Minister acknowledges 'challenges' to families as daycares raise costs due to minimum
- Thread starter White_Unifier
- Start date
Tax credits arent subsidies Flossy. If that's the case every business in Canada and every wage earning person is subsidized
Only half wits don't incorporate their businesses small or massive.
Are you illiterate?
Only half wits don't incorporate their businesses small or massive.
Are you illiterate?
Pretty much. If your small business fails, creditors can go after your personal assets, if incorporated, only the corporation's assets can be seized and liquidated.
I suppose it would depend on the situation. I can see it if it's a big day care managed by someone who is paid a decent wage to take responsibility where there's a few helpers and their job is to wipe noses and break up fights.
https://www.jobbank.gc.ca/report-eng.do?area=9219&noc=4214
See for yourself.
Child Care Worker salary in Ontario. The average Child Care Worker salary in Ontario is $31,272 per year or $16 per hour. This is the same as the Median wage of the country. Entry level positions start at $22,000 while most experienced workers make up to $44,000.
https://neuvoo.ca/salary/child-care-worker/ontario/
You going to bring a machine in for a job where there's only a yard of gravel to move? We've all been subjected to these f**king machines that handle phone calls.............push one for...............push two for..............push three for..................push 9 for........... F88K!
If you can't do, teach.
The problem is the lack of quality in the hiring process these days. Which is last year's teaching mistakes in action today.
Carry on doood.
But if you are a Director of said small company you may be held liable for some of those debts anyway. For example, if you owe CRA a corporate debt, they may apply a lien against your home (if you own one) or they can garnishee your bank account. I don't think other creditors can do that but CRA sure can!
Nooooo.
Should you incorporate your small business?
When a business is started, it can be structured as a proprietorship, partnership, or corporation.
Proprietorship
A sole proprietorship is one person operating a business, without forming a corporation. The income of the business is then taxed in the hands of the owner (the proprietor), at personal income tax rates. The income is considered income from self-employment, and is included on the personal income tax return of the owner.
Advantages of proprietorship:
Setting up a business in the form of a proprietorship is relatively simple and the costs are low.
If the business loses money, the losses can be written off against other income of the proprietor.
Proprietorships are less regulated than corporations. The administration of a proprietorship is less costly than that of a corporation. However, proprietorships are regulated by the provincial/territorial governments, and the proprietorship may have to be registered.
The proprietor is in control of all decision making, and receives all profits of the business.
Disadvantages of a proprietorship:
The biggest disadvantage of a proprietorship is unlimited liability. The proprietor is liable for all debts and other liabilities of the business. If the business is sued, all the business and personal assets of the owner are at risk.
If the business is profitable, it will usually be paying higher taxes than if it was incorporated as a Canadian Controlled Private Corporation (CCPC). The lowest personal income tax rate paid by a proprietorship would range from 19% to 26% (in 2015), depending on the province/territory. This rate increases with income. Taxable income over $138,586 (federally, in 2015) is taxed at the highest marginal rates, which range from 39% to 54.8%, depending on the province/territory. See the Marginal Tax Rates page.
A proprietorship has a lack of permanence - if the owner dies, the net business assets pass to the heirs, but valuable leases and contracts may not.
Corporation
A corporation is a separate legal entity, which is formed by application to either the federal government, or one of the provincial/territorial governments. The corporation issues shares to the owners, or shareholders. The funding of the corporation can be done through the issue of shares, or by borrowing.
Instead of investing a large amount in shares, shareholders can lend money to the corporation, and invest only a minimal amount in the shares. This way, when the corporation has available cash, the shareholder loans can be repaid without attracting personal income tax.
Being a separate legal entity, a corporation pays corporate income tax, which is calculated completely separately from the owners' personal income tax. If the corporation pays wages to the shareholders, income tax and Canada Pension Plan contributions, and sometimes Employment Insurance premiums, must be deducted and remitted to Canada Revenue Agency.
Advantages of incorporation:
One of the biggest advantages of incorporating a business is limited liability.
This means that the liability of the shareholders is usually limited to the amount that they have invested in their shares in the corporation. However, many incorporated small businesses are not able to get bank loans without the personal guarantee of the shareholders, so this eliminates part of the advantage of limited liability. The personal assets of the shareholders are protected from lawsuits against the corporation. However, shareholders who are directors of the corporation can be held legally liable for some debts of the corporation (such as GST/HST and payroll taxes) in certain circumstances.
Another major advantage for a profitable small business is the income tax advantage.
A Canadian controlled private corporation, or CCPC, pays a much lower rate of federal tax (small business rate) on the first $500,000 (in 2017) of active business income than would be paid by an unincorporated business, due to the small business deduction. Active business income generally does not include investment income or rental income, which is taxed at regular corporate tax rates. The combined federal + provincial small business tax rate varies from approximately 10.5% to 18.5% in 2017 for the first $500,000, depending on the province, and from 26% to 31% for income over the threshold. The threshold amount subject to the lower small business rate also varies between provinces. Keep in mind that this tax advantage is mainly a deferral of taxes until the profits are paid out to the shareholder.
If all the profits are paid out to the shareholder as they are earned, leaving the corporation with little or no taxable income, then they will be taxed entirely as income of the shareholder, at personal income tax rates.
Another tax advantage of incorporation is the $800,000+ capital gains deduction on the sale of shares of a qualifying small business corporation. One of the qualifications is that the corporation must be a CCPC with active business income.
Private Health Service Plans can be used to provide tax-free benefits to employees. This deduction is also available to sole proprietors and partners, but the treatment for corporations is more favorable than that for unincorporated businesses.
Disadvantages of incorporation:
Incorporation is the business structure with the highest setup and administrative costs.
Incorporation is the most complicated business structure. It is very important to take extreme care in setting up classes of shares, deciding who will be shareholders (spouses, children) and how much control they will have (control is determined by % of voting shares owned). Professional advice can avoid serious problems.
Business losses cannot be written off against other income of the owners (shareholders).
More administrative work is required for a corporation. This includes annual reports filed with the corporate registry, and corporate tax returns which are filed separately from the owners' personal tax returns.
Generally, the higher the net income of your small business, the more advantageous it is to incorporate instead of remaining as a proprietorship.
No matter what the type of business structure, spouses and children can be employed by the business, thus effectively splitting income. However, amounts expensed must be reasonable amounts based on services provided, and must actually be paid to the spouse and/or children.
Each type of business entity has its advantages and disadvantages. It is wise to seek professional advice to assist in your decision-making, and in the setting up of your business structure. It is also very important to get your accounting records set up and organized properly at the start of your business.
The Canada Business Service Centres provide information related to starting a business. There are links to their web sites on our Links page.
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Even if they froze daycare costs for a few years it’d be a challenge. I sometimes wonder why some of my coworkers (who make a fair bit less than me) bother working. After taxes and daycare costs they’d barely break even unless they have another large source of income. Glad I don’t have kids right now.
Indeed. Quite low. Unless you are truly passionate about child care I don’t know why people would go into it. There sure isn’t much of a financial incentive. I wouldn’t do it even for the 44k.
Indeed. Quite low. Unless you are truly passionate about child care I don’t know why people would go into it. There sure isn’t much of a financial incentive. I wouldn’t do it even for the 44k.
you have to work for what you can get and try to work your way up.
Not everyone can start at the top.
It's nice to see Pete is cutting and pasting now. Should help reduce a significant number of his errors providing he's cutting and pasting from reputable sites. Hard to tell without a link or reading his entire posts.... Pete being Pete, I can't be bothered
And most small (i.e. 1 man Corporations) which make up of the majority, do so in order to get said loans/credit. That's my point. CRA though is another thing though. They're "god".