2016-12-02 00:00:00TaxesEnglishGive your child real-world experience and extra cash while earning your small business a tax deduction by adding him or her to your payroll.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/03/Daughter-Folds-Cards-To-Accompany-Childrens-Clothing-Orders-In-Family-Business.jpghttps://quickbooks.intuit.com/ca/resources/taxes/hire-your-child-to-get-a-tax-break/Hire Your Child to Get a Tax Break

Hire Your Child to Get a Tax Break

0 min read

Adding family members to your small business payroll lightens your workload and decreases your tax liability. In most situations, your minor children are eligible employees, and the wages they earn are qualified business expenses that you may deduct from your income to lessen taxes. Your children must perform jobs that help your business generate profits, such as managing your freelancing firm’s social media accounts or passing out flyers to promote your contracting services.

A good rule of thumb is to ask yourself if you would pay someone outside of your family to perform the service. The salary must be reasonable for the services rendered, and it is important the children actually receive the wages and have control over how they spend their earnings. Remember to check local labour laws regarding minimum age requirements. Child labour laws do not always apply to family-owned businesses.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

Elimination of the Investment Tax Credit for Child Care Spaces

The Canada Revenue Agency has eliminated the Investment Tax Credit for companies…

Read more

Understanding British Columbia's Tax Benefits for Families With Children

If you have clients with children in British Columbia, the province has…

Read more

How to File Self-Employed Taxes

When you’re self-employed, you have different tax responsibilities than a traditional employee.…

Read more