.  Sixty-two per cent of Canadian quick service restaurants already use a third party delivery service so especially due to Covid-19 it makes sense to create a ghost kitchen to further use these services.

Regulations for virtual restaurants depend on the province but they are generally treated the same as a brick and mortar restaurant.  They are inspected prior to opening and have regular and random inspections.  

From an article by Ali Amad

Will Wage Subsidies Help Retail Businesses?

By Randall Orser | Budget , Covid-19 , Employees , Retail , Small Business

Though the lockdown of last Spring was the right thing to do to keep people safe and flatten the curve, but it did a huge amount of damage to the economy.  Canadian retailers saw a 26% fall in sales during quarantine and 40% of retailers had to close their doors.  

Stores offering non-essential products and services such as clothing stores were the hardest hit, along with gas stations as people were no longer travelling.  However those selling essential goods found themselves thriving and even experiencing surging sales such as in groceries, home renovations, alcohol and cannabis.

Canadian retailers have been slow to transition to on-line sales but the pandemic has forced them to adopt e-commerce techologies to try and keep themselves in business and as a result e-commerce sales have more than doubled year over year.  Although it means that Canadian retailers face competition from others worldwide it also gives them the opportunity to expand their market share at home, especially if they sell niche products.  

In 2021 it is likely that retail business will still suffer a bumpy ride.  As we are seeing now there will probably be sporadic shut downs due to minor outbreaks but these are likely to be more regional.  During this time retailers can expect sales to fall and they will have to deal with high labour costs and the costs of having to comply with health regulations but it is hoped that on-line sales will be a stop-gap solution to keep them in business.

The federal government is continuing to support businesses by extending the Canada Emergency Wage Subsidy program into 2021, coving 75% of employees wages for those that are eligible.  This will help retailers to avoid bankruptcy and will give employees more disposable income to spend.  

Even with these new ways of doing business and federal help it is unlikely that many in the retail sector will survive another major lockdown.  However localized shutdowns will allow the majority of retailers to stay open and keep some revenue coming in until a vaccine arrives.

From an article by Ali Amad

Suffering from Pandemic Induced Burnout?

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

Covid-19 related stress and the blurring of your work life as a result of working from home may have you feeling out of balance. This is the same for the millions of Canadians who have transitioned to working remotely. While most enjoy not having to make the commute to the office many fill the saved time with more work which along with household chores, caregiving and navigating this covid-19 world can easily lead to burnout.  If this is you, here are some strategies that you might like to consider to help you gain greater ease in your life.

1. Work Smarter - it is important to have a schedule and stick to it.  Start work at a set time, check in regularly with work colleagues and team members and have a firm end of work day time.

2. Develop a Resting Strategy - make sure you plan to take quality rest time, whether it is daily, weekly or longer-term this will help you to retain the energy to have a successful work day.

3. Use the Pomodoro Technique - this involves breaking work down into intervals separated by short breaks, traditionally intervals are 25 minutes but they can be adjusted as necessary.  Do some work then take a break, go for a walk or do some other activity to allow your brain to rest then restart.

4. Watch what you eat and make sure to stay active - eating a balanced diet is important to stay healthy and prevent burn out, the better the fuel that you give your body the better you will feel and exercising is a must.  Think about taking an early morning walk before starting work it will set you up for the day.

5. Practice Mindfulness - Use small activities such as brushing your teeth or washing your hands to focus on your breathing and centring your body and self connecting. Be aware of how you are feeling, are you hungry or thirsty?

6. Name it to Tame it -  If you become upset or anxious about something ask yourself whether your feelings are anger, concern or exhaustion.  Naming aids help you to be self aware and manage your feelings.

7. Be Grateful - Take the time a few times a week to write down three things that you are grateful for, this will have a positive effect on your happiness and help with burnout, work-life balance and depression.

8. Practice Diaphragmatic Breathing - This involves inhaling deeply by expanding the lungs downward rather than inhaling using the abdomen or rib cage alone.  This technique has been shown to reduce stress and anxiety.

9. Release the Pressure - The pandemic has added more pressure and demands to our lives from personal and work responsibilities. Instead of adding more pressure by thinking that you should be doing things "better" or "faster" be kinder to yourself by recognizing when you are doing your best. 

10. Trust your Inner Resilience - Most of us want certainty in life so the uncertainty associated with Covid-19 is difficult to deal with.  It is important to realize that you are more adaptable than you think and what we are going through will not last forever.

11. Focus on the Here and Now - Instead of thinking that you cannot deal with the pandemic for another year focus on today and what you can do to make your life better.  We have to be positive that our businesses will come out of the pandemic stronger.

12. Make the Most out of Working Remotely - Make a new work schedule that allows you time for more rest and relaxation.  Learn how to keep your boundaries with others.  Learn new skills such as remote tools like Zoom.  Learn how to work effectively with your team while you are all apart.

From an article by Margaret Craig-Bourdin

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