Summer jobs are important for many students to help pay for tuition, housing, a major purchase, or even future travel. Summer employment is equally important for small and medium-sized businesses [SMBs] because of the current extremely tight labour market. Both students and their employers can benefit from making the most of these summer opportunities.
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Tips for Students
Here are a few tips that will help students gain the maximum benefit from their summer employment.
Student Tip #1: Treat Your Job as Full-Time Rather Than Part-Time
Many full-time careers started with a part-time job. Try to get the maximum learning from your position. Ask for additional tasks and training. Show that you have a range of skills beyond what was originally required. This may lead to additional opportunities on the job, during the school year, and in the future.
Student Tip #2: Develop a Savings Habit
A summer job is a great time to learn how to handle your finances. Set a savings goal so that you have money for what you need when summer ends plus a bit more for unexpected expenses. Consider opening a Tax-Free Savings Account (TFSA). Any money that you earn in a TFSA, like interest or on investment, is tax-free, and you can withdraw money whenever you need it. For more experienced students who are earning higher wages, you might want to consider opening a Registered Retirement Savings Plan (RRSP) to help you reduce your taxable income. Speak to your bank or financial advisor about the benefits of the various savings vehicles available.
Student Tip #3: Keep Good Records for Tax Purposes
If you earn a certain level of income over the summer, you will be required to pay federal and provincial income taxes. Make sure you keep all pay records and that your employer has correct contact data for you, including your social insurance number (SIN). Paying even a minimal amount of tax can make you eligible for a number of government credits during the year.
One cautionary note—if you are working multiple jobs, it is possible that the income from each individual job may not be sufficient to require tax deductions at the source by your employer. But adding up all of your employment income may put you at a level where you are required to pay some income tax. One solution is to ask one of your employers to deduct an amount from your wages for tax purposes on a regular basis so that you do not get a nasty surprise at tax time.
Student Tip #4: Starting Your Own Business
For those students who decide to start their own businesses for the summer, it is important to set up proper accounting and bookkeeping records, as you may be required to pay business taxes if you reach a certain threshold of income. Make sure to set up a separate bank account for your business and do not mix personal and business finances.
Use the opportunity to build up a relationship with a bank and even a future line of credit should you eventually wish to expand your business.
Tips for Employers
Here are a few tips for businesses that take on students for the summer.
Business Tip #1: Treat Summer Students Like Full-Time Staff
Employers should try to integrate summer students into their overall operations to create opportunities for skill development and expand their contributions to the organization. A well-planned summer student program can be part of an important long-term recruitment strategy. Some training should be included as part of the program.
Business Tip #2: Pay A Fair and Competitive Wage
If possible, try to pay more than the minimum wage. Many summer jobs have the equivalent demands as full-time jobs, and employers should try to reduce any obvious pay gaps. In the current labour market, employees will change jobs on short notice if they find a position where their skills and experience are better recognized and rewarded.
Business Tip #3: Keep Good Payroll Records
Again it is important to keep complete and accurate payroll records, even for part-time employees. Make sure to keep full personnel records as well as forwarding information for tax purposes should students change addresses during the school year.
Business Tip #4: Stay in Touch During the School Year
When students go back to school, try to stay in touch with them. They may be able to provide part-time services during the school year, either on-site or remotely. They can also refer future prospects for employment, as well as be a source of goodwill for your business.
If you have questions or comments about issues raised in this article, please contact us.
Published by TAAG Corporation
© 2022 TAAG Corporation
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