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Impact of COVID-19 on Small Business and Self-Employed

My daughter offered to write an article about the COVID-19 and its impact on her life. She is a self-employed Chiropractor, so she is directly affected by this Pandemic. Small businesses and entrepreneurs will be impacted by this harshly. She is also at risk due to asthma and lung issues. I offer this for your consideration.

COVID-19 From the Self-Employed and Small Business Perspective

Work from home if you can! No sick notes needed! Waived week long waiting period for E.I. applications! Relief funding for those unable to work due to closures! The Canadian Government is stepping in to pledge 1 billion dollars to help with the repercussions of the current COVID-19 crisis. I am self-employed as a chiropractor and my business will be affected by COVID-19, even if I don’t contract the virus. Somewhere down the line, there may be some relief funding specifically for small businesses and the self-employed, but I am not holding my breath that it will be any time soon. 

Currently in Ottawa, we have 10 confirmed cases. Schools, libraries, museums, and city recreation complexes, are all closed as of March 16th and will stay closed until at least the beginning of April. Private health clinics have not been given any guidance (as of March 15th) on whether to stay open or close. Hourly, we are checking multiple sources and updating our policies based on our best judgement of what is safe for our clinic but also protects our livelihood. 

Social distancing is effective, no argument on that one. I fully support trying to “flatten the curve”, and as an individual who would most likely end up very sick if she contracted this virus, I am happy to limit my social outings. However, being within a metre of other people is a part of my job. Touching people is my job. I sit in a difficult situation trying to balance having an income, and protecting mine and my patients’ (sub customer/ client/ consumer for other small businesses) health.

As a health care practitioner, I have always washed my hands between patients, my equipment and room has always been cleaned according to health regulations. Lately, I’ve upped my game, as much as possible, to keep my patients safe and my businesses going. I can’t get hand sanitizer, disinfecting wipes are at a premium and I am continually being asked if it’s safe to come to our clinic. Even if we do stay open, there is no guarantee patients will feel safe and comfortable coming to the office to be treated. 

Financially, I feel lucky to have parents who have tolerated me living in their house since I graduated 18 months ago. I don’t have a mortgage or children. I also don’t have a spouse with benefits or a salaried income. I do have a load of student debt and am grateful for the Bank of Canada’s recent interest rate cuts. As an independent contractor I get paid based on the number of patients I treat. Full stop. Not salaried, no benefits, no E.I.. Working from home is not an option. Small businesses will feel the hurt from this situation for the next 6 months to 1 year. We are stressed. Yes, an emergency fund is vital. Most financial folks say 3-6 months worth of expenses is what you should have put away. There are people much more qualified than I am to comment on that factor.

Now that I have sufficiently indulged in standing on my soapbox and yelling my problems at the internet, here are some tips to continue to support small businesses if you are healthy, not self-isolating and able:

  1. That local coffee shop you frequent on the weekend or before work, continue to go if you are healthy and not at risk. Get some of their beans/ tea leaves/ product to use in your own home. Buy a gift card to boost their income and help them float until things return to normal.
  2. See if take-out or delivery is an option for your favourite local restaurant. 
  3. Keep your appointments with your health care professional/ hair-dresser/ personal trainer/ etc etc. If you are not able to keep your appointment, reschedule for a few weeks time rather than flat out cancelling. 
  4. If your gym/ yoga studio/ health clinic of choice has closed as a result of COVID-19, make a mental promise to yourself to go back, put a reminder in your calendar a month from now to get yourself back into your routine. 
  5. Stress has you online shopping? Need to buy gifts for a birthday? Choose a Canadian small business that has an online store.
  6. Ask if there is an opportunity online or phone interaction with professionals that have that capability like your accountant or nutritionist. 
  7. Monitor information channels that are giving accurate information on the current state of affairs rather than relying on social media or other social channels that tend to spark fear and panic.
  8. Educate yourself on the actual symptoms of COVID-19, and how the spread can be prevented. I am not writing this from a health care practitioner point of view, so I won’t give any advice.
  9. Save your advice on financial planning in case of an emergency for 6 months from now. The last thing a person in my position wants to hear is advice, however well meaning, on how they could have prevented getting into this awful position. Once we are recovering, that is the time to offer help on that subject. 
  10. Be Kind. We are all trying to make our way through this situation the best we can. Being angry, greedy or selfish will get you no further in life than being kind, patient and fair.

So before you start investing in toilet paper stocks, complaining you have to deal with your kids for 3 weeks, hoarding hand sanitizer or making jokes about the person sneezing in a coffee shop, think of the people in your life who are self-employed. Reach out, ask them how you can help support them, stop the spread of misinformation, and wash your damn hands

CORVID-19 self-employed
Simple Hand Washing Instructions

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CPP and EI for 2020

One of my most popular posts in 2019 was CPP and EI rates for 2019, so I figure I’ll keep going with a winning combination.

As we start 2020 (a new year and a new decade), all we folks who receive pay cheques (I believe the Japanese term is Salaryman), we get to start paying CPP and EI premiums again, hooray! Taxes make us strong!?! I resolved to pay less taxes legally this year.

If you pay CPP and EI premiums all year long, this is not for you, however, for those lucky enough to earn more than that, read on.

EI this year is again a bit lower:

  • The maximum insurable earnings for 2020 is $54,200, up from $53,100 in 2019.
  • The rates have lowered a little as well:
    • Workers rate (self-employed folks should research further, or if you live in Quebec) $1.58 per $100 earned.
    • Maximum premium paid $856.36 , once you reach this point no more EI will be deducted from your pay
    • Max difference from 2019 -$3.86

CPP rates continue to rise. Given the number of retirees, not surprising really.

  • Maximum Pensionable Earnings: $58,700
  • Employee Contribution Rate : 5.25 % (rate is up 0.15 % over 2019)
  • Maximum contribution for year: $2,898.00

Guess How Much Bill Makes

Somewhere around July, Bill (a friend) says he has paid off his CPP & EI, can we construe from this how much Bill makes (given he lives in Ontario and is not self-employed)?

MonthBi-Weekly PaysApprox Gross IncomePer Pay EIPer Pay CPP
January3$469,733.33$285.45$948.50
February5$281,840.00$171.27$569.10
March7$201,314.29$122.34$406.50
April9$156,577.78$95.15$316.17
May 11$128,109.09$77.85$258.68
June13$108,400.00$65.87$218.88
July 16$88,075.00$53.52$177.84
August18$78,288.89$47.58$158.08
September20$70,460.00$42.82$142.28
October22$64,054.55$38.93$129.34
November 24$58,716.67$35.68$118.56
December26$54,200.00$32.94$109.44

So from this helpful table, we can guess Bill makes less than $88,100.00. Isn’t this a fun game to play? Also if Bill told you what the approximate EI deduction is on his pay cheque, you can also guess his gross income, using this cool table.

Past CPP & EI

Yes, it is a topic I write about, as it is important to me. Here are a few from the past years, to compare and contrast (hint see how much CPP has gone up).

Reference:

These are the sites I gleaned the information from

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CPP and EI for 2019

Happy New Year! I have been rummaging through my archives and a tradition seems to be talking about CPP & EI for each year. Who am I to argue with traditions?

Of course you realize this is for 2019, the numbers have changed for 2020 and you can read about them here!

As we start a new year, all we folks who receive pay cheques (I believe the Japanese term is Salaryman), we get to start paying CPP and EI premiums again.

For a lot of folks, they are just deductions that appear on every pay stub. For folks who make more, this deduction disappears some time in the year, and after that, they get a “virtual raise” given they do not have to pay these deductions for the rest of the year.

It is easy to approximate how much someone makes, by knowing when they stop paying EI premiums.

It’s actually a pretty simple game to play and well worth a couple of minutes time to create a little model to figure this thing out.

Meet Jill for 2019

Jill gets paid bi-weekly, lives in Ontario and works as an employee of private firm NUJAC. She gets paid a regular salary (assuming no bonuses ), so if we list the month in which Jill tells us “I stopped paying EI premiums in August” we can then approximate how much Jill actually makes in salary.

We learn from the EI web site that the 2019 premium is 1.62% of insurable earnings (and the maximum insurable earnings is $53,100 in 2019).

EI Rate1.62%Max income $  53,100.00
Max860.22
CPP Rate5.10%Max income $  53,900.00
Max$2,748.90
MonthBi-Weekly
Pays
Approx Gross
Income
Per Pay EIPer Pay CPP
January3$460,200.00$286.74$902.70
February5$276,120.00$172.04$541.62
March7$197,228.57$122.89$386.87
April9$153,400.00$95.58$300.90
May 11$125,509.09$78.20$246.19
June13$106,200.00$66.17$208.32
July 16$86,287.50$53.76$169.26
August18$76,700.00$47.79$150.45
September20$69,030.00$43.01$135.41
October22$62,754.55$39.10$123.10
November 24$57,525.00$35.84$112.84
December26$53,100.00$33.09$104.16

So Jill makes about $76,000 a year.

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Gosh Darn it! CPP & EI Again!!!

One of the joys of the new year is the restart of having to pay CPP and EI premiums. It always makes that first pay cheque a bit smaller, and thus that much more annoying. You have just got used to not having to pay them (if you make enough money), and now you are back paying them again, how annoying!

They're back!!! CPP
They’re back!!!

The maximum CPP for 2014 is $2425.50 , that is the easy one.

For EI Premiums there are two possibilities:

  • If you live in Quebec your Max EI premium is $767.88
  • If you don’t live in Quebec your Max EI premium is $937.98

Some folks will pay CPP & EI premiums the whole year, but those who make a bit more, you will eventually hit the max and will stop paying premiums later in the year.

Remember you can have some Fun With Numbers and figure out when you may stop paying these premiums by doing this simple calculation (you’ll need your first pay cheque showing how much you pay each pay cheque):

# Pays  =  Maximum Premium / Premium per Pay

I do that every year and then mark my calendar to remind myself when I stop paying. On that pay you could take that “extra” money and then pay off debts with it, couldn’t you?

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Job Hunting Tips

For those who have not been following me on the tweety you have been missing out on some helpful (if not sarcastic) job hunting tips that I learned throughout my job hunt a few years back.

I have been on both sides of the interview table, so I have interjected a lot of my own pet peeves to this list for candidates that I have met and wondered what they were thinking when they showed up to my job interview.

They are worth a read, and many of them are applicable to all jobs (and some are me being a smart ass). Some of the best Job Hunting Tips:

  • Tip 314: Always wear clean underwear to a job interview but never show them to your interviewer either
  • 319: Never answer any question in a job interview with “This bitch one time…”, unless you are a dog breeder
  • 271: Be Precise, e.g. “When I invented the Internet, I was working at…”, no one likes vagueness in job interviews
  • 666: Be complimentary with your interviewer: “That outfit doesn’t make you look nearly as fat as you are…”
  • 69: Hygiene is important, always shower before your interview, and cover all open sores and cuts
  • 13: If anyone asks you about your religious views, claim to be a Druid or a Sumarian Snakecharmer
  • 44: Humor has a place but don’t do the Uncle Buck mole bit if interviewer has one (don’t be a twiddler)
  • 313: One answer that always gets interviewer’s attention “Why the f*ck would you ask me that?”
  • 535: Scents make you memorable at an interview, but don’t eat bean burritos 2 hours beforehand, you are too memorable then
  • 345: Arguing with your interview about technical issues is OK, but MUST you be right
  • 478: The more the interviewer talks, the better you are doing, except if they are yelling about your lack of skills
  • 41: Tell someone you are using as a reference before you use them, “… who? That Idiot? I would never hire them!”, could be your reference.
  • 87: The only person you can “throw under the bus” in an interview is yourself, don’t blame others, explain why
  • 101: It’s good to seem to know a lot, but very bad to appear to be a Know-it-all keep that in mind
  • 311: Network more with people who have jobs, not as much with folks who are also looking for jobs
  • 444: Over 80% of jobs are found through “connections” and “contacts”, so get out and interact with folks!
  • 665: When interviewer asks “Any questions”, do not ask, “What are your sick leave rules like?”
  • 3: Think you are indispensable? You may be, until you are dispensed, start looking for jobs before you are dispensed.
  • 129: At the interview be sincere (once you can fake it, you are in)!
  • 37: Be agreeable but not a suck-up (unless that is what they want, then be one), be yourself once u have the job
  • 333: Don’t answer question “Where do you see yourself in 5 years?” with “Doing your job, or better your boss”

Foolproof Job Hunting Tips

Hope these help, stay tuned I do have some more coming.

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