The “war” on the Self-Employed

The term ‘war’ may be a bit misleading here, but who would have thought that being self-employed would require wearing body armor to defend yourself from CRA inquiries!

In an effort to ensure Canadians are paying taxes, there’s been increased scrutiny over business expenses and the status of a contractor/self-employed person vs. an employee.

As the June 15th tax filing deadline has come and gone, I have seen people make an effort to UNDERSTATE their expenses to avoid CRA asking questions in fear of spending time and money on an audit. Wow, that’s a thing? Well, apparently, it is.

The other combative topic noted is the status of a self-employed person vs. an employee. There are advantages to both, but CRA generally likes to see people being paid by an organization that withholds tax. This increases Government cash flow, helps contributions to CPP, EI, EHT and other social programs, so of course there’s a bit of a bias here.

So what advice to we have to win the battle and the war? Keep good back up for your expenses and be cautious when utilizing long-term freelance workers.

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My Family is worth more than your Family

The cost of Family Benefits is somewhat confusing to many businesses as it relates to the cost of a Single Person’s benefits.

For simplicity, the cost of a single person’s plan is about 3 times less that a family plan. So, if you assume the business pays 100% of the plan, this means the budget requires 3 times more money for an employee hired who has a family than one that doesn’t (and remember, no employee discrimination allowed!).

So, hold on, wait a minute…

  • When you buy a computer for an employee, do you need to buy them two monitors if they have a husband and children, while you would only purchase one monitor for a single employee?

  • When there’s an RRSP match, you certainly don’t get a top up for having a family.

  • The CRA doesn’t require a higher tax withholding at source if you have kids.

I guess that means we need to get a ‘Single’ or ‘Family’ box on a resume to financially plan for our fiscal years’ benefit budget expenses.

For more perspective or just to grab a coffee, contact

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The Evolution of EHT

I won’t call Employer Health Tax a scam, but what a scam!!

To keep it simple, companies need to pay a 1.95% tax that to help contribute to OHIP (and we’re not 100% sure that money all actually goes to the OHIP line on the provincial budget).

This concept was introduced in 1990 and has an exemption level of $450,000. Really? $450,000? I know that sounds like a lot of money, but there are payrolls in Ontario with 2 employees that exceed $450,000.

This means for every $1M of payroll, there’s a $20,000 charge to Ontario business to help fund OHIP.

·       There’s no maximum per employee

·       There’s no exemption if the employer sponsors a health and dental plan for employees

·       There’s been no regard for the Individual Health Levy (introduced in 2003) that all hard-working Ontarian’s pay on the annual income tax return

·       There was no discussion about repealing EHT rather than providing universal drug coverage for Ontarians under 25 years old

So, in 2017 when Ontario tax rates were reduced by 1% for business, they probably should have fought harder to repeal EHT and keep tax rates the same…because at the end of the day, it’s all a cost.

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You have the an accountant?

To all the entrepreneurs, self-employed and anyone who’s ever felt the wrath of CRA’s favourite source of revenue – INTEREST & PENALTIES, I’m feeling you today.

Have you ever been charged interest because you didn’t make a payment on time?

Have you ever been charged a penalty because a form you’ve never heard of wasn’t filed?

Although the Singer Steinberg team spends the majority of our days helping and strategizing with group insurance planning, we’ve had the joy of fielding questions and helping many extremely hard working self-employed clients with the taxes and filings.

One commonality is that to start a business, you must register for a business number or for an HST number (if staying unincorporated). When you take this step, you’re registered very quickly and then POOF, the rest is up to you. So why doesn’t CRA recommend talking to an accountant or set up a resource center (that you don’t get a busy signal calling) to support the thousands of tax paying business owners?

When you get arrested, you have the right to remain silent and to an attorney, so maybe when you start a business, you should be given the right to an accountant? Same, same but different.

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Dissecting the “BS” in WSIB

Previously, we discussed the fine print of mortgage departure fees. This is an easy topic that we can all digest, as we either have a mortgage, have heard of a mortgage, or know a guy with a mortgage.

So today, let’s focus on a body that we all have heard of, but rarely get to understand the fine print of working with the organization…and that’s WSIB or the Workers Safety & Insurance Board.

For some companies, WSIB is not mandatory and you can choose to join their program to help with things like Short and Long-Term disability programs rather than using a private insurance company like Sun Life. Okay, seems logical.

But what happens when you want to leave? Well, in full disclosure I’m not an expert in WSIB departures, but in the last year I’ve seen enough to be a self-proclaimed expert in why NOT to opt-in to WSIB.

The departure tax to leave the organization can be up to 1-years premium and WSIB can surcharge more for their inability to manage risk over the years. A self-fulfilling management practice that I’m considering incorporating…so be careful if you ever stop working with Singer Steinberg, we may invoice you to break up with us.

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Two Minutes in the Penalty Box for “Checking”

Between fine print and finer print there’s always a catch, so why should your mortgage be any different than your phone bill?

Typically, when you sign off on your mortgage paperwork, the last thing on your mind is ‘how much will this cost me if I break it’ so why would you ever check into that? So, let’s “check” into it now;

If you have a 5-year fixed mortgage with a Big-5 bank that’s in the $500,000 range, you may be surprised to find out that it will run you about $15,000 to break your mortgage. $15,000!!

Since the bank prices in an expectation of you paying interest over a 5-year term, a penalty is calculated if you depart, and you have to pay it, few exceptions.

So where do we go from here? Well, next time you’re getting into a mortgage transaction look for a lower break fee option by considering a couple simple strategies such as; going variable-rate (which on break would require 3-months interest) or use a Specialty Lender (non-big bank) who often use lower break-fees as a competitive way to sell mortgages).

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WILL lower fees make you feel better about lower returns?

The jury may be out on the concept of active vs. passive management, but we can all agree on something…the higher your net return, the more money you make. Pretty sure that thought holds true.

With a plethora of ETFs and low-fee investment vehicles becoming extremely popular in the market, it seems like in today’s investing era we talk more about transparency over fees than actively hitting return goals.

I’m not implying that fees aren’t important, but I’d gladly pay a 2.5% fee for a return of 10% than pay 0.5% for a return of 5%. The danger in evaluating your investments returns on the fee someone or some institution earns is just too simple, so much like evaluating a company based on their sales and net income, make sure when evaluating your investments, returns stay top of mind.

Think about using Turbo Tax vs. A Tax Accountant…sure, paying $20 is better than $1,000, but if the fee justifies real tax savings through a lower payable or higher refund, it’s well worth the investment. I personally use Turbo Tax, but maybe should have just hired an accountant instead of paying tuition to get my Accounting Degree…

For more perspective or speaking engagement opportunities, contact


I'll trade you my VIAGRA for your 6-PACK

I’d say don’t judge a blog post by its title, but in this case, feel free to. We’re very fortunate to work with many companies that have demographically speaking ‘young’ labour forces and with that comes a new outlook on what Employee Benefits mean to them.

One of the more noticeable changes from more established plans or plan designs from 20-years ago is the introduction of ‘flex’ spending or ‘life-style’ benefits to plans. This change generally results in employee willingness to exchange something like, a prescription drug plan for $500 of massage therapy benefits or a gym membership for the year.

Some companies, when utilizing budget dollars for ‘employee programs’, bucket traditional Health and Dental benefits and RRSP plans in the same budget category as Holiday Parties and the Beer Fridge/Drink Cart budget. The latter benefits are empowering for companies as all employees can consume them, whereas protection for 1-2 employees with a severe illness do not necessarily benefit the entire group.

Regardless of the choices that are made, there’s enough strategy a business can employ to have their beer fridge and provide prescription drugs to all employees

For more perspective or benefits plan design reviews, contact

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