Hi,

I recently moved to Canada from Europe and have started working as a freelance designer. I'm a bit thrown by the payment system here. Can anyone tell me that if I give an hourly quote of say $40, does that include tax or do I add tax onto that? Also, to any Canadian freelance designers out there know what the tax percentage is?

Thanks for any help,

M

hmmm.... not sure about Canada (Crazy Wabbit might know), but I don't charge tax on the design part. Only printed items.

Thanks. Good to know.

m

Even in the states it varies. My CPA advised I charge tax on design and print, I'm in Texas. So I enter my "quote plus tax" if the client is in Texas.

In Ohio I do not need to charge tax for design work, only something tangible like a print job.

services i do not tax... print jobs include tax/shipping in the total. any supplies needed for projects (adhesives, stock, special items) are logged and receipts saved, and that gets tacked onto the total bill.

We never tax services, our headquarters is in Atlanta Georgia, and by state law, services are tax free, so because our headquarters is in the state of georgia, even though we have other offices out of the state, and clients out of state, we do not have to tax.

Sorry tobi, wabbit will have to let you know but for those of you here in the States I learned something the other day. Here, at least in California, if you send your art via a file to your client no tax is needed. If you give your client a DVD, CD or some sort of disk, you're suppose to charge tax? I don't get it but do you guys have tax laws like that in other States?

Services are tax free, tangible objects are taxable. That is why if you send your art via a file it's tax free, your sending a service. But if you send it on a dvd or cd, it is taxable because you are sending them a tangible object.

Hi, Shades is right, you have to charge PST 8% on all your sales.
If you make less than $30,000 you can hold off to GST which is 6%.

All PST has to go back to the government, you have to acquire a PST number so that every now and then you return all the PST you collected to the government.

Again, it is STATE and COUNTRY dependent. Call your CPA to find out when you should be charging tax.

In Colorado - you would have to charge tax on the CD itself - not the design service, IF you list the CD as a separate line item on the invoice.
The other way to deal with it is to list the CD as part of the services package, or not charge for the CD.

I generally provide all services on one invoice, and all item sales on another invoice. So one invoice for the design, and one invoice for the printing.
Keeps things very clearly separated.

But, the best thing to do it talk with your CPA and do what he/she tells you.
There are also (at least in Colorado) free classes given by the state that explain the tax law.
Also, some cities and counties have additional regulations that you have to follow. Mine has a "home" tax that I have to apply to all sales in the same city as mine. What a pain in the butt.... if only we lived four blocks west then we would have one less tax to deal with!

Thanks everyone for your help! Much appreciated.

m

Hi Tobi,

I found this.

"The profits of the business are taxed as part of the owner's personal income.
It does not need registration if the business name is exactly the same as the owner's name but must be registered with the province or territory if the name is different or if there are any additions to the owner's name.

There's a possible tax advantage as the owner can deduct business expenses and losses.

As a sole proprietor, you must register for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) if your worldwide annual taxable revenues are MORE than $30,000.

You are required to make Canada Pension Plan/Quebec Pension Plan (CPP/QPP) payments on self-employed earnings or pensionable earnings for the year.

Any business that collects provincial sales tax is required to register with the provincial government in the province of operation."

I freelance in addition to my full-time job. My advice is to get an accountant.

Good luck