Canadian small business owners are losing the equivalent of 31 working days a year to stress, according to a new report released by Xero.
The company’s Emotional Tax Return report found owners spend an average of nine hours a week feeling stressed, concerned or worried about their business, with financial management cited as a key pressure point.
The findings point to what the company describes as an “Emotional Tax” — the personal and business toll associated with running a small enterprise. More than three-quarters of respondents, or 77 per cent, said financial management causes stress, and 39 per cent said they have considered giving up their businesses entirely.
Personal toll of the “Emotional Tax”
The report outlines several personal impacts tied to business-related stress.
More than half of small business owners, 52 per cent, said they get less sleep since starting their business, with 23 per cent reporting they lose five or more hours of sleep a night.
Stress has also led owners to scale back personal activities. About 32 per cent reported giving up exercise, 30 per cent reduced travel and 26 per cent spent less quality time with their partners. Some respondents said they miss family dinners (15 per cent), birthday parties (12 per cent) and weddings (7 per cent).
Forty per cent said they have kept business stress from their family or partner, while 36 per cent reported being more short-tempered with others when stressed.
Business consequences
Beyond the personal impact, the report links stress to operational challenges.
One-third of respondents, 33 per cent, reported slower decision-making as a result of stress. Others cited missed opportunities (29 per cent), slower business growth (22 per cent) and avoidable mistakes (21 per cent), including financial errors.
“The Emotional Tax small business owners pay clearly takes a heavy personal toll, and when it consumes nearly a month of productivity, it also becomes a bottom-line crisis. Unfortunately, too many owners are trying to navigate this pressure in isolation,” said Ashalee Mohamed, Head of Canada GTM at Xero.
“Leaning into digital tools and trusted advisors is the key to closing this gap, protecting business health and reclaiming their quality of life. By reducing business admin, enabling accounting automation and streamlining collaboration with advisors, Xero can help small business owners improve confidence in financial accuracy and reclaim the emotional tax.”
The advisor gap
The report suggests external factors such as rising costs, unpredictable demand and geopolitical uncertainty have added to pressures on business owners. Ninety per cent of respondents said they are concerned about the upcoming fiscal year.
While 77 per cent identified financial management as a source of stress, only 10 per cent said they seek advice from an advisor when they feel pressure.
The data also indicates that 53 per cent of owners have been surprised by a tax outcome. At the same time, stress appears to contribute to delays in financial management tasks. Eleven per cent of respondents said they would prefer to go to the dentist for a root canal than tackle their taxes.
Chasing paperwork was cited as a source of stress by 34 per cent of respondents, while 28 per cent pointed to fear of making a mistake. Nearly 29 per cent reported procrastinating on financial management tasks due to stress.
Despite the findings, 92 per cent of small business owners said they are taking steps to manage stress. More than half, 52 per cent, turn to self-care, while 44 per cent exercise and 41 per cent spend time with friends and family.
Xero is a global small business platform providing accounting, payroll and payments tools to small businesses and their advisors.
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