The Best Way to Deal with Minimum Wage Increases

One month from today minimum wage increases from $12.20 to $13.60 and next year it will be $15 per hour.

This will have a detrimental effect on many businesses. Many businesses will suffer worse margins and less profit, here how to do the OPPOSITE:

 

Don’t increase prices

Your choice is the same as everyone else: less employees or less profit.  The only way to maintain your current margins is working with fewer people. In a restaurant example, if your food costs as a percentage of sales are already low vs. industry benchmarks, increasing your prices with respect to food costs would be bad for you.

Change payroll practices

We have worked with customers in various industries to prepare them for the minimum wage hike since late 2015: normalizing 5-hour shifts and eliminating people who work less than 50% (100% being 40 hours per week). Fewer people means considering appropriate times to do prep work (pre-portioning, mixing etc) to mitigate the busy times with fewer people (even if it is only 1 less person). Also, this means getting the fewer remaining staff – personable kitchen staff, for example, to help with guest service. A more radical/specialized change in restaurants is conveyor ovens.

5-hour shifts

I have been so impressed with the improvements our restaurant customers have made, effective Aug 1 our own office enjoys 5-hour shifts. Shifts under 5 hours, employees are not entitled to any breaks.  Breaks during the typical workday are not used to re-energize or restore attention. The end goal of efficiency is to remunerate employees as much as they did when they had 8 hour days, this will, in essence, give them a higher raise than the increase in minimum wage.

Now, most of our customers are no longer concerned about the minimum wage increase since it does not affect them anymore (they pay more than the minimum wage: they hire 2work them like 4 and pay them like 3. This is the same as paying someone an 8-hour wage for 5 hours of work). If you can give them an increase of paying them 8 hours at their “old rate” for 5 hours of work you could go as far as eliminating tipping.

For example, if an employee is currently earning minimum wage at $12.20/hour + tips, if you reduce their shift to 5 hours and reap the same benefits you could afford to pay them $18.30/hour and eliminate tipping. 

($12.20 x 7.5 hours = $91.50 / 5 hours = $18.30/ hour)

The check to make sure you are on the right track is if you pay someone $18.30 per hour, the employee should also “pay the company” at least $36.60 per hour (giving you $18.30/hour as their contribution to overhead). Profit per employee is an important metric SwissBooks will track for you.

I am confident that in the long run, this is better for Canada, making us a little more like Switzerland etc. where people have a career in every type of work. The work is done with pride, and this will only help your reputation and your business, and the quality of product and service across the board should increase to society’s benefit.

Advertisements

2017 General Holidays & General Holiday Pay in Alberta

For more detailed information about General Holidays and General Holiday Pay please visit the Alberta Employment Standards website here. You can click on the holiday for specific details on that date/holiday (also linked below for 2017) or you can give Employment Standards a call for advice:  Phone: 780-427-3731   Toll-Free: 1-877-427-3731

The Employment Standards Code of Alberta designates the following nine days as general holidays in Alberta:

  1. New Year’s Day
  2. Alberta Family Day
  3. Good Friday
  4. Victoria Day
  5. Canada Day
  6. Labour Day
  7. Thanksgiving Day
  8. Remembrance Day
  9. Christmas Day

The Employment Code also recognizes any other day designated as a general holiday by an employer. If an employer designates a general holiday, all rules pertaining to general holiday pay will apply. (This is not mandatory)

Here are some optional holidays.

  • Easter Monday
  • Heritage Day
  • Boxing Day

Do I need to pay my employees holiday pay?

  1. First, employees are either ELIGIBLE or INELIGIBLE to holiday pay
  2. Second, it depends on whether or not the day of the holiday lands on a normal work day for the employee or not
  3. Third, it depends on whether the employee works that day or not

Please refer to the Holiday Fact Sheet  from Alberta Employment Standards to see whether your employees should receive General Holiday Pay or not.

How do I apply for a business number (BN)?

 A business number (BN) is a common identifier for businesses in their dealings with the government. Each business, whether it is a sole proprietor, partnership, corporation, trust or other organization, requires one BN for it’s legal entity. Whenever you deal with the government you must provide your BN to identify the legal entity you are referring to. Just like when you provide your social insurance number to identify yourself when you call CRA or file your personal tax returns.

There are four major program accounts:

  1. RT – Goods and Services Tax/Harmonized Sales Tax (GST/HST) (see bullets below for reporting periods available)
  2. RP – Payroll
  3. RC – Corporate Income Tax
  4. RM – Import/Export

Registering for a business number for your business can be done online and is simple. Simply forward us a copy of your incorporation documents and ask us for a “Fiscal year-end recommendation” specifically for your business.

If you are registering for a GST number:

  • If your annual taxable sales are “$1,500,000 or less” your assigned reporting period is annual. Monthly or quarterly is optional but is not recommended (please contact us if you have any questions)
  • If your annual taxable sales are” $1,500,000 up to $6,000,000″ your assigned reporting period is quarterly with monthly reporting period being optional.
  • If your annual taxable sales are “More than $6,000,000” your  assigned reporting period is monthly.

Please click here once you are ready to register your BN through the Canada Revenue Agency’s website.

Share with someone that could use some advice in this post or save some taxes
 
For every person you refer we’ll give you a free month or a gift card equal to 1 month of service of your referral – whatever is bigger! Up to to $600!
 
Anyone you refer gets a free month of bookkeeping!
 
THUT data capture technology extracts data from bank, credit card and online statements and allows for automatic bank reconciliation.
 
THUT uses artificial intelligence to locate and extract line item and tax summary data from receipts and exports it into a csv file.
 
Cleansing algorithms allow it to extracts transactional data that is 100% accurate.
 
Send us your prior financials and we will prove to you how our value is unrivaled in Canada.
 
➤➤➤

Paying Canada Revenue Agency (CRA) / Receiver General

For safety reasons, we recommend you to pay online through your online banking system or through CRA’s My Payment system. You may also pay at the bank if you have the original payment form mailed to you from the CRA. (Instructions for CIBC online banking below)

You can use  CRA’s My Payment system if you have an online banking account at the following financial institutions that currently participate in Interac Online:

  • BMO Bank of Montreal (personal accounts only)
  • Scotiabank
  • RBC Royal Bank
  • TD Canada Trust
  • Envision Financial
  • Libro Credit Union

For detailed instructions on how to use CRA’s My Payment system please click here.



If you bank with CIBC you can pay through CIBC’s online banking.

To pay through your CIBC online banking:

  1. Log onto CIBC banking online
  2. On the left hand side of the screen click “PAY & FILE TAXES”
  3. Click the blue “CONTINUE” button on the bottom right hand side of the screen
  4. Select “ADD PAYMENT TYPE”
  5. Choose the correct payment type
  6. Click “NEXT” and enter in the information required
  7. Click “ADD THIS PAYMENT TYPE”

Once the payment type is added then whenever you click “Pay & File Taxes” select the payment type, type in the dollar amount and date of payment and follow through with the payment until you receive confirmation.

Share with someone that could use some advice in this post or save some taxes
For every person you refer we’ll give you a free month or a gift card equal to 1 month of service of your referral – whatever is bigger! Up to to $600!
Anyone you refer gets a free month of bookkeeping!
THUT data capture technology extracts data from bank, credit card and online statements and allows for automatic bank reconciliation.
THUT uses artificial intelligence to locate and extract line item and tax summary data from receipts and exports it into a csv file.
Cleansing algorithms allow it to extracts transactional data that is 100% accurate.
Send us your prior financials and we will prove to you how our value is unrivaled in Canada.
➤➤➤

CRA’s My Payment System

Yes we know it looks complicated but it doesn’t have to be! Below we list step by step instructions to use CRA’s My Payment System for paying your payroll remittances, GST, corporate income tax and individual income tax.

CRA My Payment System

To pay your Payroll Source Deductions (PD7A)

  1. Click the link above
  2. Click “START MY PAYMENT” button
  3. Click “PAYROL SOURCE DEDUCTIONS” under the “Businesses” heading
  4. Click “REGULAR REMITTANCE” if you pay monthly/ “QUARTERLY REMITTANCE” if you pay quarterly/ “BALANCE OWING REMITTANCE” if you are paying for a current/prior year outstanding balance/ “ARREARS/PENALTY/INTEREST” if you are making a payment for interest/penalties assessed
  5. Enter your account number (your company’s 9 digit business number followed by RP0001) ie. 123456789RP0001
  6. Enter all of the required information from your PD7A report you received from our office
  7. Click “NEXT”
  8. Confirm the account numbers and amounts are correct
  9. Click “CONFIRM AND PROCEED TO PAY” or select the radio button to modify payment.
  10. Click “PAY NOW”
  11. Choose your bank and enter in your banking login information and proceed to pay/confirm


To pay your Goods and Services Tax (GST/HST)

  1. Click the link above
  2. Click “START MY PAYMENT” button
  3. Click “GOODS AND SERVICES TAX/HARMONIZED SALES TAX” under the “Businesses” heading
  4. Click “PAYMENT ON FILING” after we have filed your GST return/ “INTERIM” if you are making a quarterly instalment/ “AMOUNT OWING” if you received a letter or statement from CRA / “BALANCE DUE” if you are making a payment on the remainder of tax you owe
  5. Enter your account number (your company’s 9 digit business number followed by RT0001) ie. 123456789RT0001
  6. Enter the remainder of the required information
  7. Click “NEXT”
  8. Confirm the account numbers and amounts are correct
  9. Click “CONFIRM AND PROCEED TO PAY” or select the radio button to modify payment.
  10. Click “PAY NOW”
  11. Choose your bank and enter in your banking login information and proceed to pay/confirm


To pay your Corporate Income Tax (T2) 

  1. Click the link above
  2. Click “START MY PAYMENT” button
  3. Click “CORPORATION INCOME TAX” under the “Businesses” heading
  4. Click “PAYMENT ON FILING” after we have filed your corporate tax return/ “INTERIM” if you are making a monthly instalment/ “AMOUNT OWING” if you received a letter or statement from CRA / “BALANCE DUE” if you are making a payment on the remainder of tax you owe
  5. Enter your account number (your company’s 9 digit business number followed by RC0001) ie. 123456789RC0001
  6. Enter the remainder of the required information
  7. Click “NEXT”
  8. Confirm the account numbers and amounts are correct
  9. Click “CONFIRM AND PROCEED TO PAY” or select the radio button to modify payment.
  10. Click “PAY NOW”
  11. Choose your bank and enter in your banking login information and proceed to pay/confirm


To pay your Individual Income Tax (T1) 

  1. Click the link above
  2. Click “START MY PAYMENT” button
  3. Click “INDIVIDUAL INCOME TAX” under the “Businesses” heading
  4. Click “2014 – TAX OWING” after we have filed your personal tax return/ “TAX INSTALMENTS” if you are making an instalment/ “PAST TAX OWED” if you received a letter or statement from CRA
  5. Enter your social insurance number (SIN) ie. 123456789
  6. Enter the remainder of the required information
  7. Click “NEXT”
  8. Confirm the account numbers and amounts are correct
  9. Click “CONFIRM AND PROCEED TO PAY” or select the radio button to modify payment.
  10. Click “PAY NOW”
  11. Choose your bank and enter in your banking login information and proceed to pay/confirm
Share with someone that could use some advice in this post or save some taxes
For every person you refer we’ll give you a free month or a gift card equal to 1 month of service of your referral – whatever is bigger! Up to to $600!
Anyone you refer gets a free month of bookkeeping!
THUT data capture technology extracts data from bank, credit card and online statements and allows for automatic bank reconciliation.
THUT uses artificial intelligence to locate and extract line item and tax summary data from receipts and exports it into a csv file.
Cleansing algorithms allow it to extracts transactional data that is 100% accurate.
Send us your prior financials and we will prove to you how our value is unrivaled in Canada.
➤➤➤