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Question Description

How will the phasing-out of the penny affect my business?

Final Answer

As of February 4, 2013, the Canadian penny will no longer be distributed by the Royal Canadian Mint, which will result in a savings for tax payers of $11 million per year. There are certainly some implications for your business that you’ll want to be aware of:

- As of February 4th, businesses can decide whether they wish to continue accepting pennies or not from customers
- If the business decides not to accept pennies, then they should round the total of the transaction to the nearest 5 cent value according to the following guidelines:

     Amounts ending in 1 or 2 are rounded to the nearest 10 cents.
     Amounts ending in 6 or 7 are rounded down to the nearest 5 cents.
     Amounts ending in 3 or 4 are rounded up to the nearest 5 cents.
     Amounts ending in 8 or 9 are rounded up to the nearest 10 cents.
     Amounts ending in 0 or 5 remain unchanged.

- These changes only apply to the final, after-tax amount of cash transactions only. All electronic purchases, such as credit, debit, and gift cards, and foreign currencies remain unaffected. 
- The penny will still continue to retain its value indefinitely, so you will be able to continue to deposit pennies at your financial institution.
- Some businesses may need to update their Point of Sale software to account for these rounding rules for their cash transactions.

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