“Open for Business”

A couple weeks ago the UCP introduced a new bill, Bill 2 or the Open for Business Act. As a business owner, this bill will directly impact the way that you are required to pay your employees. The changes will take place on two different dates, June 26th and September 1st of this year. The changes will be to: minimum wage for youth workers, general holiday pay, and banked time. Below is a summary of the changes, if you would like to read more about this bill you can check out the Alberta website here.

Minimum Wage on Youth Workers

This will be the first change to take effect, it will happen on June 26th and effect workers who are 13 to 17 years old. The new minimum wage for these employees will now be $13/hour. This is down from the current $15/hour. A couple notes about this change:

• The youth must be enrolled in school, if they are not a student the $13/hour does not apply to them.
• The $13 only applies to the first 28 hours worked in that week, anything over 28 hours must be paid out at $15/hour. Unless it is a break period, than all hours can be paid at $13/hour.
o For example: if a student works 32 hours during a non-break period, 28 hours would be at $13 and the other 4 would be at $15.
• If you are going to lower the wage on one of your employees, you must give them notice before the period in which this change would be taking effect.

General Holiday Pay

The rules surround General Holiday pay will be taking effect on September 1st. Currently, every employee receives 5% of their previous 28 days wages. The new rules will tweak this formula slightly, as not everyone will be eligible for General Holiday pay. The changes will be:

• You must work at least 30 days in the previous 12 months to be eligible
• It must be a normal working day for the employee, or you have actually worked on that day to receive General Holiday pay. If you do work on that day it will be 1.5 times their wage, if it is your normal working day they will be entitled to the same General Holiday pay as before.
o For example: If one of your employees is always off on a Friday, you would not need to pay them Good Friday, as it is not one of their normal working days.

Banked Overtime

This change will also take effect on September 1st. Currently, if an employee works overtime you must pay them or bank their time at 1.5 times their wage. This bill will bring back the older banked overtime structure, in which you only need to give them a 1:1 ratio for this time.

For example, if you an employee works a 10 hour day, you will now only need to give them 2 hours of banked time instead of 3.


If you have any questions about the Open for Business Act and how it will affect your payroll, give us a call today!

How to Save Money on Bookkeeping


Bookkeeping costs can add up quickly, and it doesn’t take long before it becomes overwhelming. This leads to business owners deciding that professional bookkeeping isn’t worth the cost. They may start looking for a bookkeeper on Kijiji who can do their books for cheap. However, like most things in life, you get what you pay for. Professional bookkeeping is worth the cost to the business owner. This may sound biased on a bookkeeping website, but it is the truth. Professional bookkeeping companies offer many advantages over a stand alone person you may find on Kijiji. While the costs are higher to use a professional bookkeeper, there are ways to help save you money. Four of these are all detailed below.


Keep it Business Only


When you have a business bank and credit card, they should be just that, business. When you start purchasing personal items with your business accounts the cost of bookkeeping starts to climb. There are multiple reasons for this. The first reason is that the number of transactions the bookkeeper has to enter has now increased. Another reason for the increased cost, is now the bookkeeper must determine if that transaction is business or personal. This may seem simple from the onset, however places like Wal-Mart can easily be a personal or business purchase. Both of these mean more time is spent on your account and this will be charged back to you.




If you bring your bookkeeper a grocery bag of crumpled up receipts, they will be happy to sort through them and organize your paperwork for you. However, they will not do this for free, your cost of bookkeeping can increase significantly based off how disorganized you are. If have a discussion with your bookkeeper about how they would like to see your paperwork, you can get it organized before stepping foot in their office. This will save you money because they can start working on it immediately.


Another aspect of organization, is to make sure you have everything when you bring in your work. If you are missing statements or receipts, this can slow down the process because now your work needs to be stopped and picked up at a later time.


Answer Questions Quickly


It is unavoidable, your bookkeeper will have questions for you. The quicker you are able to respond to their inquiries and provide the information needed, the less money it will cost you. This is because the longer a bookkeeper is away from your books, the more time they will need to get back into the rhythm of your company. Therefore answering questions quickly will benefit your wallet because the bookkeeper will be able to quickly and efficiently finish off your work.


Know your limitations


You are great at what you do, that is why you have started a business. However, bookkeeping is not always a skill that business owners have. In the quest to save money, you may decide that you can do it yourself. If you do not have any bookkeeping experience or training, this can lead to many costly mistakes. Having a professional bookkeeper fix these mistakes can cost thousands of dollars. If you know your limitations from the beginning you can eliminate the cost of fixing.


This is not to say that you can’t do some things yourself to save money on bookkeeping. Many companies are flexible to letting you do some of your own bookkeeping. For example, you can do your own invoicing in a system that works with an accounting program or you can share a file with your bookkeeper. Invoicing is something that you will most likely be doing yourself, working with your bookkeeper to find a process will save you money on your monthly bookkeeping fees, while allowing your bookkeeper to do the things you aren’t comfortable with.


Professional bookkeeping can be affordable, especially if you follow all of the tips above. Investing in professional bookkeeping will also save you money on your tax return and accountants bills. It is the right choice for both your wallet and your stress levels!

Dividends vs Payroll


If you are a shareholder in your business, you may have heard about going on the payroll vs. taking dividends. This post will not recommend one over the other, as that is a discussion that you need to have with your accountant. Every situation is unique and taking one or both, requires an intimate knowledge of your books and your goals, both personal and business.

Instead, this post will aim to help you understand what the difference between the two is.

It is important to note that this is only for business that have been incorporated. If you have a partnership or are a sole proprietor, you can not take dividends out of your business.




You may have employees on your payroll already, receiving income as a shareholder will be a similar process. You will be paid on a set schedule and usually as salary, which is a set amount each pay period. You will get a T4 at the end of the calendar year. However, the company will not need to pay any Employment Insurance on your income, only Canada Pension Plan and Income taxes.


The major personal advantage to being on the payroll is that you will have a personal income. This is advantageous to you for many reasons:


  1. You will be contributing to CPP and can claim this in your retirement
  2. It allows you to take advantage of other retirement savings like RRSPs & TSFAs
  3. It can be helpful when applying for personal loans


In addition, it can be a benefit to the company as the salary would be a 100% expense write off. This could be beneficial for helping the company stay under the small business limit.


Disadvantages of taking out payroll, is that you are taxed at a higher level personally. The company also needs to make the payroll remittances to the government for your salary. If you do not have any employees, you will need to make all the arrangements with the government to open up a payroll account. If you are late on a payment, it can lead to large penalties from the CRA.




A dividend will result in you receiving a T5. An example of how you receive dividend income, is that you write yourself cheques throughout the businesses fiscal year and then an accountant declares a dividend in the amount you have taken. You must be careful with this, as it can be easy to take more money than you intended to.  


As with payroll there are personal and business advantages to dividends. Personally, dividends are at a lower rate and do not necessarily follow the calendar year, which can help optimize your tax situation. The advantage for the company is that it does not need to make any sort of remittances to the CRA for dividends.


However, just because dividends are at a lower tax rate, does not mean that it is best for your personal tax situation.You may even need to make personal tax installments. This is something you should discuss with your accountant when making this decision.  


Both dividends and payroll hold their own advantages, and one or both may be right for you. It is important to talk to your accountant before you start doing one.

Payroll Obligations to CRA


As your business starts to grow you may need additional help around the office or the shop. Hiring an employee comes with obligations to the government that surprises many small business owners. This post will address these obligations, and help you better understand what having an employee means for your business. As a disclaimer, this only covers the general Canadian obligations and rules in Alberta, you will need to check if your province has specific rules for payroll taxes.


CRA Deductions

When you get an employee the CRA requires that you take deductions off their paycheques and remit it based on your assigned schedule. This is a major consideration of having employees, and can come with the heftiest fines if you ignore it. The CRA will levy 10 to 20% penalties if you are even a couple days late with your remittances. The reason the CRA is this strict with payroll deductions is because it is not considered the companies money, you are simply holding it in trust for the government.


There are three taxes that you generally must take off an employees paycheque, Canada Pension Plan (CPP), Employment Insurance (EI), and Income Taxes. The employer must contribute to both CPP & EI and remit both the employee and employer portions of all taxes to the CRA. While CPP is 1:1, the employer must remit 1.4 times the EI. There are ways to reduce this liability with providing a short-term disability plan for employees that meets the CRAs criteria. You can find information about that here.


To determine that you are taking the correct amount of income taxes off your employees paycheque, you need them to fill out both a federal and provincial TD1. Once you have filled out this form, you must follow their claims code when providing payroll services. Both the federal and Alberta 2019 TD1s are linked to below for your reference.

Federal TD1

Alberta TD1


Do these three taxes always apply to payroll items?

Payroll is not always simple and straightforward. There are many items that an employee can be paid for that are not just their wages. All of these different payroll items have different rules in regards to taxes. This can get extremely complicated and you have to take extreme care when preparing your employees payroll.

CRA has a helpful chart on what taxes apply to each situation, you can find that chart here.

CRA also provides a payroll calculator that can help your business, you can find it here.


Remittance Schedules


Based on the amount of your payroll, the CRA has different schedules for when you must make your payroll remittances. The more payroll you have, the more frequently you need to remit to the government. Below are two charts showing the different frequency levels and when those levels need to remit. Both charts are taken from the CRA website, here

Remitter Type

Remitter type Average monthly withholding amount (AMWA)
Quarterly remitters: new small employers Not based on AMWA. The monthly withholding amount is zero to $999.99 and you have a perfect compliance history.
Quarterly remitters: account opened for 12 months or longer From zero to $2,999.99, and you have a perfect compliance history.
Regular remitters From zero to $24,999.99
Threshold 1 accelerated remitters From $25,000.00 to $99,999.99
Threshold 2 accelerated remitters $100,000.00 or more

Remitting Frequency

Remitter type Remitting frequency Remitting period Remittance due dates
Quarterly Quarterly January 1 to March 31

April 1 to June 30

July 1 to September 30

October 1 to December 31

April 15

July 15

October 15

January 15

Regular Monthly Calendar months 15th day of the next month
Threshold 1 accelerated Up to twice a month 1st to 15th of the month

16th to end of the month

25th day of same month

10th day of the next month

Threshold 2 accelerated Up to four times a month 1st to 7th of the month

8th to 14th of the month

15th to 21st of the month

22nd to the last day of the month

3rd working day after the 7th

3rd working day after the 14th

3rd working day after the 21st

3rd working day after the last day of the month


Even if you fall in the Quarterly remitter section, you can choose to still be a regular remitter. As noted earlier, you need to make sure you are able to make these remittances on time to avoid the penalties. Therefore, choosing to be a regular remitter might help you stay compliant.


How do I pay these remittances?


There are multiple ways that you can pay your payroll remittance to the CRA. The CRA has compiled a complete listing here. Below are the most popular ways we, as a company, have seen employees use.


  • Online Banking, you can talk to your bank about the services they provide
  • My Payment, allows you to pay with credit card or debit online 
  • At the bank
  • Mailing in a cheque


Contact On-Core if you have any questions about your payroll obligations!


If you start a business, you will one day need to start charging GST on your products. Once you start charging it, you will also need to start doing remittances based off the schedule you have chosen. Like most things with the CRA, GST has many moving parts and rules. This post will only cover the basic rules of when to start charging GST on your products. If you are confused by GST and if you need to charge it, your bookkeeping professional will be able to help.

When do you need to start charging GST?


GST does not need to be charged by your company if one of the two situations applies:


  1. You sell only exempt supplies
  2. You are a small supplier.


Those two criteria might not mean too much to you as a business owner trying to figure out if you need to charge GST.


Exempt supplies are defined by the CRA here.  There are too many to be listed on this post, some examples of it are legal aid services, music lessons, and most health services performed by licensed professionals.


A small supplier is a business that has taxable sales that are less than $30,000 in four consecutive calendar quarters. The minute you cross over this threshold you must register for GST. If you remain below the $30,000 you can voluntarily chose to apply for and remit GST, but it is not a requirement.


How do you register for GST?


You can register for GST one of three ways:


  1. Business Registration Online, you can find information here 
  2. Submitting form RC1
  3. Calling the CRA at 1-800-959-5525


Remitting Periods


Once you have determined that you need to start charging GST, you must pick a reporting period. This means the frequency with which you need to file a GST return and remit the amount owing to the government. The period you may choose is based on your income. Below is a chart from the CRA website on your options for reporting period.


Annual taxable supplies threshold amounts Assigned reporting period Optional reporting periods
$1,500,000 or less Annual Monthly, Quarterly
More than $1,500,000 up to $6,000,000 Quarterly Monthly
More than $6,000,000 Monthly Nil


While annually does seem an attractive option if you qualify, there are a couple things you need to consider. The first is that it does not get you out of remitting money quarterly. If you owed more than $3,000 in the previous year in GST, you will need to make quarterly installments. If you neglect to make these installments, the CRA will charge you interest on your GST owed when you file if it is again over the $3,000.


When do you need to file?


It is important to ensure that you are filing and paying your GST on time. If you do not, the CRA will charge you interest and penalties and in extreme cases can even take money out of your bank account to cover the amounts owing.


The following is a chart for when you need to file & pay your GST by:


Annual 3 months after period end. For example, December period end, GST is due March 31
Quarterly Due the end of the next month after period end. For example, March period end, GST is due April 30.
Monthly Due the end of the next month after period end. For example, January period end, GST is due February 28.

For more information, you can check out the CRA website here.

Anywhere Bookkeeping

The accounting industry is changing and no longer do you need to come to an office to get bookkeeping and accounting services. Sharing a file is easier than ever and clients can do as much or as little work as they want. This post will briefly cover the advantages of using an online software.

The Software

On-Core is trained in, and works with two online accounting software’s. Below this section are pictures of each logo, you can click on them to be taken to their respective websites.

The first is probably the best known. Everyone has heard a radio ad or seen Danny DeVito on TV talking about QuickBooks Online. If you use QuickBooks Desktop you may have even seen a button for transitioning your desktop file to Online.

Transferring from desktop to online is relatively seamless whether you currently use QuickBooks desktop or not.

The second is a software from New Zealand, Xero. Xero has recently acquired Hubdoc and is working on transitioning into the Canadian market. Transferring from your current software to Xero is also relatively seamless.

Transferring to either of these is a great opportunity to clean up your file by eliminating accounts, vendors, or customers that are long inactive. However, with both, you will need to keep a copy of your old software as you will not be able to put in the detail of previous years, just opening balances.



Using online software is a paperless solution to bookkeeping. It can help to eliminate that storage room full of banker boxes that you have! You don’t need to hold onto that gas receipt from 2 months ago until you get to see your bookkeeper. You can simply take a picture, upload it, and toss it! It will be attached to the transaction in your online software and therefore easily accessible to anyone needing to see the backup.  



While not every transaction is able to be automated, these online software’s can eliminate some of the repetitive transactions, saving your company time and money. This is done by linking vendors to their respective accounts. For example, Shell would be automatically be coded to automobile expenses.


Instant overview of your business   

If you stay on top of doing your books, which with automation is a snap, you will know where your business stands whenever you need. Traditional bookkeeping only allows you to get monthly reports on your business after the month is over. With online software, you can work with your bookkeeper to know where your business stands at all times.


No more paperwork drop offs

With online software you no longer need to make monthly visits to your bookkeepers office. With it being paperless, you can get your bookkeeping done by any bookkeeper and not have the stress of needing to deliver your monthly paperwork to get reports.




Can be a little too easy

You may look at that header and think, how can it being a little too easy be a disadvantage? Online software make it easy to do it yourself. However, if you have not had any experience or training in doing your books, this can lead to mistakes being made. This mistakes will be costly to correct.




Online software is worth adopting. Bookkeeping companies are here to support you in the transition, ensuring that you can reap all the advantages of doing books through online software. On-Core has professionals that have been certified in both of these programs. We can train you on how to use these programs, and offer monthly support.


These programs can save you money, and On-Core is here to show you how!

Mileage Reimbursement


Using vehicles is an essential part of modern day business. Whether your employee needs to go visit a client, or goes to pick up stamps from the store. You need to know how to reimburse them for the kilometers driven.


Criteria for Reimbursing Kilometers to Employees:

There are three criteria that you must meet in order to make your employees mileage reimbursement tax free.

1). You must pay them according to the CRA’s reasonable rates. The CRA reasonable rate per-kilometer rate has gone up in 2019 (below is a chart with both the 2019 and 2018 rates). As an employer, you can choose to pay them more than these rates. However, all the reimbursement would become a taxable income to the employee.

2) You are only reimbursing your employees for business KMs driven.

3) You are not reimbursing your employee for any other expenses related to the use of the same vehicle. For example, you do not reimburse them for fuel in addition to kilometers driven.


2019 2018
For the first 5,000 KM $0.58 $0.55
For all KM after $0.52 $0.49


If you do not meet these criteria you must take CPP, EI, and income tax off the monies given to the employee for their KMs.

You can read more about this here, on the CRAs website.

If you have any questions, you can contact On-Core and our payroll specialists would be happy to help!

For information on tracking mileage if you’re a business owner, you can check out our post here. Which includes a free mileage log download sample. It is important to note, the same KM rates apply to business owners.

Employee Gifts & Awards


In December we did a post on employee gifts that pertained more towards employee gifts for the holidays. In this post we plan on expanding more into the year round rules on giving employee gifts and awards. We know that this subject can be a little dry, but it is vital that an employer understands these rules before giving gifts to their employees.

CRA Definitions


Gift – A gift must be for a special occasion, this can include religious holidays, birthdays, weddings, or a child’s birth.


Award – an award has to be for an accomplishment of the employee; an example of this includes employee of the year. Usually an award must be exclusive and there may even be a nomination process.


If the award is for a performance related reason it automatically becomes a taxable benefit to the employee. An example of this is giving someone a gift for meeting their sales quota.


The employee is allowed $500 of tax-free gifts and awards every year.


Cash or Cash Equivalent – If you give your employees cash, or something that can easily be converted to cash like a gift card, this is a taxable benefit and must be included in the employees income.


Note that everything taxable is also pensionable and therefore CPP applies. However, EI only applies when the gift was cash or a cash equivalent.


Long Service Awards


An employer is entitled to give their employee a long service award every 5 years of employment. Anything outside of this time-frame is automatically considered a taxable benefit.

Anything over $500 is also a taxable benefit to the employee. The good news is that this does not count towards the employees $500 gift and award allowance.

Social Committee & Events


Social Committee – If the employer pays for the social committee, all gifts and draws through the social committee are deemed eligible towards the $500 gift allowance of the employee. However, if the social committee is funded by employees, either with their own money or through fundraisers, everything given out through the social committee with be non-taxable.  

Events – If an employer throws a party or hosts a social event outside of work, the event must be under $150 a person or it becomes a taxable benefit to the employee.

However, if the employer pays for a meal that also corresponds to a work reason, for example networking or an educational lunch, it is not taxable to the employee.


Calculation the $500 Limit


First, we will note that if you give your employees a small gift of little value you do not need to keep track of it. This can include things like a coffee mug, or a company branded hat.

For everything else your payroll professional will need to keep a list of all the gifts and awards that have been given to the employee. Anything over the $500 will need to be added into the employees income.



Wedding Gift – $300 piece of art

Birthday Gift – $100 gift card

Christmas Gift – $250 watch

5 Year Service Award – $600 golf clubs


The $100 gift card automatically needs to go into be added into the employees income as it is a cash equivalent item.

The 5 year service award is a separate item, however it has a value over $500, there $100 would be taxable ($600-$500)

The wedding and christmas gifts are both added together towards the $500 gift limit, $50 would be taxable ($300 + $250 – $500).

Therefore in total, the employee has to take $250 in taxable income for the year.



You can read more about gift giving on the CRA website, here. Or give us a call!

Tax Time

Tax time comes every year, and is a dreaded time for many, business owners and employees alike. This post is directed at sole proprietor taxes, if you are an employee and have any questions please give us a call and we can discuss your tax needs with you.

Posting this in February may seem early, however the earlier you start thinking about getting your paperwork ready for tax season the easier tax season becomes. It is also the way to become your tax preparers favourite client!

The first step to take is to gather all your paperwork. With it being February you may not have all your investment paperwork yet, however, you should have almost everything you need.

If you are doing your data entry, that is fantastic. We have a free spreadsheet below that you can use that creates a profit & loss statement for your accountant. You can find this at the bottom of this post. Once all your entry is completed then all you need to do is bring in your completed profit & loss and any additional investment paperwork to your accountant. From here they will be able to file your taxes for you. This method will save you money, and if you understand bookkeeping this is the way to go.

If the thought of doing your own data entry fills you will dread, don't worry you can still save yourself some money with the tips below.

  • Sort your shoebox before bringing it in to your accountant. Any accountant will of course sort it out for you, but this can quickly add to your bill
  • When sorting, make sure to sort it into groups, for example: supplies, meals, or vehicle expenses. This will help the data entry go quicker for your tax preparer.
  • If you have any purchases over $500 keep these separate from your normal expenses as they may need to be treated differently as assets.
  • Fill out a home based expenses sheet before coming to your tax preparer. You can find a copy of ours at the end of this post.
  • Bring your kilometer log with you.

As you can see the key to saving money on taxes is organization and being prepared. Any time a tax preparer needs to stop and pick up your file due to missing information your bill will climb!

On-Core can help answer all your persona tax questions & provides tax returns for an affordable rate! Give us a call today.


Free Profit & Loss Workbook!


Payroll FAQ – Part 2


This is the second post of our payroll FAQs. A reminder that these are general rules, for more specifics please visit the Alberta website through the links in the post. It is important to note, these are the minimum standards that must be met in Alberta. You are free to give your employees more than what is outlined below.


Vacation Pay

Vacation pay is something all employers are required provide for their employees and employees must use their vacation time within 12 months from when they earned it.

Employees are not eligible for vacation pay until they have been employed for a year, however an employer can allow for vacation before the year is over.

Employees earn 2 weeks of vacation for 1-5 years of employment and 3 weeks of vacation for 5 years and over. This time must be given in one unbroken period, unless the employee has requested to have it split up.

Employers can deny vacation time for operational reasons and decide when their employee takes the time. However, an employee must be given 2 weeks notice of the assigned time off.

There are some exceptions for who receives vacation pay and how it is paid. For a full list, you can check out the Alberta government website, here. The most notable exception is Construction Workers. Their employers are not required to give them vacation time, but they do need to pay 6% vacation pay on each pay cheque.

How do you pay it?

Vacation pay can either be A) Paid out on every pay cheque B) Accrued for use when actual vacation is taken. If option B is selected, the employee must receive their vacation pay no later than the first pay period after the vacation has been taken.

For the first 5 years, vacation pay is calculated as 4% of the yearly wages, after 5 years it is 6%.

When calculating vacation pay, the following are not included:

  • Overtime
  • General Holiday pay
  • Termination pay
  • Tips
  • Expenses and allowances

If an employee is terminated or leaves before the first year, you must pay them 4% of their wages on their final cheque for their vacation pay.


General Holidays

What are they?

General Holidays, or as they are more commonly referred to statutory holidays, are paid days off work legislated by the provincial government.

In Alberta there are 9 mandatory statutory holidays and 3 optional ones. Each of these are listed in the chart below for your reference.

General Holiday Mandatory/Optional 2019 2020
New Years Day Mandatory January 1 January 1
Family Day Mandatory February 18 February 17
Good Friday Mandatory April 19 April 10
Easter Monday Optional April 22 April 13
Victoria Day Mandatory May 20 May 18
Canada Day Mandatory July 1 July 1
Heritage Day Optional August 5 August 3
Labour Day Mandatory September 2 September 7
Thanksgiving Day Mandatory October 14 October 12
Remembrance Day Mandatory November 11 November 11
Christmas Day Mandatory December 25 December 25
Boxing Day Optional December 26 December 26


How are they paid?

General holidays are to be paid to most employees immediately upon their employment. However, there are certain situations when you do not have to pay an employee for a general holiday, they are:

  1. An employee does not show up to work when they are scheduled to work on the general holiday
  2. An employee is absent without the employer’s consent on their regular working days surrounding the general holiday.

When paying an employee for a general holiday, there are 2 situations that can arise:

Did not work on general holiday

Pay the employee Average Daily Wage (5% of Wages + Vacation Pay + General Holiday Pay from the previous 4 weeks)

Worked on the general holiday

Employers can choose one of the below 2 options:

  • Pay Average Daily Wage plus 1.5x employees time worked on that day (including overtime)
  • Pay regular wages plus provide a future day off paid with their Average Daily Wage

If you chose the second option and the employee leaves the business before they take their day off, you must pay them their average daily wage on the final pay cheque.


You can check out the specifics of general holiday pay, here.

As always, if you have any questions about payroll, give us a call today!