Tag Archives: CRA

You Have to Be Rich to Get a Minimum Wage Job! What It Cost for My Teen Relative to Get Their First Job

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My young relative landed the first job to which he ever applied. It was so easy: he applied online, arranged a time after school to attend the interview, accepted the employment contract, opened his first chequing account with a debit card to permit direct deposit of his pay, and showed up for work on time with the correct gear. But it’s a good thing his family was rich enough to pay all the costs required to get that first minimum-wage job!

What Are the Costs for a Student to Get Qualified for Their First Part-time Job?

Obviously, every job has different requirements. But many jobs have similar needs and the costs are similar to the person trying to land the job.

Here’s what my young relative needed to spend to get a job with a city Parks and Recreation department:

  • Emergency First Aid and CPR training $53
  • Police check $25
  • High Five Principles of Healthy Childhood Development $79
  • Acquiring the required safety equipment for the job $44
  • Leadership in Training $110

That’s right. He paid $311 to get qualified for his first minimum-wage job.

How Long Will He Have to Work to Re-Pay the Costs for Gaining a Job?

At $11 an hour, which is more than he will actually make after deductions, it will take over 28 hours of work for this student to pay back the costs of getting his job. At 3-6 hours of work per week, that’s a long, long time!

The costs for a student learning to be a life guard are much higher. They must take swimming lessons for years and then pay for their life guarding courses and certificates.

Isn’t It Outrageous to Pay So Much to Get a Job?

Well at first it seems crazy to pay that much just to get a minimum-wage job.
But then you start thinking about college and university costs.

To get a degree in Early Childhood Education from Sheridan College costs $8492 just for the tuition fees. I’m sure there are other costs and they may be quite significant.

What does the average E.C.E. earn? The jobs posted online in Ontario today  pay $14/hour. The payscale.com website says the average is $15/hour.

Without any deductions, at $14/hour, it would take about 606 hours of work just to pay the tuition cost for an E.C.E. diploma. That’s more than 15 weeks of working 40 hour weeks, although many of these jobs don’t offer 40 hours.

Yes, it costs a lot of money to get a job!

Be Prepared to Volunteer Just to Get a Job

My young relative also volunteered (unpaid of course) for over 130 hours before applying for the job. We know that the employer looks more favourably upon applications from people who have volunteered with their programs. It gives them a chance to test the person’s reliability and skills for free and shows a commitment to working.

We know other young people working as camp counsellors, life guards and swimming instructors. They were definitely expected to volunteer before applying for paid employment.

Do I Think My Young Relative Was Foolish to Pay So Much to Get a Job?

No, I don’t. I think a job is more than just the pay. My relative enjoys the type of work and is considering working in that area after graduating. It’s an interesting job and could lead to other types of employment in the future. There is a chance to make contacts and to obtain valuable references.

I do wonder and worry, though, if students in low-income families are not even able to apply for such jobs because of the high cost of the prerequisite training. If so, that’s deplorable.

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Did you ever list how much it cost to help someone find a job? Was it shocking how much money it took to find work? Please share your views with a comment.

How Did My Income Tax Program Use Up All of My Tuition and Education Amounts So Quickly?

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When you’re still attending college or university and not make much money it’s common to end up carrying forward large amounts of tuition and education amounts. It can look like you have tens of thousands of dollars to use to reduce your income tax payable. Yet when you start working full-time you may find the tuition and education amounts get used up way more quickly than you expect: here’s why.

A Common Mistake: Thinking Education and Tuition Amounts Reduce Your Taxes Dollar for Dollar

When you see big $$$ values in your carry forward tuition and or education amounts, you may start thinking it will be years before you have to pay any income taxes. After all, if you have $40 000 in carry forwards, and you’re only making $35 000 a year, they should last a long time, right?

Unfortunately, no.

The government loves making it SOUND like you are getting a big deduction.

So they say things like “You can write off $500 of your child’s fitness expenses!” They don’t say “And it will get you a whopping $75 off your taxes payable!” But that’s all the $500 saves you: $75 in federal tax payable.

Your Education and Tuition amounts do no reduce your taxes payable dollar for dollar.

How Does the Income Tax Math Work for the Education and Tuition Amounts?

Let’s look at an example.

Say you earned $35 000 in 2015.

According to the 2015 Ernst and Young personal tax calculator, in Ontario, with no extra deductions, that would mean you would owe about $4 820 in tax, most of which should have been deducted by your employer.

You don’t use up $4 820 of your education amounts though to reduce this tax payable to 0.

The education/tuition amounts are converted into credits at a really low percentage.

Line 23 (also called 323) on your Federal Schedule 1 is the amount of the education/tuition claim you are using up.

As you can see further down on Line 32 you apply a rate of 15% to that amount.

So to negate $1000 of tax owing, you have to use up $6 667 of your education/tuition amount.

To reduce your $4820 of tax owing to 0, it will use up $32 133 of your carried forward education and tuition amounts.

You would then get a tax refund of up to $4820 depending on the amount of tax that was with-held from your pay cheques and your other deductions and credits.

Don’t You Wish the Education and Tuition Amount WAS Applied $ for $ Against Your Taxes Owing?

If the education and tuition amounts were applied $ for $ against your taxes owing, it would be great, because it would mean the government was paying for your schooling.

Unfortunately, they are only willing to pay for 15% of your schooling. (Plus a bit more if your province gives you a tax break on your provincial taxes.)

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Did you get a great tax refund the first year you worked after finishing college or university? Don’t you wish you could get a refund like that again? Please share your views with a comment.