This document outlines finance and accounting practices of Hypha Worker Co-operative, including:

  • List of accounts at our financial institutions
  • Client invoicing and accepted payment methods
  • Member payroll and expense reimbursements
  • Tools and procedures for bookkeeping, accounting, and tax remittances

There are two organizational roles associated with carrying out the day-to-day financial processes at Hypha—the Finance Steward and Payroll Coordinator.


Financial Accounts

  • Financial institution: Desjardins
  • Account type: business chequing
  • Payment requirements from account:
    • <= CAD$200: sign-off by one signing member in the Finance WG
    • > CAD$200: sign-off by two signing members in the Finance WG

Hypha is expected to conduct business with clients from other countries and is ready to accept funds in CAD, USD, EUR, and GBP. We use TransferWise to minimize transaction and currency exchange fees. Our TransferWise account has local accounts in Canada, United States, Europe, and the United Kingdom, so we can bill clients as a local financial institution in their local currency. Our TransferWise account does not require multiple signatures, and the Finance WG is responsible for transferring money into our main Desjardins account when accumulated funds exceed a CAD 10,000 threshold, or earlier as deemed appropriate.

Invoicing Clients

Hypha charges clients on a sliding scale, and projects may be billed hourly, weekly, monthly, or per project, depending on the specifics of each project. The recommended practice is to send an invoice every month, or a quote if the amount for the month is small and at the discretion of the project.

Member Payroll

Member wages are paid on the pay day, which is the 15th of each month or the last working day prior if the 15th happens to land on a holiday. A Member's wage is calculated based on the billable hours of work rendered up to the end of the previous month. For example:

The March 15 pay day covers the "pay period" of February, and it pays for the work rendered throughout the month of February.

Before the 7th of each month, Members must submit payroll information to the Employee Payroll sheet in order to be paid for the pay period covering the previous month.

All wages, expense reimbursements, and withheld taxes are managed by the Payroll Coordinator using Wagepoint and Quickbooks Online, which are linked to our main Desjardins account.

Calculating Member Wages

Each Member's wage for a pay period is calculated based on the projects and roles they participate in, and it usually varies from month to month.

Pay from billable project work will have a percent-based portion (the "clip") deducted from it to fund administrative costs and collective programs of the Co-operative. Collective programs, current and prospective, include:

  • Vacation pay
  • Public holiday pay
  • CPP & EI employer contributions
  • Member health benefits (future)
  • Solidarity projects fund (future)
  • Member & co-op development fund (future)
  • Reserve fund (future)
  • Other collective expenses of the Co-operative

The regular pay of a Member is calculated with:

REGULAR_PAY = (1 - CLIP) * BILLED_AMOUNT (before transaction costs)

The clip is currently set at 35% and is the same across all projects over a period, but can be revised as necessary by consensus.

In addition to the regular pay, Members are entitled to:

  • 5% public holiday pay based on the regular pay amount
  • 4% vacation pay based on the regular + public holiday pay amount
  • CPP & EI employer contributions

These annualized amounts are calculated and included for each pay period. You can use the Wage Calculator to determine these amounts.

After tax withholdings and other applicable deductions (e.g. CPP & EI employee contributions), the net amount is electronically transferred to the Member's bank account on pay day using Wagepoint. Refer to the guides for Payroll to set up the payroll run for each pay period.

Expense Reimbursement

Member expenses eligible for reimbursement should be submitted to the Expense Reimbursement sheet and receipts uploaded to Employee Expense Receipts in the same quarter they are incurred. Reimbursements are paid out with wages on the next pay day, but do not appear on tax forms.

Follow the guides for Expense Reimbursement to submit an eligible expense.

Public Holiday Pay

Hypha is closed on public holidays and Members recieve 5% annualized public holiday pay in their wages every pay period.

In the case where Member-workers work on holidays, they receive regular wages with "substitute time off" and there is no expectation of "public holiday plus premium pay", following the Employment Standards Act of Ontario. Wages for work performed on public holidays are calculated without "premium pay" because Members have significantly variable hours of work per period and a 5% annualized public holiday pay is included in Member wages in every pay period. Members are already adequately compensated for any "substitute time off" and set their own schedule. This strikes a balance between those who want the time off and those who want the flexibility to work on the day.

Reporting & Remitting Taxes

Hypha has the following program accounts with the Canada Revenue Agency (CRA):

  • ☑️ RC0001 Corporate Income Tax (RC) is filed/reported and remitted/paid each tax year
  • ☑️ RP0001 Payroll Deduction (RP) is reported and paid each pay period
  • ☑️ RT0001 GST/HST (RT) is reported and paid each quarter

Corporate Income Tax (RC)

Hypha is incorporated as a non-share capital worker co-operative under the Ontario Co-operative Corporations Act, and is organizationally a non-profit. For income tax purposes, Hypha is a non-profit organization under the Canadian Income Tax Act. Net assets are put into funds restricted for a particular purpose in accordance with our organizational mission, and our balance sheets show zero retained earnings/profit.

At each fiscal year-end, set on June 30, the Finance WG works with our accountant and bookkeeper to file our annual corporation income tax return, even though we pay no corporate income tax as a non-profit organization.

Payroll Deduction (RP)

Wage deductions and remittances are handled through Wagepoint on their non-accelerated remittance schedule. If any pay period is skipped, a nil remittance is manually filed to CRA directly.

At the end of each year, Hypha issues a T4 to each employee and a T4A to each contractor to support personal income tax filings, and reports to CRA accordingly. This is also handled using Wagepoint.


The GST/HST Information for Non-Profit Organizations applies to Hypha for GST/HST purposes. We started collecting GST/HST as of May 15, 2020 with a quarterly reporting period and our fiscal year end date for GST/HST return on June 30.

Much of our digital services (e.g. software development, system administration, design) for international clients (outside of Canada) are GST/HST zero-rated as they are classified as exported goods and services. This is different from GST/HST exempt because zero-rated items are still eligible for Input Tax Credit (ITC) on related expenditures. This is described under Intangible personal property and Excise Tax Act section 10 of Part V of Schedule VI.

Whether we will charge and claim GST/HST is dependent on a few factors. Here are some likely scenarios that may apply to Hypha projects:

  1. Hypha provides IT consultation and software development service to a Canadian client and subcontracts a Canadian web developer, spends $100 on web hosting and $1,000 on a laptop to help us fulfill the contract.

    • We will charge 13% HST when invoicing the Canadian client
    • The Canadian subcontractor:
      • if incorporated (e.g. a company), may charge us 13% HST when invoicing us, which we can reclaim as ITC
      • if unincorporated (e.g. a person), has no GST/HST implications as we will add them to payroll and issue a T4A at the end of the year
    • We are eligible to reclaim the 13% HST of $100 paid to acquire web hosting as ITC
    • We are eligible to reclaim the 13% HST of $1,000 paid to acquire the laptop as ITC

    i. Same scenario, but the client is a non-Canadian company.

    • We will charge no HST when invoicing the client, and mark as zero-rated on the invoice since the service is considered intellectual property exports
    • The Canadian subcontractor may charge us 13% HST when invoicing us, which we can still reclaim as ITC
    • We are still eligible for all ITC claims as above

    ii. Same scenario, but the subcontractor is a non-resident of Canada and the service is rendered outside the country.

    • The international subcontractor, incorporated or unincorporated, will charge us no GST/HST when invoicing us (Hypha can pay the invoice via TransferWise in a supported currency of their preference), there is no ITC claim on the payment
    • We are still eligible for all other ITC claims as above

    iii. Same scenario, but the subcontractor is a non-resident of Canada and the service is rendered inside the country.

  2. Hypha receives a grant from a private company to facilitate a free digital security workshop that is open to public, and spends $100 on materials.

    • HST does not apply, and we do not need to collect or remit GST/HST on the grant amount
    • The $100 materials is not eligible as ITC because the grant is GST/HST exempt (different from zero-rated)

    i. Same scenario, but the workshop has a registration fee collected by the client, and is not open to public.

    • We need to charge 13% HST when invoicing the client, this is no longer a "grant"
    • We are eligible to reclaim the 13% HST of $100 materials as ITC

If none of these scenarios apply to your situation, and you are unsure whether to charge GST/HST on an invoice, or whether an expense is eligible as ITC, please reach out to the Finance WG.

Holding crypto-currency

Hypha may sometimes need to hold cryptocurrencies.

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