As a Professional House Cleaner in our network you’ll work as an Independent Contractor, which is also known as an IC.
An IC is not an employee of Motivated House Cleaners., but is a person who performs services for us under a contract with the terms spelled out such as duties, pay, the amount and type of work and other matters. Independent contractors are not subject to the same labour laws in some areas such as minimum wage, overtime, vacation, notice and termination, for example.
We refer to you as a Nano-Business Owner! A Nano-Business is a business that operates on a very small scale, with no employees. You won't have a separate legal status from your nano-business. You and your nano-business are, in essence, one and the same.
From a legal and tax standpoint, you'll be a special kind of nano-business called a Sole Proprietorship, which is an unincorporated Canadian business that is owned by one individual, you, and is the simplest kind of business structure.
What we pay you for cleaning is considered business income and not employment income. With business income, unlike employment income, you get a tax deduction for any reasonable business expense you pay in order to earn your business income.
Some examples of reasonable business expenses would be the cost of your cleaning equipment, cleaning products, your phone bill, your gas and your commercial general liability insurance. You can even write off as a tax deduction a portion of your monthly bank charges, rent/mortgage payment, car lease or loan payment, car repairs & maintenance costs, gas and your car insurance payment.
The difference between what we pay you for cleaning and your business expenses is called your net business income.
Cleaning Income - Business Expenses = Net Business Income
The vast majority of your business expenses are costs that you are currently paying now anyway, such as our cell phone bill, car lease/loan payment and car insurance payment. The great thing about the income you earn as a nano-business owner in our network of Professional House Cleaners is that, unlike regular employment income, you only have to pay income tax on your net business income, not the gross amount we pay you!
This means you pay less income tax which, essentially, is the same as earning more money and gives you more buying power.
So not only do you earn more in the Motivated House Cleaners network of Professional House Cleaners, but each dollar you earn has more buying power because you pay less income tax on each dollar than you would if it was employment income.
As a nano-business it is up to you, not us, to remit Income Taxes to the Canada Revenue Agency (CRA), but don’t let this intimidate you. It’s not all that complicated and we’ll be there to help along the way.
We'll issue you a T4A that lists all the business income we paid you during the year
Come tax season you must still complete a T1 Personal Tax Return; however, you’ll also have to complete a special form called a T2125 Form, which is where you list your business income along with any business expenses you incurred earning that business income.
The net business income from your T2125 Form then gets added to any other regular employment income you may have earned working somewhere else. From there you just prepare your tax return the same way you normally would. You’ll still get to claim the Federal & Provincial Basic Personal Amounts, the same as normal.
We'll be there for you every step of the way to ensure that things go smoothly come tax time
There really isn’t that much difference in doing your taxes when you are a nano-business owner. You just add up all your self-employment income, take away all your self-employment expenses and then add what’s leftover to your regular T1 Income Tax Return.
For keeping track of things, we recommend you use an inexpensive bookkeeping app such as QuickBooks Self Employed. It is inexpensive at approximately $10/month and has all the pieces you need to run your micro-business smoothly.
It tracks your kilometres, which you get to claim as a tax deduction, through your phone’s GPS. As well, you can just snap a pic of a receipt and it auto categorizes it as personal or business. This way you'll be organized come tax time with everything all in one place; thus ensuring you get the most tax deductions available to you as possible. Of course, like any reasonable business expense, the cost of QuickBooks Self-Employed is tax deductible.
We don’t just pay you and leave you to have big surprises come tax season. We are there for you!
Our support team and preferred providers are there to make earning income, tracking expenses, reporting to CRA and paying your taxes relatively simple. We even have simple & easy courses available in our online training app that teaches you everything you need to know.
You won’t have Income Tax, CPP or EI deducted from your pay, but you’ll still have non-governmental deductions taken out such as group insurance premiums, if you take part in that program.
The CRA helps smooth out retirement planning by requiring workers to contribute a portion of their earnings to the Canada Pension Plan (CPP). Then, when you reach a certain retirement age, you get a monthly payment back from CPP.
You'll be required to make contributions to the Canada Pension Plan (CPP) from any net business income you earn above $3500 each year.
CPP is paid on Net Business Income, not gross business income.
There are many easy ways to remit Income Tax & CPP funds to the CRA such as directly to them through their website, through a third-party tax preparation app or through a tax preparation provider, such as H&R Block, for example. CRA even has an app you can install that reminds you of all the important dates throughout the year.
Now-a-days technology makes remitting to CRA relatively easy & painless.
You are not required to remit Employment Insurance (EI) premiums on your Professional House Cleaning Income and thus will not be eligible to collect EI unless you access EI Special Benefits, which requires registration with the Employment Insurance Commission and then payment into the program.
The six types of EI special benefits are maternity benefits, parental benefits, sickness benefits, compassionate care benefits, family caregiver benefits for children and family caregiver benefits for adults.
If you are working somewhere else, as a regular employee, then you may qualify for and receive EI benefits as you would have paid into it through your other job. More information on EI can be found on the CRA website plus we provide in-depth information on it in our online training program.
We don’t pay Workers Compensation on you nor are you required to pay it on yourself. This means you won't be covered by workers compensation unless you purchase coverage directly from them. If you wish to do that it is available for a relatively low price.
Online Training Program + Your Support Team
We provide you with training on everything to do with being a nano-business owner through our online training so don't let it scare you! It truly is not all that complicated and we have a full team of Support Agents that are at the ready to assist you anytime you have a question or concern. Your success is our success!