CPP and EI

Is there a way to contribute to CPP and EI if you open your own home daycare? I plan to open a daycare and it wont be registered so come tax time I will be "self employed" I want to protect myself and my family and ensure I still pay CPP and EI is there a way to do this?

Yes.

You need opt in by calling CRA. You not able make claim for one full year after opt in. Check what it cover. Not same as employee. Limited cover. Offer mat leave at 55% of annual profit on line 150 of last year tax return. So it not gross business income. It total income less any expenses claimed for food, power, water, insurance, craft, toys, property tax, and anything else. This might mean profit on tax return as little as $20,000 so mat leave would be 55% of that $20,000 income which not much.



Some cover for seriously ill dependant child and couple more situation but that all.

Once opt in, cannot opt out again for all time self-employed.

Work out what you would get. For lot of provider, it better to just save money. There no cover for if you lose all client or have reduced numbers. It only cover zero income situation if you close business.

You contribute to CPP as soon as you file your taxes as being self-employed. The CRA website has a list of pretty extensive guidelines as to what you can claim, how much, etc. It will automatically make you contribute to CPP - and unfortunately, being self-employed means you pay the employer's portion and the employee's portion. As to EI, call the CRA if you want to opt in to the program, but as Suzie stated above, it may not be worth it. You have to pay into it for a full year before you can use any benefits, and if you use benefits, you have to continue paying into it for as long as you are self-employed - you can't opt out again. You will only receive 55% of your income after deductions if you use the benefits, which for most of us, isn't worth it at all. I have a 2-week old and I simply took my unpaid vacation to have him and took 2 "easy" daycare kids back after that, and termed my 2 challenging ones (which I had to do for Bill 10 anyways). I would make more just taking a few B/A school children than I would being on the EI amount I would receive, so sit down and work out exactly how much you'd get back, vs how much you have to pay in every month, and decide if it's worth it.

For taxes (income tax and CPP) I generally set aside about 15% of my income throughout the year to pay at tax time.