The federal government has given small businesses the gift of time and money.
On Monday, national Finance Minister Jim Flaherty announced Employment Insurance costs for employers and employees will remain unchanged, starting in 2014.
The move reduces overall payments next year by $660 million — without affecting the Conservatives’ plan to balance the nation’s budget by 2015.
“While Canada has seen steady job creation since the end of the global recession with over one million net new jobs, significant challenges remain in the global economy,” Flaherty told the media. “(This) will leave more money in the pockets of job creators and Canadian workers in 2014 alone, which will help provide the certainty and flexibility employers, especially small businesses, need to keep growing.”
Is it good news?
The premium rate — now frozen through 2016 — is $1.88 per $100 of insurable earnings, despite Ottawa’s plan to hike the rate to $1.98 in 2016, a move announced in this year’s budget.
What does it mean to small businesses?
In Canada, small businesses account for 98 per cent of companies, employ 70 per cent of the private sector labour force and contribute about 40 per cent to the gross domestic product, proving to be important economic drivers and sources of job creation.
According to the federal government’s backgrounder, employers and employees should expect to save money:
- A worker earning $48,600 — the maximum insurable earnings threshold for 2014 — should expect to save $24.
- A small business employing 10 workers should save up to $340.
But, as CBC notes, higher-income employees will still pay higher payroll taxes next year. The insurable earnings maximum rises to $48,600 from $47,400.
Canadians earning the top insurable amount will pay $22.56 more than this year, as opposed to the $46.56 they would have paid without the rate freeze.
Any other news?
Yep. Late last week, National Revenue Minister Kerry-Lynne Findlay unveiled an online mail service for small businesses, helping them “streamline interactions” with the Canada Revenue Agency (CRA).
The new mail service uses the CRA’s secure online service, My Business Account. By signing up, Canadian businesses can receive their notices of assessment and reassessment, along with some letters online for the accounts they select, such as the corporation income tax and goods and services tax/harmonized sales tax accounts.
“This initiative will allow businesses to eliminate unnecessary paperwork and introduces time-saving measures for managing CRA correspondence. This is one more step toward faster, more efficient, and less costly paperless transactions with the CRA.”
Here to help
A1 Accounting, a Calgary accounting and bookkeeping firm, is here to assist you with your taxes and planning. We specialize in personal taxes and small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.
Fill out our contact form or give us a call at 403-226-8297.