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Question Description

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

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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.

Tutor K (29)

Really useful study material!