ARCHIVED CD 1999-011
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Note This document has been modified. The changes are identified by a vertical line "|". Revision (|)
March 3, 1999 (Revised December 19, 2006)
SUBJECT: The Territory of Nunavut
1.1 The purpose of this directive is to provide information and instructions to Regional Pay System (RPS) clients concerning the new Territory of Nunavut.
1.2 In this text, use of the masculine is generic and applies to both men and women.
2.1 The Nunavut Act, assented to June 10, 1993, established a new Canadian territory to be known as Nunavut. Land formerly part of the Northwest Territories (NWT) will become the new Territory of Nunavut.
3.1 Effective April 1, 1999, Nunavut becomes a new territory of Canada.
3.2. Statutory Deductions
Income tax will be calculated based on the Revenue Canada tax formula for the Northwest Territories until further notice.
Canada Pension Plan contributions remain the same utilizing the criteria applied to all employees of Canada with the exception of the province of Québec.
Employment Insurance premiums remain the same utilizing the criteria applied to all employees of Canada.
3.3. Payroll Tax
| Payroll tax deductions will be levied on employees working in the Territory of Nunavut. The policy and the rate of 1% is identical to that of the Northwest Territories Payroll Tax. The Government of the Northwest Territories will administer the Nunavut Payroll Tax until further notice. The Government of the Northwest Territories has announced that their Payroll Tax will increase to 2% effective January 1, 2005. The Nunavut Payroll Tax will remain at 1%. Effective January 1, 2007, the Nunavut Payroll Tax will be increased from 1% to 2%.
As the Nunavut Payroll Tax is identical to the Northwest Territories Payroll Tax, please refer to Compensation Directive 1993-019 dated November 29, 1993, for the policy and procedures. Two new codes have been created for the Nunavut Payroll Tax and are described in section 4.3 herein.
3.4. Other Deductions and Entitlements
Public Service Health Care Plan
With the creation of the new territory of Nunavut, a change to the reference number of the Public Service Health Care Plan (PSHCP) deduction is required. Details regarding this change are found in section 4.4 of this directive.
There are no policy changes to any other deductions and entitlements.
3.5. T4 Reporting Requirements
Revenue Canada reporting requirements dictates that employment income must be reported according to the province or territory of work. Effective April 1, 1999, all employment income must be reported on a separate T4 as is done with any other province or territory. In other words, any payment dated on or after April 1, 1999, made to an employee in the Territory of Nunavut, will be reported on a separate T4.
4.1 The pay input requirements related to the change to the Territory of Nunavut are described below in this directive. The input to the RPS can be entered by the client starting on March 26, 1999, and should be processed no later than in the update of March 31, 1999. Please note that clients who intend on processing a supplementary payment in the update of March 29, 1999, for an employee who will be working in the Territory of Nunavut as of April 1, 1999, must have the input relative to Nunavut processed in the update of March 29, 1999. This is required because of the fact that cheques processed in the update of March 29, 1999, will be dated April 1, 1999.
To assist our clients with the exercise of identifying the affected employees, pay offices will provide clients with a listing reflecting those employees whose province of work and/or province of residence status is currently the Northwest Territories. For reference purposes, a cross reference listing with the old NWT geographical location codes and the corresponding new Nunavut geographical location codes is included as Appendix A. All geographical location codes for the Territory of Nunavut commence with the number "62".
4.2. Statutory Deductions and Reporting Requirements
- Province of Work
In order to deduct income tax and report the employment income accurately, RPS clients are requested to change the employee's province of work geographical location code. The new geographical location codes (six digits for province of work) have been updated on the Geographical Location Control File.
It should be noted that clients may only change the employee's geographical location code for active employees. Clients should change the geographical location code for Temporary Struck Off Strength (T-SOS) employees upon the employee's return to duty.
Clients are reminded that if future payments are required for Struck Off Strength (SOS) accounts, a Taken On Strength (TOS) pay action followed by the changes to the geographical location code for the province of employment and residence and then an SOS pay action is required. This process will allow the proper statutory deductions and reporting requirements for the Territory of Nunavut.
- Province of Residence
Clients are also requested to change the geolocation code for province of residence to code "62" for any employee who is a resident of the Territory of Nunavut.
4.3. Payroll Tax
Other than the name of the payroll tax being the Nunavut Payroll Tax and the different deduction codes, the procedures are identical to that of the Northwest Territories Payroll Tax. Please refer to Compensation Directive 1993-019 dated November 29, 1993, for the policy and procedures.
Two new codes have been created:
- Code 602 - NUN Payroll Tax
- Code 603 - NUN Payroll Tax-Arrears (AR)
Manual intervention by clients is not required. The RPS will automatically cease the generation of the deduction for the NWT Payroll Tax (code 973) and commence the generation of the NUN Payroll Tax (code 602) for those employees whose province of work geographic location code commences with a "62". Deductions for the NWT Payroll Tax Arrears (code 974) will remain as a deduction from the employee's pay until such time as the arrears collection has been completed.
Separate remittance instructions will be sent to the Payroll Accounting Office (PAO).
4.4. Other Deductions and Entitlements
Public Service Health Care Plan
Effective April 1, 1999, a new PSHCP area code, which is part of the reference number of the PSHCP deduction, will be created. The new PSHCP area of residence code corresponds to the territory code of "62" for Nunavut. The PSHCP code has been identified as code "13" and is the 2nd and 3rd digit of the reference number of all PSHCP deduction codes (the new code will be added in Section 9-5-4 of the Personnel-Pay Input Manual). The following PSHCP deduction codes are affected by this change: 703, 708, 713, 854, 856, 857 and 872.
Departments will be required to identify employees whose area of residence is Nunavut and input the change, as described above, for the RPS updates as described in 4.1. above.
4.5. T4 Reporting Requirements
Manual intervention by clients is not required. The RPS will automatically, as for all other provinces/territories, accumulate and report earnings and deductions based on the province/territory of employment.
5.1 Any request for information regarding the foregoing should be addressed to your Public Works and Government Compensation Services Office.
Original Signed by
Government Operational Service
OLD NWT GEOGRAPHICAL LOCATION AND NEW NUNAVUT GEOGRAPHICAL LOCATION
|PAY ZONES|| LOCATION
|610430||101||201||306||A08||E02||H03||HEALTH DIST E 5-6-8-71-72-73|
|610533||101||201||306||A08||E01||H03||HEALTH DIST E 9-31-32PTS|
|610672||101||201||306||A08||E02||H03||HEALTH DIST E4 PT|
|PAY ZONES|| LOCATION
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