Self employment question

(maybe) a quick question:
The city is opening up 4 pools for "One on one training". This means people book a time slot online and then you bring your trainer/coach with you. The city website states "Trainers must be professional, certified, paid and provide active instruction. Trainers may be asked for valid certification; failure to produce may result in no access."
Because I haven't yet been recalled (I'm low on the seniority list, but will likely get called back when they open more pools/extend swimming times)I'm on the EI gravy train. Some people have approached me to see if I would be their "Trainer". Some people just want a babysitter while they swim and others have asked for their younger kids. I'm finding myself not wanting to do COVID projects... I would rather work

So I guess 2 questions: a)If I take payment (say $20/hour) what do I do for taxes, claiming EI? Just keep track of the income? Or being technically self-employed I have to file for anything? Which leads to b)do I need to get liability insurance or anything else?

Tempted to just say I'll do it for a cheap case of beer and just do it casual... but would there be anything that could get me in trouble even doing that? It seems like it might be a hassle to even offer doing this.
Any help would be appreciated!

[bagofpucks]

I had a similar gig. I started doing private and one on one goalie coaching sessions until one day I realized I had accidentally started a legit business. It’s hard to give great advice without knowing more details, but here’s some general stuff:
1) Yes, you should track it as income and this will impact your EI and likely will make everything painful.
2) if you see this as a potential business opportunity, set up a corporation try your best to do things “right” off the bat (I guarantee you will make mistakes, I definitely did
3) liability can be complicated. Because I was literally shooting rubber discs at children, I was unable to get reasonable business insurance. As my business grew, I was able to piggy back off of the insurance of the hockey associations I worked with, so you could see how that works with the pools as well. Incorporating also helps with liability.
4) Obvious business advice is obvious, but understand your costs and what you will need to charge to make a profit. And don’t undersell yourself. Find out what your “competitors” are charging. I was 16 at the time and started charging $35 per hour for coaching, which I thought was the biggest win in history. My competitors were charging $75-$100 at the time. This is going to sound crazy, but there were times I was making $250 an hour.

Feel free to PM me if you have more specific questions!

[lazypucker]

Can't you do the training as "cash only?" I am guessing the people calling you to train them are people that already know you, not strangers off the street. I know it is a grey area in terms of tax implications, but if you position it as "doing a favour" for a friend and they pay you cash (no paper trail), will this work? I have done it for tutoring neighbour's kids (and referrals from them) for cash, but I know what you are doing has some kind of licensing and liability issues.

[squiggs96]

Originally Posted by bagofpucks

2) if you see this as a potential business opportunity, set up a corporation try your best to do things “right” off the bat (I guarantee you will make mistakes, I definitely did

You don’t have to set up a corporation to have a business. There are a lot of reasons to have a corporation but there are also a lot of reasons to have a sole proprietorship. There are many things that can be done in both structures (e.g. claim GST ITCs, earn income, write off business expenses) but there are key aspects in each one that can’t be done in the other. Telling someone to incorporate a business, when you don’t understand the person, her business, or the differences, is bad advice. What if she incorporates, but is deemed a personal services corporation? She would then have to claim that income at the highest rate and many of her expenses would be denied. I would recommend not giving blanket advice like this, especially when it’s not your area of expertise. It’s the same reason I don’t tell people how to swim or how to pronounce things in Greek. It’s not my specialty.

[Canadianman]

Originally Posted by lazypucker

Can't you do the training as "cash only?" I am guessing the people calling you to train them are people that already know you, not strangers off the street. I know it is a grey area in terms of tax implications, but if you position it as "doing a favour" for a friend and they pay you cash (no paper trail), will this work? I have done it for tutoring neighbour's kids (and referrals from them) for cash, but I know what you are doing has some kind of licensing and liability issues.

it's not a grey area at all. You are telling Puxlut to break the law.

[photon]

Yeah I ran my business as a sole proprietorship for a long time, every time I talked to a tax accountant they said it just was better for how I was doing things. My wife's we incorporated almost right away.

So yeah talk to a good tax accountant about that.

Also talk to an insurance broker, we used to carry errors and omissions insurance for one business we had, and an activity where someone could drown I would want to at least know what my risk was and how much insurance would cost.

As for how it impacts EI there is a calculation I think, my dad mentioned it to me when I tried to pay him for work he was doing in our basement:

https://www.canada.ca/en/employment-...ile-claim.html

If you decide to do it all above board (i.e. track your income, keep some for taxes and report the income and pay your taxes) there's some good free online tools to do that. I used to use this one: https://www.waveapps.com/

Very cool, easy to keep track of stuff, even generate invoices and generate reports for doing the taxes or sending to an accountant (you can even give them read-only access).

[bagofpucks]

Originally Posted by squiggs96

You don’t have to set up a corporation to have a business. There are a lot of reasons to have a corporation but there are also a lot of reasons to have a sole proprietorship. There are many things that can be done in both structures (e.g. claim GST ITCs, earn income, write off business expenses) but there are key aspects in each one that can’t be done in the other. Telling someone to incorporate a business, when you don’t understand the person, her business, or the differences, is bad advice. What if she incorporates, but is deemed a personal services corporation? She would then have to claim that income at the highest rate and many of her expenses would be denied. I would recommend not giving blanket advice like this, especially when it’s not your area of expertise. It’s the same reason I don’t tell people how to swim or how to pronounce things in Greek. It’s not my specialty.

To be clear, I’m not saying that setting up a corporation is right for every situation and I said right in my post that I’d need more information but here is some general stuff and I’d be happy to help out if she wanted to provide more details. I ran my business as a sole proprietorship for 5 years and a corporation for 5 years. If I had understood the business opportunity earlier, I wish I would have set up the corporation earlier. This was also the advice of my tax accountant for what seems a somewhat similar business model.

If it just turns out to be a way to make some extra money and have some fun helping out friends then that’s awesome and clearly a corporation is not the way to go. But if at some point she sees it as a business opportunity then I’d recommend incorporating.

[topfiverecords]

Originally Posted by Canadianman

it's not a grey area at all. You are telling Puxlut to break the law.

Not claiming the income on your tax return is breaking the law. Getting paid in cash is not. I pay for things in cash all the time. It is legal tender in Canada.

[mrkajz44]

Originally Posted by topfiverecords

Not claiming the income on your tax return is breaking the law. Getting paid in cash is not. I pay for things in cash all the time. It is legal tender in Canada.

Well, considering the advice included:

but if you position it as "doing a favour" for a friend and they pay you cash (no paper trail), will this work?

it's pretty clear they were implying you could do it for cash only with no paper trail to avoid reporting the income for tax and EI purposes.

Being a tax guy myself, I think the idea of setting up a corporation right away is probably too big a step based on the original post. Just start keeping track of revenues and expenses and report it as a sole proprietorship on your T1. The income will likely reduce you EI benefits, but I don't really do work in that area so I don't know the $ impact there.

[Geraldsh]

Before worrying about what business model to use, find out what exactly is required to be certified as a trainer.

Originally Posted by Geraldsh

Before worrying about what business model to use, find out what exactly is required to be certified as a trainer.

I'm qualified. I'm a Swim Instructor that is able to teach "Fitness Swimmer" levels as per Lifesaving Society, a Lifesaving Sport Coach and am NCCP Swimming Fundamentals Coach trained. Not to mention being an amazing swimmer myself! I know my stuff

I'm not in it to make tonnes of money... just helping some people out that want to stay healthy. But I want to make sure I'm following rules. I will keep track of payment (which is really nothing compared to what people that are in it for the money are charging) and report this to EI. My big thing is liability? I have no idea what could possibly happen during an hour swimming in the pool? These people are swimmers and know what they are doing, they just need the body on deck to meet the "One-One Training" rules.

I emailed Lifesaving Society this morning asking about becoming an independent Affiliate and if that would solve my questions. I'll let you know what they say.

Thanks for all the info!!!

[Sliver]

Originally Posted by Puxlut

I'm qualified. I'm a Swim Instructor that is able to teach "Fitness Swimmer" levels as per Lifesaving Society, a Lifesaving Sport Coach and am NCCP Swimming Fundamentals Coach trained. Not to mention being an amazing swimmer myself! I know my stuff

I'm not in it to make tonnes of money... just helping some people out that want to stay healthy. But I want to make sure I'm following rules. I will keep track of payment (which is really nothing compared to what people that are in it for the money are charging) and report this to EI. My big thing is liability? I have no idea what could possibly happen during an hour swimming in the pool? These people are swimmers and know what they are doing, they just need the body on deck to meet the "One-One Training" rules.

I emailed Lifesaving Society this morning asking about becoming an independent Affiliate and if that would solve my questions. I'll let you know what they say.

Thanks for all the info!!!

Hey Puxlut - if you can teach levels I'd be really interested in getting my kids into lessons with you. My daughter (14) is in junior life savers or something like that and it would be amazing if we could get her leveling up. She loves swimming. Not sure what level my son (13) is in, but I'd like him to progress, too. He's not as enthusiastic about swimming as my daughter, but I'd like to get him out there.

[Leondros]

Originally Posted by topfiverecords

Not claiming the income on your tax return is breaking the law. Getting paid in cash is not. I pay for things in cash all the time. It is legal tender in Canada.

Lol - they straight up said there was no paper trail. It was insinuated... Sure its not illegal to get paid in cash, but most time people want to get paid in cash so they won't get caught by the CRA pocketing extra revenue.

Always engage a tax lawyer or tax accountant (my preference but I'm biased) to look at your situation as every one is unique. It really pays off to do this upfront and structure it correctly as the implications of not doing so can be costly.

As for your situation and given you are on EI there is the 50 cents to the dollar rule. If you earn money while receiving EI benefits, you can keep 50 cents of your benefits for every dollar you earn, up to 90 percent of your previous weekly earnings. Above this cap, your EI benefits are deducted dollar-for-dollar. You are not eligible to receive EI benefits if you work a full week, regardless of the amount you earn. However, this will not reduce the total number of weeks payable on your claim.

With COVID they did make changes to this rule. You keep the greater of $75 or 40 percent of your weekly benefit rate each week (the earnings from about one day of work) without any deduction from your benefits. Any amount earned above the $75 or 40 percent is deducted dollar-for-dollar from your benefits.

You may be eligible for this temporary option if you:

previously chose to use the alternate earnings rule for an EI claim established under Pilot Project 20, and have since established a new claim starting on or after August 12, 2018, for any type of EI benefit; or are currently on an EI claim that started before August 12, 2018.

Hope this helps answer atleast your first question.

[topfiverecords]

Originally Posted by Leondros

Lol - they straight up said there was no paper trail. It was insinuated... Sure its not illegal to get paid in cash, but most time people want to get paid in cash so they won't get caught by the CRA pocketing extra revenue. ...

Eesh, chill out. I misread the order of posts, who I responded to and what was originally quoted before that post. One of the posts was collapsed due to the ignore list.

Originally Posted by Sliver

Hey Puxlut - if you can teach levels I'd be really interested in getting my kids into lessons with you. My daughter (14) is in junior life savers or something like that and it would be amazing if we could get her leveling up. She loves swimming. Not sure what level my son (13) is in, but I'd like him to progress, too. He's not as enthusiastic about swimming as my daughter, but I'd like to get him out there.

If/when I get this figured out I'll shoot you a PM Us Bonavistians have to stick together!

[Leondros]

Originally Posted by topfiverecords

Eesh, chill out. I misread the order of posts, who I responded to and what was originally quoted before that post. One of the posts was collapsed due to the ignore list.

Sorry, didn’t mean to pile onto you as I didn’t read the posts below yours either.

[Locke]

Originally Posted by Puxlut

If/when I get this figured out I'll shoot you a PM Us Bonavistians have to stick together!

If you need Tax advice fire me a PM and we'll walk through it.