Yup, it’s official. Our penny is now becoming a part of history. As of February 4, 2013 there are no more pennies being made in Canada. This has happened with other coins in the past. Yes, we used to have half pennies. But no-one alive would have used them, as they haven’t been around since 1858.
So what does elimination of the penny mean to business today?
Firstly, it only affect CASH transactions!
Everything that is done through debit, credit, or cheque is still to include the cents.
With cash transactions, as long as there are pennies, then they can still be used.
But they will soon be out of circulation. And to there is rounding that has to be done on cash transactions. All rounding is to be done after adding on GST. Here’s a rounding table for some examples:
Example of rounding for cash transactions:
|Total Bill of
Taxes, Fees, etc.
|$1.01 or $1.02||Round down||$1.00|
|$1.03 or $1.04||Round up||$1.05|
|$1.06 or $1.07||Round down||$1.05|
|$1.08 or $1.09||Round up||$1.10
GST is not affected by the rounding of cash transactions. This means that the net amount that is changed by the rounding of cash transactions will only affect the net income of a business. In theory it should even out to zero.