Thursday, 15 May 2014

Territory Payroll Tax

As a result of the Payroll Tax Act (1993), individuals working in either the Northwest Territories or Nunavut are required to pay the respective territory’s 2% Payroll Tax. The payroll tax must be deducted from the employee at the time of payment.
The payroll tax applies to all employees (staff, students, postdoctoral fellows) that work, perform duties, or provide services in the Northwest Territories and Nunavut. This tax applies regardless of the employee’s or employer’s province or territory of residence.

Departments/Faculties have the following responsibility during this process:

  1. Notify your Employment and Pay Advisor of the Name & Person ID and time period of work for all employees who will be performing work in either territory.
  2. Notify the employee/student that the payroll tax will be deducted from their pay.

Important Note: If at tax reporting time Payroll Operations determines that insufficient payroll tax was deducted for an employee, the department speed code that was charged for payment to the employee will be charged for the shortfall. If there was an over deduction of payroll tax, the employee will be refunded.

Please contact your Employment and Pay Advisor if you have any questions.