Tax and repayment information for employees
Learn how to repay overpayments and salary advances and how these may affect your taxes
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Outstanding salary payments owed to employees
If the Public Service Pay Centre was unable to pay you any outstanding amount owing by the end of 2016, the amount will be reported on your 2017 tax slips. This is in line with income tax regulations.
If a payment in 2017 affects your taxes or eligibility for government benefits, you may ssubmit a claim under the new Phoenix claims process. Each claim will be considered on its individual merits and settled based on valid receipts and other supporting documentation.
Overpayments caused by administrative errors
If you were overpaid by error in 2016 and the overpayment was recorded in Phoenix before the end of 2016, the overpayment will not show on your 2016 tax slips, whether you have repaid the full amount or not.
You should receive a letter from the Public Service Pay Centre confirming that the overpayment was recorded in Phoenix, along with recovery details.
If you are not receiving pay services from the Public Service Pay Centre, contact your department directly for information.
Overpayments received in 2016 and discovered later
There will be tax implications if you received an overpayment in 2016 but discovered it in a subsequent year. Since there was no opportunity in 2016 to make the remittance adjustments, you will need to repay the gross amount of the salary overpayment as opposed to the net (gross pay less source deductions).
Once you have repaid the amount or made arrangements to repay the amount, your 2016 tax slip will be adjusted to remove the overpayment and will reflect the correct annual earnings. Any source deductions associated with the overpayment will be reported on the amended slip and will be taken into account when your annual income tax return is reassessed.
Emergency salary advances or priority payments
These two types of payments are not considered salary overpayments. If you have received either type of advance, the money will be recovered only after you have started receiving your regular salary and received the full amount you are owed. The recovery period, in most but not all cases, will extend over the same length of time as you received your advances.
If you received one or multiple emergency salary advances or priority payments, but you started receiving your regular pay in 2016, your 2016 tax slips will not include these payments, whether you have repaid the full amount owed or not. To find out about exceptions, visit:
Repay salary overpayments
Are you an active or former public service employee being overpaid? Were you previously overpaid? Learn how you to begin the process of repaying salary overpayments to minimize future tax implications.
Who must repay
If you are receiving or have received a salary overpayment, you are required to repay these funds.
Emergency salary advances and priority payments are not salary overpayments.
Employees on leave without pay
If you’re on long-term leave without pay and want to verify if an overpayment is recorded in Phoenix or would like to arrange repayment before your return to work, you must contact the call centre at 1‑855‑686‑4729.
If the Public Service Pay Centre does not serve your department, contact your compensation advisor about the repayment process.
If you do not make repayment arrangements, recovery will begin once you have returned to work.
When you must repay
If you are an active employee or an employee on leave without pay, the Public Service Pay Centre will begin recovering salary overpayments from you only after:
- all owing salary and allowance payments are paid
- regular salary payments are re-established
How to repay
Consult the repayment process for:
Active employees or employees on leave without pay
Refer to your pay stub. The pay rate amount is your gross biweekly pay. If the amount you are or were overpaid is:
- less than 10% of your gross biweekly pay, the pay centre will automatically recover the overpayment in one lump sum from your next regular pay
- 10% or more of your gross biweekly pay, consult the four options provided below
If you do not contact the call centre and select an option, the pay centre will mail you a letter outlining the default repayment option as well as the alternative repayment options.
If you do not respond to the pay centre’s letter, you will receive a second letter. You must indicate your chosen option within six weeks of the first letter’s date. If you still do not respond, the default repayment option (option 1: recovery in four equal installments through payroll deduction) will apply.
You can repay salary overpayments in one of four ways:
Option 1: Recovery in four equal installments through payroll deduction
The Public Service Pay Centre recovers the overpayment over four regular pay periods. This will be the default process when no other repayment option has been selected or after all recovery attempts have failed.
Option 2: Lump sum recovery through payroll deduction
The pay centre recovers the overpayment to the fullest extent possible from your next regular pay.
Option 3: Lump sum recovery by cheque
You mail a cheque for the full amount to the pay centre. Find out how to mail your repayment by cheque.
Option 4: Recovery in four equal installments by post-dated cheques
You mail post-dated cheques to the pay centre. Find out how to mail your repayment by cheque.
If the above options will impose financial hardship, you may request a different repayment arrangement over an extended period. This arrangement must comply with the Treasury Board Directive on Terms and Conditions of Employment, section A.3.15 “Recovery of amount due to the Crown.” Please contact the pay centre or your department for instructions and options.
If you have retired or been terminated from the public service, you must repay any overpayments you have received from the Public Service Pay Centre.
You can repay any overpayments in one of three ways:
Option 1: Lump sum recovery by cheque
You mail a cheque for the full amount to the Public Service Pay Centre. Find out how to mail your repayment by cheque.
Option 2: Recovery in four installments by post-dated cheque
Find out how to mail your repayment by cheque.
Option 3: Deduction
This option is available if you are receiving a monthly public service pension. The pension centre recovers the overpayment over several monthly payments. To arrange this option, contact the pay centre
Mail your repayment by cheque
If you choose to repay your overpayment in a lump sum with a cheque or with post-dated cheques, you must mail the following to the pay centre:
- a completed pay action request form
- your cheque or post-dated cheques
In sections 2 (work type) and 3 (sub type) of the pay action request form, select "recovery of overpayments."
The repayment will be recorded in Phoenix as soon as the cheque is processed.
Make the cheque out to the Receiver General for Canada, and mail it along with the pay action request form to:
Public Service Pay Centre Mail Facility
PO Box 6500
Matane QC G4W 0H6
- Revenu Canada: Questions and answers: Tax implications of Phoenix payroll issues - Important information from the Canada Revenue Agency
- Revenu Québec: General Information - Individuals
Telephone number: 1‑800‑267‑6299
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