University of Saskatchewan

Financial Services (FS)

May 16, 2012

About Pennies: "A nickel for your thoughts?"

Canada getting rid of the penny—does that make “cents”? Apparently, yes. Each penny costs 1.6 cents to produce, according to the federal government.

Love ’em or hate ’em, pennies are a cause for conversation and lately, quite a few questions. Here is a little “q&a” on pennies related to finances at the U of S:

Q: When will we stop accepting them as a method of payment?
A: Pennies are a valid form of currency “forever” or until they are all out of circulation. However, university business units decide which forms of currency they accept; FSD recommends accepting pennies at least until fall 2012, which is when banks will stop supplying them.

Q: Are there system implications?
A: No. The base pricing unit in Canada will continue to be one cent. Non-cash sales (credit card, debit, cheques) can be made on this basis.

Q: Are there sales tax implications?
A: No.

Q: In setting prices for goods & services, do all prices have to end in $.05 increments after taxes? 
A: No

Q: What if tax rates change? Do we have to change our selling prices every time?  
A: No

Cash sales – rounding down or up

The federal government recommends that for total, after-all-taxes-and-fees cash amounts, round to the nearest five cents.

When rounding cash sales, record it to Cash Overage and Shortage in account code 70604. For example, for $1.02 cash, charge customer $1.00 and record $.02 shortage to account code 70604.

So, for amounts ending in $.01, $.02, $.06 and $.07, round down, and for those ending in $.03, $.04, $.08 and $.09, round up (note: “0” in each can be any digit 0-9).

Units that only accept cash can:

More information: