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Biomom
04-24-2012, 09:10 AM
Hi,

I'm about to open a daycare and am in the dark as to how much income I might have and how to figure this out- mainly because I'm not sure how much the government is going to take.
I know it depends on how many kids, what food I'm serving, etc.
So I'm wondering, on average, how much a daycare operator might "take home" if they have a daycare that charges about $40/day and have about 4 kids.

Thank you!

Play and Learn
04-24-2012, 09:17 AM
I have no clue, as I had to pay back again this year (this is my second year operating). Others may be able to help you out better.

BUT....please remember that you may not always be full as you would like to be. My first year of having the daycare, I only had 2 f/t children! In my second year, I started out full, but then one dropped out very quickly (thank god), and now have 2 f/t, 2 p/t and a before school child. Fortunately for me, we can afford to not have a full daycare.

Inspired by Reggio
04-24-2012, 09:34 AM
Hon .... depends on how much income you WANT to take home ;)

How many weeks are you going to be closed for vacation or personal time - will you charge parents for that?

How much do YOU want to budget to spend on food?

How much do YOU want to budget to spend on creative art / sensory or other consumable learning products?

Are you going to take field trips and outings with your children - is that included in your fee or will you charge parents 'extra' for those things?

How much of your home is your business going to take up - you can write off a % of your shared home expenses based on this - so look at your current monthly hydro, gas, sewer and other bills and expect those to go up by a good 10 due to the additional use of things and factor that into you budget.

How much are you 'willing' to spend on toys and equipment for your program ... this will affect if you are comparable to others in your neighborhood.

Will you have a website? Will you pay to advertize if so how much.

So for example the MAX you would get in revenue for 4 children @ $40 / day if you are working 5 days a week you are looking at revenue of $800 ... how much you get to KEEP depends on YOU!

So you could choose a budget of $2/day/child and focus on cheap processed foods for meals and snacks or you could choose to budget $5 per had and focus on mostly homemade foods and minimal processed or you could choose to spend even more and go organic all fresh menu!

Ultimately it is up to YOU in what you want to offer in order to feel proud of your daycare and what you HAVE to offer in order to attract enough clients in order to make a viable business!

The reality is that after expenses and taking into account that we often work 12 hours days over all home childcare providers generally make less than minimum wage doing hard demanding work ... this is not a 'get rich' business .... this is a business that allows us to earn money while being home for our families - it is THAT investment that makes us rich ;)

As for how much to put aside for TAXES ... I generally put aside 15% a week in my revenue into savings ... this more than covers my tax bill at the end of the year plus helps to cover 'down times' in enrollments when I might need to draw on those savings!

Biomom
04-24-2012, 11:13 AM
Thanks! I was realy just curious about how much I would have to pay in taxes. I realize it's not a get-rich-quick business and am hoping to create a daycare that lives up to my value sin raising my own children. I just don't want to send us to the poor house either! :laugh:

playfelt
04-24-2012, 11:30 AM
Planon half of what you earn as being yours to keep. The rest will be split between what you spend on the daycare - food, supplies, toys, outings, as well as come tax time you may have to pay - but don`t forget if you were working outside the home you would have tax taken out of each paycheck - it just seems worse if you have to pay a couple thousand dollars in April just make sure you budget for this possibility. There should also be some used to pay for household expenses that you would be paying anyways like utilities but you get to claim some of that from your daycare income. The next thing is how you conduct your program will determine how much of the second half is left over to also be your income. That depends on the type of program you run - I make more games and we all play then it is put away till next time compared to crafts that use supplies that go home as in once and done so that helps a lot.

You may use more than the half when you are first starting out till you have everything you need and then after that you have to start scrambling to find enough deductions.

Inspired by Reggio
04-24-2012, 12:06 PM
With how much tax you pay it also depends not only on your business income but the household income - for example I have done my income tax first and I will be eligible for a REFUND and than I do my husbands and go back and add the little section in mine were it says spouses income when I add his suddenly I OWE ... reason being tax credits I was eligible for I loose because as a household our combined income is just over the eligible line ... same with some years we would have owed like $4000 however purchasing a RRSP of a wee bit more than that pushed us into me getting a refund ... so it is so variable for sure!

playfelt
04-24-2012, 12:11 PM
You will always have your Canada Pension to pay so plan on that at least. Again if working outside the home it would have been taken out with each pay but you have to self assess on your earnings.

Crayola kiddies
04-24-2012, 01:07 PM
CPP is all I had to pay this year thankfully ; )

Littledragon
04-25-2012, 10:01 AM
I'd like to add on this topic. Has anyone paid in EI? How did you do it?

playfelt
04-25-2012, 01:55 PM
Although there is a new program where you can pay in the benefits for what we do don't really warrant it. You would be better to just put aside a bit each pay. Many caregivers do not take off a full year so they don't get the full package of benefits and amount paid is based on income and amount paid in so still you don't get much. And I have heard there are long term issues of having to continue to pay even when you don't benefit anymore.

Inspired by Reggio
04-25-2012, 02:41 PM
I agree with Playfelt .... self employed people can now buy into EI .... however you are paying both the employer AND the employee contribution so it is EXPENSIVE however when you make a claim you only get 55% of whatever you claimed as INCOME and well most of us do a pretty good job of getting that down to less than minimum wage so you would only get 55% of that .... and yes once you buy into this program you have to continue to pay into the system as long as you are 'employed' either in your own business or if you return to the workforce .... so if you are planning to be self employed for a long time this is a HUGE investment you are making 'in case' you might get sick or need a mat leave.

Yup - since we have the choice I too personally think in our industry is much better off saving up each week for our own 'emergency' rather than paying into a collective pop ... cause if we end up not having one than we can use that money ... and ALL of it to boot ... for EARLY RETIREMENT ;)

Inspired by Reggio
04-25-2012, 02:43 PM
If you are concerned about 'sick leave' and not being able to work there are also extended life insurance options with 'short and long term' disability' that you can buy into which would IMO be more viable option than EI cause you can CANCEL those if you feel you are no longer needing them ;)

bright sparks
06-11-2012, 02:15 PM
There is a plan called Edge Insurance with different options.

For example, before my husband and I got permanent residency my husband took this insurance. I could have taken it also but chose not to at this time but it was worth it then as my husband wasnt eligible for EI so you can imagine what a mess we would have been in if he'd had an accident and not been able to work. This is not for illness though just for accidents. You can take it out for workplace only or work and personal life so the premium can vary. So if you pull your back out lifting children or any kind of accident you can imagine then you would be covered. 2 options avaible beyond the work/home life options. 1 is 30 day waiting period before you can get income replaced but this goes on till the age of 70. 2nd option is called 0-5 so 0 waiting period paid out for a maximum of 5 years. When getting a quote you decide how much coverage. Its entirely up to you so no 55% or 80% income. If you make $3000 a month and want to pay a premium to replace all of it, a little less or a little more then its your choice.

I think this is a great option. While it may not be ideal for all, I know for us it was huge piece of mind. Feel free to send me a message for the company details :)