ARCHIVED CD 2007-021
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Note This document has been modified. The changes are identified by a vertical line "|". Revision (|)
November 23, 2007 (Revised December 27, 2007)
SUBJECT: Isolated Posts and Government Housing Directive (IPGHD) - Fixed Rate Vacation Travel Assistance (VTA)
| 1.1 The purpose of this directive is to provide compensation advisors with information concerning the reporting of Vacation Travel Assistance (VTA) payments that are identified under "Part III - Expenses and Leave" of the National Joint Council's (NJC) Isolated Posts and Government Housing Directive (IPGHD).
2.1 This directive supersedes Compensation Directive 2003-006 dated May 30, 2003.
| 3.1 The new 100% Fixed Rate VTA benefit replaces the former two parallel types of VTA. The value of the Fixed Rate VTA is based on the cost of return travel between the isolated post and the point of departure.
3.2 Treasury Board Secretariat (TBS) will publish the amount of the fixed rate VTA once a year for each isolated post with an Environment Allowance (EA) classification of 1, 2 or 3, and twice each year for those isolated posts with an EA classification of 4 or 5. The rates will be in effect until the publication of new rates the following fiscal year.
4.1 On August 1, 2007, the new 100% Fixed Rate VTA was made available to employees under the new IPGHD, upon request. This benefit is not intended to be a reimbursement of expenses incurred or to be incurred. It is rather a value assigned to a benefit for which employees are not required to travel away from their posts or to take a paid leave.
| Travel Assistance Benefits: When an EA is revoked, if the employee affected by the change was entitled to the benefits referred to in Part III of the NJC IPGHD on the date the change was made, those benefits shall end on the first day of the fourth calendar month after the month in which written notice was received.
| Additional information regarding this policy can be found under IPGHD of the NJC IPGHD.
4.2 The 100% Fixed Rate VTA payment is subject to income tax deductions, to the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) contributions, to the Employment Insurance (EI) and Quebec Parental Insurance Plan (QPIP) deductions. However, it is not subject to public service pension plan contributions.
4.3 The Canada Revenue Agency (CRA) has advised us that income tax at source on the Fixed Rate VTA payment may be waived at a rate of 100% if the employee is located in a prescribed northern zone, or at a rate of 50% if the employee is located in a prescribed intermediate zone.
In order to have federal income tax waived at source, employees must agree in writing to use the entire VTA payment for vacation travel in the same calendar year in which the payment is received and in the period in which the employee is living in the prescribed northern or intermediate zones. Employees can submit their requests using the Appendix A form "Request for Waiver of Income Tax Withholding".
The Ministère du Revenu du Québec (MRQ) has advised us that this payment is subject to Quebec income tax at source and that, as such, there is no provision for a waiver of the Quebec income tax.
4.4 These payments will be reported in box 14 of the T4 with a code 32 footnote and in boxes "A" and "K" Of the Relevé 1.
4.5 A list of prescribed northern and intermediate zones within Canada can be found at the following address: t4039
A list of prescribed northern and intermediate zones within the province of Quebec can be found at the following address: Revenu Québec
Employees seeking additional information concerning deductions upon filing their income tax return may refer to the following links:
5.1 As of August 1, 2007, compensation advisors must process the Fixed Rate VTA payment using entitlement code 282, "Vacation Travel Assistance (VTA) Payment". In situations where income tax on VTA payments will be waived, either in whole or in part, compensation advisors should process entitlement code 282 together with entitlement code 395, "Special Tax Exemption (federal)". This will ensure that these two pay transactions are part of the same supplementary update.
Compensation advisors must process the VTA payments using the "Entitlement Commence" (ENC - PAC 18C) or the "Entitlement Adjustment" (EAJ - PAC 71) transaction. To process the tax waiver, compensation advisors must use the "Entitlement Adjustment" (EAJ - PAC 71) transaction.
5.2 Please note that employees located in Gaspé (including Rivière-au-Renard), Chandler, and Grande-Rivière, will retain the entitlement to the VTA benefit for themselves and for their dependants, only for any year for which an EA amount is payable.
5.3 TBS has instructed that for this year only, employees (and their dependants) who have already requested the 80% non accountable VTA between April 1 and August 1, 2007, and who have received an amount that is lesser than the amount published by the TBS on August 1, 2007, shall be reimbursed the difference.
Compensation advisors must action the reimbursement for each affected employee by December 31, 2007.
5.4 In order to process this payment, compensation advisors will be provided with an authorizing document either from the employee's manager or the finance section. Compensation advisors will also be provided with a tax waiver document by the employee, if applicable. These documents will indicate the VTA payment amount and the specific amount of the payment for which federal income tax should be waived in accordance with the tax policy.
| 5.5 Compensation advisors are responsible for adding 6% GST and applicable provincial or territorial taxes to the fare portion of the VTA payments and for reporting the total lump sum amount under entitlement code 282 in the Regional Pay System (RPS).
5.6 Part-time and seasonal employees are entitled to the VTA benefit, prorated to their scheduled work week. Compensation advisors must enter the prorated amount when processing their payment through the RPS as it will not be adjusted automatically.
6.1 Any inquiries on the information contained in this directive should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.
Original Signed by
Accounting, Banking and Compensation
Reference(s): CJA 9010-2, ENT codes 282 and 395
Fixed Rate Vacation Travel Assistance
Request for Waiver of Income Tax Withholding
|Family Name:||Given Name:|
This request is conditional on the following:
- The employee must have lived, on a permanent basis, in the prescribed northern or intermediate zone for at least six consecutive months of the calendar year at which time the payment has been made, or it must be reasonable for the employer to expect that the employee will be living in either of these zones for at least six consecutive months of that same calendar year.
- This payment must be fully used for vacation travel in the same calendar year in which it was received by the employee, and in the period in which he/she lived in the prescribed northern or intermediate zone.
- By checking this box, I hereby certify my compliance with the above described conditions.
Fixed Rate Vacation Travel Assistance
Please check the box for the appropriate statement below and indicate the name of the exact prescribed zone:
- As an employee located in a prescribed northern zone, I hereby request my employer to waive at source income tax on 100% of the Vacation Travel Assistance payment granted in accordance with Canada Revenue Agency (CRA) regulations.
Enter the prescribed northern zone:
- As an employee located in a prescribed intermediate zone, I hereby request my employer to waive at source income tax on 50% of the Vacation Travel Assistance payment granted in accordance with Canada Revenue Agency (CRA) regulations.
Enter the prescribed intermediate zone:
- Date modified: