If you are a sole proprietor your tax payment deadline is at the end of April– but your tax filing is not due until June.  Also, if you owe more than $6000 in a year you need to start paying installments for the next year based on an estimate of what you will owe for next years taxes. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/important-dates-individuals/filing-dates-tax-return.html

If you are a corporation your tax payment deadline is in 3 months. Filing deadline is 6 months from fiscal year end. So if you have a September year end the payment deadline is December and the filing deadline is March. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-income-tax-return/when-file-your-corporation-income-tax-return.html

So you can either estimate your taxes and pay them, get them done early and know how much you owe or wait until you file and then pay penalties and interest.  

Note: interest at the CRA is around 5% so you might be better off keeping your money and paying the interest if you can get more than 5% benefit from it.

We can help you manage your deadlines! bookkeeping@onyxfireonline.ca

Your finally big enough to need help – what should you consider before for hiring your first employee?

This is directed to business owners in Alberta but should work with slight modifications for all of Canada.

Contracts and Paperwork

Before you hire someone you need to get a contract with them before they start to make sure that you are legally covered.  This means it needs to be signed and dated before the first day they walk in.  If it is signed after the employee starts it is not looked at the same way under the law as if it is signed before they start.

• We can help you get a contract but you may want to get a laywer to look at it or generate it to make sure you are covered.
  • Make sure it clearly states that employee is only entitled to the minimum standards per current Alberta labour standards otherwise if an employee ever takes it to court – the court can give them a large settlement.
• Before you can pay them you need the TD1 and TD1AB filled out
• We can get these for you or you can look them up online.

WCB Alberta

• You need to get WCB coverage, Make sure you cover yourself for the minimum so that you have legal coverage in case of injury.  Decide if you wan to cover volunteers.  We can help you sign up – you will need a credit card and it is online.
  • Many construction contracts will not hire you without a WCB clearance – once you have employees they can not cover you- you must cover your employees.
  • There are a few industries that are not required to have WCB but you can get it optionally.  We can help you figure out if you are in these industries – but coverage is cheap legal coverage for you from employees and should be considered.

What is your payroll schedule going to look like?

• Cut off must be at least 5 business days – so if you are paying on the last day of the month then you need a cut off of the 25^th.  If bi weekly lots of companies cut off on Friday and pay the next Friday.
• ATB adds an extra day to bank process times – if you are banking with ATB an extra day will need to be added so Thursday cut off for following Friday because I need to submit payroll to apps usually by 9 am on Friday for the next Friday pay.
• Do NOT pay on the cut off date – this ends up being a lot of estimation and you could end up overpaying employees if they quit before pay day.  Save yourself greif and give yourself enough time to get payroll calculated.

How would you like to pay?

• We can set you up with an app that has an employee portal, direct deposits and sends the T4s- there are several out there – we do not recommend at this time using QuickBooks online payroll unless you have very simple payroll needs.
• Or we can calculate manually and send you the paystubs and you can pay by eft or through your bank.
• Note Paystubs should not be sent through email – it is not secure enough for the personal information.

Wage rules (check Alberta Standards as these change from time to time)

• Minimum wage for adults is $15/hour
• If you ever call in an employee you need to pay at least 3 hours even if you if you cancel after they arrive.
• Employees must be paid for meetings and trainings
• Anything under 5 hours does not require breaks paid or unpaid
• Employees who work over 5 and less than 10 need to have 2 paid or unpaid breaks in the 6 hours which can be taken as a 30 minute break.
  • Note you can choose to add extra breaks – just be aware that removing them later will be an issue.  IE 2 – 15 min breaks paid  and a lunch half hour unpaid.
• Any employee who works over 8 hours is entitled to Overtime.
  • No employee can ever work more than 12 hours (start to end time inclusive of breaks)
• Any employee who works over 44 hours a week is entitled to overtime
• You are not allowed to deduct from employees earnings for uniforms, cash shortages, breakage…
• Vacation can either be paid out every check or accrued and paid out when taken – minimum is 2 weeks (4%)
  • If it is paid out on each cheque make sure it is in your contract and explained to them that when they are on vacation they will not be paid – but they will still need to take vacation (could be when your off over Christmas…)  Some employees do not understand paid out vacation.

Stat pay

• With the current regulations (though they keep changing every government change) you do not need to pay stat if the employee does not normally work that day – so most employers that have part time people try to avoid Monday employees because most stats are on Mondays.  It is not a huge deal but just so you are aware.
• You will also need to decide if your stats are only the legal ones – or if you are adding Boxing day, Heritage day and Easter Monday – these can be closed days that are not stats.  If you pay one of them once then you will end up then you will need to keep paying them or there will need to be a new agreement with employees signed.
  • Make sure that this is detailed in your contract
  • If you are taking a company wide closed days (between Chirstmas and New Years is common) make sure it is in your contract and detail what employee will and will not be paid for.  IE we are closed from noon Christmas eve to January second every year – employees will be paid for
    • Half of Chirstmas Eve if they work the first half of the day
    • Christmas day and New years day stat
    • All other days can be taken as vacation if there is enough in the vacation accural or will be time off without pay
      

      Safety

• If you get 5 workers – I think volunteers count too – you will need to set up a Health and safety representative – chosen by employees.
• Over 20 then you need a Health and safety commitee – with representatives from employees and management

Overall, hiring your first employee is an exciting and complicated time – decisions you make will be harder to change once the employees are hired – not impossible but they take longer then you think they should.    Most importaint is to make your decisions and write up a contract BEFORE you hire your first employee.  Make sure all employees sign BEFORE thier first day.

If you have any questions contact us

We are all too busy to stop every trip and write down the correct mileage log information for taxes.  Very few people remember to do it and even fewer do it properly.

Let me introduce you to Triplog 2.0.  There are several apps out there that do this now but I like Triplog the best and recommend it to everyone who needs to keep a log (business owners, reimbursed employees, …)  Also it is cheaper than most out there and who likes to spend more than they have to.

 

Triplog 2.0 automatically monitors your phone and when you start moving it records your mileage log for you.  After the trip you can tell it business or personal and if you have several vehicles you travel in you can choose vehicles too- I suggest adding an extra vehicle for when you are a passenger.

I have found that this app does not effect my battery or data usage much – barely at all.  Last month even though I did a big trip and all my driving all month it was less than 9 MB total for the month.  If you drive all day it will be higher but really most of what the app uses is GPS not data.

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How to get it

1. Go to your app store and download Triplog 2.0 or their website https://triplogmileage.com/mileage-tracking-app/
2. Log in and try it for 30 days for free – see if it works for your needs.
3. Play around with it
   1. Set up your user
   2. In the top left hand side of the app is three lines- when you click them you get a lot of things you can customize
      1. Add vehicles
      2. name locations – home, office, staples…
      3. There is a route planning section I have not played with because I do not need it.
4. As you drive – it will record.  Check that all of your business are business and personal are personal
   1. General rules
      1. If you are driving to your office from it is personal (or back)
      2. If you are driving to a client it is business
      3. If you are going to Costco, Staples, Walmart… and you pick up a business item it is business- make sure you have a separate business receipt and take a picture of it for your receipt app (hubdoc, receiptbank, autoentry… whatever you use.)  I do not use the save receipt option in triplog because it does not attach it to bookkeeping software – though if you needed extra proof that a trip is business you could take the picture here and in your receipt app.
5.   Label locations you frequently go to for business to make it easier
   1. Do this by clicking the address after you arrive and it is logged.
   2. Clicking on that address will open up a little window that shows a map, address and a box for location name
   3. Save it as the name you want – this could even be a customer number if that would make your log easier in your head.
6. In the top right hand corner is Magictrip – I leave mine on
   1. Click it and read what all the options mean – there are a lot of options.
   2. I have mine set for
      1. Fully automatic tracking
      2. Less responsive, less battery
      3. 8 MPH or 8 km/h start speed (I am not a runner so if I am going this fast it is in a vehicle)
      4. Set business and personal times – this is great
         1. If you drive mostly for business between 6 am and 6 pm then set business and regular vehicle for those hours as business.  If after that it is usually personal- set that too.  From then on all trips in your mileage log will default to business or personal as set – then you just need to change it for the unusual ones.
7. To change a trip in your mileage log- click the P or B in the trip log and change it to what you want.
8. Reports can be generated and given to bookkeepers to record your deductions and get you the tax money back you deserve.
9. If you have any questions or issues email me and we can work through it together – Bookkeeping@onyxfireonline.ca

Bookkeeping is not your favorite task.  That is why you are not  a bookkeeper.  But there are several things you are required by law to do that can land you in hot water with the CRA if they are not done.  There are some simple things you can do to help you out if you want to stay complaint.

 

1. Allocate time each week to bookkeeping

• Don’t hold your entry until the end of the month. It can become overwhelming.  Worse waiting to the end of the year when you can not remember what the receipts are for.
  • Look at Hubdoc as a method of getting your receipts together.
• Regular entry lets you see what the business is really doing. It gives you a sense of cash flow and where your expenses are going.
• Looking at your books shows you if you are profitable and following the 80 – 20 rule, which 20% of your customers are making you the 80% of your profit.

 

2. Open SEPARATE bank accounts for business

• You need a bank account for the business. All income and expenses need to go through this account.
• If you use a credit card get one that you use exclusively for the business.
• When the CRA comes looking at accounts they will “follow the money” if you are using the business accounts for personal transactions it gives them reason to dig deeper into your personal accounts.
• You bookkeeping is much simpler if you are only looking at business transactions. If you know that all the Walmart expenses were for business then you can more easily separate it from your Walmart you bought for personal reasons.

3. Get accounting software

• Yes you can do your bookkeeping in excel or on paper but it is really much easier to use something that was designed for the process. You would not use a toothbrush to paint a wall, use a real accounting package to do your bookkeeping.
• There are several options depending on your size and budget
  • QuickBooks Online is for small businesses
  • QuickBooks Desktop is better for bigger or complicated businesses, multi-currency and or inventory
  • Sage 50 is like QuickBooks desktop and rumor has it they will have a full accounting system online soon. Their online version currently is just for small businesses and interacts well with the desktop version for your accountants and bookkeepers
• Make sure your data is being backed up

4. Know when you need to apply for a Business number and start collecting GST

• Once you incorporate you need to get a business number. But not necessarily a GST number and payroll number.
• Even if you are a sole Proprietor and do not need an corporate tax number you still need a GST number or Payroll number once you qualify for those accounts.
• Payroll number (RP) must be registered for BEFORE you hire your first employee. Once you hire someone you need to start paying source deductions, there is no exception here and as trust monies the CRA has departments specifically to make sure you are compliant and paying Payroll and GST.
• GST number (RT) needs to be registered for in the quarter where your income will be $30,000 for the year. This is one of the reasons to keep your books up to date- how do you know when you reach the $30,000 limit in a year if you are not keeping on track with your bookkeeping.

5. Keep your receipts and get a filing system

• According to CRA rules you need to keep receipts and paperwork for 7 years- all receipts and related paperwork.
• If you get the receipts in electronic form, you can keep them in electronic form, however if you got them in paper worm you need to keep the paper.
• Payroll papers need to be kept for 7 years after you are done paying the employee. Therefore, if you have an employee for 15 years, their TD1 form needs to be kept for the 15 years that you employed them and 7 years following.

6. Or you can get a bookkeeper

• If you have a professional bookkeeper they know when you need to register. They understand the filing of GST and payroll deductions.
• They can organize your receipts for you and most will give them back to you for storage so that if you get audited they are all in one place
• They can give you reports on your business and explain them to you
• They get discounts with accounting software providers, and if you do not want your own copy of desktop software they can use their copy and you do not need to buy it. For online versions, either your bookkeeper or you will need to pay for it.  Your bookkeeper can help you with which software will benefit you both.
• At Onyxfire online we are Quickbooks online Advanced and Desktop proadvisors along with Hubdoc certified.  Consider us to get your bookkeeping done.
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