Option 2 – Banking after-tax dollars rather than hours

Some of you have been asking about the banked hours system and how to handle the taxes on the banked hours income for the employee. So here’s another option. In this scenario, we’re not using the number of hours the employee works as our benchmark, we’re using the take-home dollar amount that the employee requires. 

For this scenario, let’s say you want to guarantee 30 hours per week for an employee that makes $25/hour. The pre-tax amount is $750.00. The after-tax amount (assuming 18% tax) is $615.00. The employee will take home $615.00 each week, as long as they work 30 hours. Any amount over $615.00 is placed in a separate account and can be transferred to the employee on weeks when they don’t work as many hours. Here’s an example:

Here's an example of an employee's hours:

• Week 1 - employee works 20 hours @ $25.00/hr = $500.00 (pre-tax), employee has no extra income in the “bank”, so the employee’s cheque is for $410.00 aft...

Have you considered implementing a banked hours system for your core staff through the winter season?

It’s hard to live on an hourly wage during the snow season. Your pay is dependent on the weather, which is unpredictable. Moving away from a weather dependent pay scale removes the stress about money and allows you to keep your good employees.

Here's an example of how the banked hours system would work: 

• For the winter season, you’ve decided to guarantee your staff a minimum of 35 hours per week. 
• If the employee works 30 hours in a week, they will get paid for 35. The extra 5 hours (that they've been paid for but didn't work) is banked. 
• If in the next week they work 45 hours, they will get paid for 40 hours, because the 5 banked hours will be deducted from their paycheque. 
• If in the following week, they work 45 hours, they will get paid for 45 hours because there are no banked hours. 
• They will always get paid for a minimum of 35 hours, even if they don't work 35 hour in...