Business experience report: Setting up payroll and benefits

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Another big milestone in my business adventures: I paid myself for the first time! Not bad, considering this is my second fiscal year. I’ve been nervous about this for a while because I wanted to make sure that the business had a emergency fund of its own, especially when it comes to taxes. I also wanted to get a little more confidence in accounting before opening up a payroll account and remitting the proper amounts. Well, now I’ve done it!

Most of the salary/dividend comparisons lean heavily towards dividends to increase the tax-free income available, although some include a little salary in order to take advantage of the exemptions for tax and for CPP. Since dividends use after-tax dollars, I don’t need a high income to support my lifestyle, and I have some unused RRSP deductions (that’s what happens when you keep maxing it out, and you end in a low-income year!), I crunched my own numbers and figured out that an all-salary payment would be the best for me right now, even with the mandatory CPP contributions.

To keep things simple, I chose an annual payroll period. I didn’t need the regularity of a bi-weekly or monthly paycheque, and it was easier for me to deal with one cheque and one set of remittances. It’s not a popular option, so I called the Canada Revenue Agency (CRA) a few times to check that I was doing things correctly. They told me to use the payroll calculator’s 10-payment option and multiply everything by 10. I wrote myself a business cheque for the amount that I wanted to draw out, deposited it… and then realized that I’d written down the nice round gross number instead of the net amount that the provided calculator had provided, so I went back to the payroll calculator and jiggled the numbers around until it gave me the correct remittances for the net amount I received. I filed my remittance through the CRA’s online My Payment system, and in January next year, I’ll file a T-4 tax form.

Because we’re expecting significant medical expenses that W-‘s extended benefits won’t cover, I also set up a private health service plan (PHSP) with Brock Health. Brock has a $100 set up fee and a 5% admin charge for qualifying medical expenses, but it may let me convert the medical expenses into before-tax business expenses. It doubles my up-front cost, but I have both the business and the personal buffers to absorb that.

It turns out that you can set the effective date for a PHSP to anything that matches a 12-month period ending in the current fiscal year. Since my fiscal year started on October 1, 2012, that meant that I can probably claim expenses going back to incorporation (or maybe even earlier, but let’s not be greedy here).

I felt the twinge of buyer’s remorse after signing up for Brock, as further research turned up Promedent, another PHSP provider that charges a $150 setup fee with a flat fee of $50 per claim. Going with Promedent could save me a few hundred dollars – probably even worth the cost of cancelling and signing up there instead. However, there’s a lot more on the Internet about Brock Health than about Promedent, so if I’m going to experiment with this, I trust Brock a bit more. Brock also promises claims processing in 10 days (within 5 days of receipt) while Promedent processes claims in ~30 days, and the turnaround time might come in handy for feedback and getting things right.

Large medical expenses usually trigger audits, so we’re going to carefully file all the receipts, dot all the is, cross all the ts, and Scan All the Everything! I’m a little worried about what the CRA considers a reasonable health benefit for a corporation, but I may as well claim whatever I can and then work things out.

Let’s see how this goes!

13,705 steps and counting

Walking

13,705 steps in two and a half hours of leisurely walks spread out over one day, encompassing three not-entirely-necessary strolls involving two libraries, a drugstore, and one supermarket. But it was worth it: several bags of books, a package of dental floss, a pantry restocked with instant noodles, and the satisfaction of seeing what it’s like to walk the recommended 12,000 steps.

I headed out for the second half of my walk right after we wrapped up a project. The euphoria was making me buzz too much to write, so I decided to take good long walk.

The streets here are wide and well-lit, and our neighbourhood is wonderfully walkable. The largest park in Toronto is a few blocks from our house, although I more often walk to the library and to Bloor West Village. Near work, underground passages let me wander about while hiding from winter.

I enjoy walking. Even when winter’s giving me the sniffles, it’s still fun. Sometimes I think of Elizabeth Bennet walking from Longbourn to Netherfield (three miles, or a mile less than what I walked today), except in better shoes and more comfortable clothes (but not anywhere near as awesome a hat).

Tracking has certainly influenced my behaviour. I’ve taken to using Walttend Lite to track my steps because it can correctly track on my Google Nexus One even when the screen is off. None of the other pedometer apps I tried could do that, so Walttend it is. Once I was out there, it was easy to talk myself into going just a little bit further so that I could check off my 12,000 goal. After all, when you’ve gotten to the vicinity of 10k with another trip to the library (and another armful of books), you might as well keep going.

Do you use a pedometer to track your walks? What are you learning?

Photo (c) 2009 Tambako the Jaguar – Creative Commons Attribution No Derivatives

Lifehacking: Switching to a rolling laptop bag

I’ve been paying attention to the preventive advice I picked up during my last session with a registered massage therapist, and I thought I’d post an update on how things are going with this life-hacking.

  • I switched to flat shoes. When the massage therapist mentioned that high-heeled shoes could be the reason why some of my muscles were tense, I said I’d switch to flat shoes. This was apparently not the way most women react. They’re more likely to say, “Sure, when they make flat shoes that aren’t ugly.” Well, I found two pairs of shoes that look presentable enough for the office. =)

    It turns out that you really do need to walk a mile in your own shoes before they’re broken-in enough to be comfortable. Both of my new pairs of flat shoes are now comfy enough for extended walks. The fancy insoles I picked up to add arch support threw me off balance and induced enough pain to make me hobble, so I got rid of the insoles. Now I just use plain liners to keep the shoes relatively clean.

  • I switched to crossing my legs at the ankles, not at the knees. Sometime after grade school, I picked up the habit of crossing my legs at the knees. I suppose it was because practically everyone else I saw did it. Probably not good for my back muscles and circulation in the long run. Stopping this behavior took a little conscious thought for a couple of days, and then it felt natural not to do it any more. Now I just cross at the ankles if I want to, all proper-like.
  • I switched to a rolling laptop case instead of a backpack. Yes, it’s a bit of a challenge getting a bulky rolling laptop case through the wickets or up and down stairs, but my shoulders think it’s a good trade-off.

There’s only one thing I’m having a hard time doing: leaning back. The massage therapist said that some of my back and neck muscles are tenser than they need to be because I lean forward instead of using the chair back. I’m not used to the idea of leaning back against the chair. It feels casual, and it sometimes means that I’m not in quite the right position to type.

Hmm…

Circus school

The static trapeze lessons I’ve been taking are tons of fun and great motivation to exercise more. (11 straight days of exercise!)

Here are a couple of other classes that might be useful:

Conditioning:

  • Centre of Gravity, Tuesdays & Thursdays, 6:30 pm – 7:30 pm, $10 drop-in – 416-469-1440
  • Toronto School of Circus Arts, sessional, http://www.torontocircus.com/

Flexibility:

  • Centre of Gravity, Tuesdays, 7:30 – 8:30, $10 drop-in – 416-469-1440
  • Toronto School of Circus Arts, sessional, http://www.torontocircus.com/

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Random Emacs symbol: mule-version-date – Variable: Distribution date of this version of MULE (multilingual environment).