Going hour rate

[CWO (ret) Gilles Aubé]

I need to make a formal appraisal for work done on a 40mm gun.
What would be the hour rate?
This is for a tax credit and it has to be proofed and sure I will be challenge by the tax peoples.
I am open on any legal suggestions.

Gilles

[rob love]

Gilles: You cannot give a charitable receipt in Canada for labour performed. You can only give a receipt for the transfer of property. If the person doing the work provided any goods of value, ie paint, hardware, etc, you can give a receipt for those. But labour is not something you can give a receipt for. This has been ruled on by the courts, and no chartered accountant would touch such a receipt with a 10 foot pole. You would be putting your organization's charitable/gifts to the crown tax status at risk.

For a bit of a read on the subject, see here: http://www.cga-canada.org/en-ca/Abou..._taxforum.aspx

[maple_leaf_eh]

What is the rate of pay for a Master Gunner? An NCO with enough time-in-rank and years of service to make a fair assessment.

http://www.forces.gc.ca/en/caf-commu...pay-rates.page

Charge high-rate mileage, meals and incidentals.

http://www.tbs-sct.gc.ca/pubs_pol/hr...voyage-eng.asp

Charge a fair market rate for any tools or equipment you might need to complete the assessment.

Figure out as many days' rates for phone and internet as you need to complete your research.

And, leave something on the table if the negotiations get testy so you can 'sharpen your pencil'.

[rob love]

Terry
I am sure you are writing that with good intentions, but google "can you give a tax receipt for labour" and see what comes up. Or check the link I gave.....it makes it pretty clear.

Dozens of websites also make mention that they cannot give receipts for labour.

[maple_leaf_eh]

When I started writing, you had not replied.

[Bruce MacMillan]

There is a way to do this legally. You submit a bill and the organization issues you a cheque for your services. You then write a return cheque back to the organization (the cheques effectively cancel out). This makes it a donation of money and they can then issue you a tax receipt for the donation.

From the horses mouth:
http://www.cra-arc.gc.ca/chrts-gvng/...srvcs-eng.html

[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.