On February 4, 2013 you won’t see stores, gas stations, coffee shops and restaurants giving out pennies anymore ~ why you ask? “They are worth almost nothing, they are cumbersome and they cost the government at least $130-million per year to keep in circulation”. (National Post, March 2012).
Will I seem old-fashioned if I say “penny for your thoughts,” “penny-pincher” or “a penny saved is a penny earned”?
Do you know why your car’s control panel is called a dashboard? It refers to a board mounted at the front of horse-drawn carriages to prevent mud from the horse’s hooves from being “dashed” at the driver. Your penny references remain contemporary.
How will YOU be affected ….
As pennies exit circulation, only cash payments will need to be rounded, either up or down, to the nearest five-cent increment.
The Government of Canada will be adopting a rounding guideline that has been used successfully by other countries for its cash transactions with the public.
Under this guideline, when pennies are not available, cash transactions will be rounded in a fair and transparent manner, as illustrated below:
- Amounts ending in 1 cent and 2 cents are rounded down to the nearest 10 cents;
- Amounts ending in 3 cents and 4 cents are rounded up to the nearest 5 cents;
- Amounts ending in 6 cents and 7 cents are rounded down to the nearest 5 cents;
- Amounts ending in 8 cents and 9 cents are rounded up to the nearest 10 cents;
- Amounts ending in 0 cent and 5 cents remain unchanged.
When To Round
Again, only cash transactions require rounding. Cheques and transactions using electronic payments—debit, credit and payments cards—do not need to be rounded, because they can be settled electronically to the exact amount.
For any cash payment, only the final amount (or equivalently, the change owed) should be subject to rounding. Individual items, as well as any duties, fees or taxes, should be tabulated in their exact amount prior to rounding, as illustrated:
*A tax rate of 5 per cent has been provided for the purposes of illustration. Any taxes (e.g., the Goods and Services Tax/Harmonized Sales Tax), as well as any fees or duties, should be tabulated prior to rounding
Can you still PAY with Pennies?
Well .. it is still to be seen … a note I read on the Revenue’s page said “pennies can still be used in cash transactions indefinitely with businesses that choose to accept them.” So maybe time to start rolling… make sure you save a few 2012 pennies as those were the last to be produced!
This post is adapted all from the Canada Revenue Website for the sole purpose of education to my friends and fans of abouponers.com. You can read a lot more here from their site