Going hour rate

[rob love]

Yes, but you also have to claim the cheque given to you as income. In the end it will only give you a higher tax bracket with a very marginal return.

ie: you work for the charity, and they give you $1000. You give the $1000 back to the charity and get a tax receipt for a $1000 donation.

At tax time you must claim the $1000 as income and will pay approx 35% for income tax. (varies from province to province.....I believe Ontario workers simply give all their income directly to the Ontario government in order to fund failed hydro projects and for computer technicians to wipe out computer hard drives).

You then claim the $1000 tax deduction and get approx 35% return for the $1000 donation. You actually will get a few dollars more depending on the province, but at the end of the day the return is somewhat marginal.

Now if it was work for a political party, then you get some good rates of return, but not for a non-profit.

As well, does this end up forming an employee/employer relationship with the volunteer which will create certain liabilities and responsibilities, or is the volunteer treated like a contractor?

[Gordon Yeo]

Rob

We don't give it all to the Ontario Government . We have to help pay the $21,000,000.00 bill the auditor general screwed us with for the Senate investigation.

[Perry Kitson]

Rob,
Thanks for bringing that up. I knew I was too giddy this morning!

Perry in Ontario

[chris vickery]

So, using Rob's math:

Cheque for "work" $1000 less $350 income tax = $650 in pocket, negative $350
Donation from own pocket of $1000 x rate of refund = $350 in pocket, negative $650.
Looks like a zero proposition to me and a whole lot of hasstle...
Who wants to claim additional income on their taxes, have to make a charitable donation, wait for the receipt, apply it to their tax return and then wait for it to all wash out with CRA?
This is assuming that the "work" does not actually cost you more in taxes as your income moves out of one bracket into another. In that instance you will end up not only volunteering your time but paying for it too.
The whole idea of volunteer work is to do work for FREE.

[CWO (ret) Gilles Aubé]

Ok Rob but if we exchange cheque as per the rules
then what would be THE HOUR RATE for rebuilding a 40mm?
Gilles

[rob love]

What relevant trade training or certification does the guy doing the work have? If he is a mechanic, then $25-30 an hour is a reasonable rate. If he is an ex-weapons tech, then $12-18 an hour (sorry Gilles) as that trade is not particularly in demand on civvy street. Most retired weapons techs that I know ended up driving cab or becoming commisionaires. Even the locksmith trade (a weapons tech sideline) is hard to maintain work in.

If he is Joe from down the street with no certification, then manual labour rates of $12-15an hour would be more appropriate.

If he was providing the workshop, you can double most of those rates or more. Even Cdn tire charges $105 per hour these days, although the mechanic himself will more likely be making $23.

As long as the amounts are reasonably believable, what your non-profit pays him is your business. He will then write another cheque for the same amount as a cash donation to your organisation. That one will be the CRA's business. Then he will wait until tax time at which time he will recoup his cash, or maybe even a couple dollars more.

[rob love]

Originally Posted by chris vickery

So, using Rob's math:

Cheque for "work" $1000 less $350 income tax = $650 in pocket, negative $350
Donation from own pocket of $1000 x rate of refund = $350 in pocket, negative $650.
Looks like a zero proposition to me and a whole lot of hasstle...
Who wants to claim additional income on their taxes, have to make a charitable donation, wait for the receipt, apply it to their tax return and then wait for it to all wash out with CRA?
This is assuming that the "work" does not actually cost you more in taxes as your income moves out of one bracket into another. In that instance you will end up not only volunteering your time but paying for it too.
The whole idea of volunteer work is to do work for FREE.

If you check your provinces rates of return on charitable donations you will find that most give you the deduction at the highest rate of taxation, so in the end you will come out slightly ahead. You just have to remember that the actual return will only be the difference between your tax rate, and the deduction rate.

[rob love]

Originally Posted by Perry Kitson

Rob,
Thanks for bringing that up. I knew I was too giddy this morning!

Perry in Ontario

Originally Posted by Gordon Yeo

Rob

We don't give it all to the Ontario Government . We have to help pay the $21,000,000.00 bill the auditor general screwed us with for the Senate investigation.

Sorry Ontarions. My province has no money anymore either, only difference is we can't pinpoint where the heck it all went. Doesn't matter so much to us, as wel are locked in our homes for 9 months of the year anyway due to snow.