Public Works and Government Services Canada
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SAM 2-7-1

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Section : SALARY

Subsection : RATE OF SALARY FOR CONTRIBUTION PURPOSES

BACKGROUND

It is necessary to determine the rate of salary for the following purposes:

  1. calculation of contributions to be paid on current service;
  2. exclusion from becoming a plan member of an employee in receipt of a salary computed at an annual rate of less than $900 (this information is also described in SAM 2-4-2 of the Superannuation Administration Manual [SAM] under exceptions).

DEFINITION

Salary

"Salary", as applied to the public service, is defined as the basic pay received by a person for the performance of the regular duties of a position or office. It does not include certain allowances, special remuneration, overtime or other compensation as a gratuity, unless that amount is deemed to be or to have been included in that person's basic pay pursuant to any regulation made under paragraph 42(1)(e) of the Public Service Superannuation Act (PSSA).

Annualizing Salaries

When annualizing an hourly salary rate, the following formula must be used:

  • Multiply the hourly rate by 1956.6,
  • then
  • multiply the total number of hours by the hourly rate

Example 1

  • Hourly salary rate: $11.40
  • Standard Work Week (SWW): 37.5 hours
  • 1,140 x 1,956.6 = 22,305.24
  • When annualizing a daily salary rate, the following formula must be used:
    • Multiply the number of days in the SWW by 260.88 plus 1 day
    • then
    • multiply the total number of days by the daily rate.

Example 2

  • Daily salary rate: $112.50
  • 112.50 x 260.88 = 29,349.00
  • When annualizing a weekly salary rate, the following formula must be used:
    • Multiply the weekly rate by 52.176

Example 3

  • Weekly salary rate: $562.50
  • $562.50 X 52.176 = $29,349.00
  • When annualizing a monthly salary rate, the following formula must be used:
    • Multiply the monthly rate by 12.

Example 4

  • Monthly salary rate: $2,436.00
  • $2,436.00 X 13.044 = $31,775.18

NOTE 1

Employees in many positions receive allowances, perquisites and/or extra pay which may or may not form part of the salary for PSSA purposes. Treasury Board (TB) guidelines specify that allowances paid for added duties and responsibilities, or allowances for meals and quarters and other such domestic perquisites, are considered as "salary" for purposes of the PSSA.

On the other hand, payments authorized on account of living conditions and other circumstances not relating to duties or responsibilities (e.g. lump sum payments authorized for employees in holding ranges, isolation or cost of living allowances, etc.) are not considered as "salary" for the purposes of the PSSA.

Appendices V through VIII (SAM 2-8-5, SAM 2-8-6, SAM 2-8-7 and SAM 2-8-8) contain lists of allowances, perquisites and special payments for which a decision has been made in accordance with these guidelines. Any future additions or deletions will be made as required.

NOTE 2

The payment of the bilingual bonus is dependent on whether the authorized recipient has or will have received ten days of salary in a particular month. However, in cases of a death in service, the ten-day requirement is waived and the allowance is paid for that month. Should the employee terminate for any other reason and has not met the ten-day requirement, the allowance will not be included when determining the amount of Supplementary Death Benefit (SDB) coverage, nor will it be included in the calculation of salary for that period of pensionable service.

Although the allowance is included in the bi-weekly pay, should a recipient not receive full salary for a particular month, but have met the ten-day requirement, the allowance is payable for the full month, and superannuation contributions should be based on the full amount paid.

When an employee is on leave without pay (LWOP), and was entitled to such an allowance immediately prior to the leave, the allowance must be included when considering the deemed salaries to be used for superannuation purposes.

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REFERENCE

Public Service Superannuation Act, subsection 3(1).

Last Update: November 2011