Budgeting for Taxes

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This is one of the most important sections of financing, because EUS groups do not handle taxes the way you do as an individual. It is imperative that you understand this section before making your budget. If you’re confused, please contact the VP Finance or Budget Director and they will be able to clear things up.

Revenues and Expenses


You’re collecting money for your department’s clothing sale. You get the invoice for pre-tax amount of $1,000. Since the EUS budgets everything pre-tax, $1,000 will be the amount the department is charged. The first inclination would be for the department to collect $1,000 to break-even on the clothing sale. So the VP Finance collects $1,000 and deposits it.
The $1,000 deposited includes sales tax. Since the EUS remits all sales tax to the government, a value of 14.975% (5% GST + 9.975% QST) is deducted from all Revenues. So $43.49 is taken off and put into the GST tax account and $86.76 is taken off and put into the QST tax account, for a total of $130.25 being remitted. What’s left is the pre-tax amount of $869.75 to be deposited into your EUS account. The department just lost $130.25 because they budgeted their taxes wrong on the collected revenue.


In order for the department to break-even, it would have needed to collect 14.975% more. Therefore, the VP Finance should have collected $1,149.75 because a GST amount of $50 and QST amount of $99.75 would be taken off the deposit and a total of $1,000 would be left to break-even.

The message here is to always budget pre-tax for both revenues and expenses. This is not because the government is necessarily giving the tax back to the EUS, but because we must track tax separately in a tax account, since we need to remit money to the government if we collected more sales tax than we spent. So in effect we are subsidizing all our groups for the sake of making accounting easier.

50% Tax Rule

In the case where a group is providing free food and entertainment (restaurants, hotels, beer, pizza, etc.), there is an exception to the aforementioned pre-tax rule. In these cases, 50% of the total tax amount will be charged as well. You still fill out the cheque req normally, with the pre-tax amount written, but the amount you will see in your accounts will be the average between the pre- and post-tax amounts.
The very important distinction is that this is only for FREE food or entertainment. In other words, it only applies to completely free events, where your group is likely subsidizing using funds which did not need to have tax remitted on them (such as student fees).

If there was a fee for your event that involved food and entertainment (such as a banquet), you should indicate on the cheque req that tickets were sold or that the participants somehow paid a fee for the event. For example, if students paid fees to participate in MEC, then food served during the event would be charged all pre-tax. You just need to indicate that there was a fee associated to the expense, and our bookkeeper will charge you the pre-tax amount. This is why Blues Pub beer, banquets, and most big events don’t need to worry about the 50% rule.

Revenues to offset expenses incurred internationally

This exception is generally most important for design teams, but other groups operating internationally will also be affected. If team members are paying fees to offset expenses for a trip outside of Canada, you do not need to budget for losing the sales tax from those fees. If you did, then it would have been cheaper to receive cash from those students and spend it directly in the US, where you have to budget post-tax since EUS cannot claim US sales tax back. Therefore, when you are depositing funds that are specifically to offset expenses incurred from US purchases, then you should clearly indicate on the deposit slip, “To offset expenses in USA – do not remit sales tax”.

Out of Province

Expenses made out of province are charged at the total price of their purchase, as we cannot claim sales tax from outside of Quebec, except for GST where GST is listed separately on the receipt. Also, if you do not submit a proper receipt with GST and HST sales tax numbers, we will charge the total amount to your account, and you may only find out about it when you look at the EUS accounts (with the volume of transactions handled by the EUS, it is impossible to chase people down for every mishandled receipt).

Sponsorship and Monetary Donations

Revenues that fall under the category of a “donation” are exempt from sales tax too. So funding from the EUS, MESC, the departments, SSMU, and some sponsors are not taxed. Whether sponsorship is taxed is sometimes hard to determine, and you should always ask the VP Finance if you are not sure. He or she may need to talk to the auditor or look at other resources to figure it out. The following guidelines are useful though:

  • Any service being rendered to the sponsor (e.g. ticket booth; space for them to solicit patrons, whether it's directly for sales or not; luncheons/ conferences/ presentations). Essentially, anything that gives the sponsor face time.
  • Advertisements in regular publications (Ledger, Faucet, Yearbook, Handbook, Pipeline, Station; NOT the O-Week handbook, MEC competitors package, etc)


  • Logos on most anything
  • In-kind donations (like food or supplies)