How public service pay works
As a government employee, learn when and how you get paid, and explore the various scenarios that may result in changes to your pay.
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When you get paid
As an employee, you receive payment in arrears. This means you get paid for the weeks you have already worked.
Payday is every second Wednesday. Your pay is for work completed up to and including the end of the day 2 Wednesdays before. This means that you get paid for 10 days, from Thursday to Wednesday, for work that concluded 2 weeks previously.
When you get paid More information
Calculating your gross pay
To determine your gross bi-weekly pay (before deductions), divide your annual salary by 26.088.
Example: If your annual salary is $50,000, your gross pay is $50,000 ÷ 26.088 = $1,916.59 per pay
To determine your hourly gross rate of pay, divide your annual salary by 52.176 to obtain the weekly rate, and then by the number of hours in your standard work week.
Example: If your annual salary is $50,000 and you work 37.5 hours a week, your pre-tax rate of pay is $50,000 ÷ 52.176 ÷ 37.5 = $25.55 per hour
How you get paid
The government uses direct deposit to electronically transfer your pay to your bank account. Using direct deposit is a condition of employment. Exceptions may be made only if there is a specific reason why you can’t use direct deposit.
You may modify your banking information through the employee self-serve option in Phoenix. If you are unable to modify your direct deposit information in Phoenix, you may complete and send the direct deposit enrolment request form, along with a void cheque, to the Pay Centre. If your organization isn’t served by the Pay Centre, contact your compensation team.
It is important that you keep your current bank account active until you can confirm that your pay is being deposited into your new account.
- Direct deposit
- Direct deposit enrolment request form (accessible only on the Government of Canada network)
- Departments and agencies served by the Pay Centre
If your cheque has been lost or stolen, we can replace it. Before we do so, You must submit these 2 forms:
- undertaking and indemnity (accessible only on the Government of Canada network )
- affidavit (accessible only on the Government of Canada network)
You must submit these two forms to your departmental compensation advisor or with a pay action request form if the Pay Centre serves your organization.
The method of calculating income tax at source is very effective. Unless you have other issues that affect your income tax situation, such as income from another source, the amount of income tax deducted will closely relate to the amount of income received during the tax year.
The amounts reported on your tax slips (T4 slip or Relevé 1) include the sum of your gross earnings for the calendar year and the deductions taken at source from those earnings. If you earned any taxable benefits from employment during the year, the value of these benefits also appears on your tax slips. Your tax slips will reflect regular and supplementary payments you received during the year, including:
- retroactive revision
- retroactive promotion
- pay out of annual or extra duty leave
- an award
- extra duty (overtime)
Tax slips More information
Changes in your pay
- Change in net pay
- Income tax
- Pay increment
- Salary revision
- Salary protection
- Statutory set-off
- Overpayment recovery
Change in net pay
A change to your net pay may occur for many reasons. Each personal income situation is unique. Some of the factors to consider are:
- changes to your province of work or residence
- changes to salary
- source deductions
- taxable allowances and benefits
- personal tax credits
- hardship or other exemptions
- leave without pay
- overpayment recoveries
Personal income tax
Your tax deductions at source are based on your province of work and the income tax rates in effect at the time of the payment. If provincial or federal tax rates change, you may notice a change to your net pay.
Public Service Pension Plan contributions
At the beginning of each year, the lower rate of the 2 possible contribution rates to the Public Service Pension Plan applies until you reach the maximum contribution level for that rate. As a result, the higher contribution rate applies for the remainder of the year. If you, as a contributor under the Public Service Pension Plan, compare your last pay in December to your first pay in January, you may notice that you paid a greater amount to the plan in December.
Contributions to the Public Service Pension Plan have a direct bearing on the income tax deducted at source. These contributions are deducted from your gross pay before determining the tax rate. The larger the Public Service Pension Plan contribution, the lesser the amount of income tax withheld from your pay.
Upon completing 35 years of pensionable service, your contribution rate falls to 1%. In addition, the Public Service Pension Plan contributions continue until the end of the calendar year in which you reach age 71. As mentioned above, as soon as your contributions to the Public Service Pension Plan fall, your income tax deduction will increase.
Canada Pension Plan (CPP) and Québec Pension Plan (QPP) contributions
Each calendar year, CPP/QPP contributions must be deducted from earnings until a maximum level is achieved. Depending on your earnings, you may reach the maximum level of CPP and QPP contributions sometime during the year. If or when this happens, you will notice that CPP/QPP deductions are no longer being withheld. At the start of a new calendar year, CPP/QPP deductions will begin again.
Contributions to CPP end at age 70 even if you have not stopped working. As a result, your net pay will increase at that time. Meanwhile, if you work in Quebec, you must continue contributing to the QPP even after aged 70, until the QPP maximum contribution is reached for each year.
Canada Pension Plan and Québec Pension Plan contributions More information
Employment insurance (EI) premiums
Each calendar year, EI premiums must be deducted from earnings until a maximum level is achieved. Depending on your earnings, you may reach the maximum EI premiums required sometime during the year. When this happens, you will notice an increase in your net pay because the EI premiums are no longer being withheld. At the start of a new calendar year, EI deductions will resume and continue until you pay the maximum EI premiums for that year.
Employment insurance premiums More information
Québec Parental Insurance Plan (QPIP)
Each calendar year, QPIP premiums must be deducted from earnings until a maximum level is achieved. Depending on your earnings, you may reach the maximum QPIP premiums required sometime during the year. When this happens, you will notice an increase in your net pay because the QPIP premiums are no longer being withheld. At the start of a new calendar year, QPIP deductions will resume and continue until you pay the maximum QPIP premiums for that year.
Québec Parental Insurance Plan More information
Disability Insurance Plan or Long-Term Disability Insurance Plan
Disability Insurance or Long-Term Disability Insurance Plan contributions will end the month following your 64 years and 9 months, as coverage continues only until the age of 65. This will affect your net pay.
Disability Insurance Plan or Long-Term Disability Insurance Plan More information
Income tax is withheld from your earnings in accordance with federal, provincial and territorial income tax regulations. The following information may address some of your questions on the topic.
Province used to calculate income tax
Income tax is calculated based on the province where you report to work.
Working in one province and residing in another
If you are an employee who works in a province other than the one in which you reside, you may owe income tax upon filing your income tax return. If you think this may be your situation, you have the option of having additional income tax deducted at source.
If the Pay Centre serves your organization and you wish to initiate an additional income tax deduction, you must send it a pay action request form along with either a completed:
- TD1 personal tax credits return form if you reside in a province or territory outside of Quebec
- TP-1015.3-V source deductions return form if you reside in Quebec
Working in one province and residing in another Related information
How federal and provincial income tax deductions appear on your pay stub
If your province of work is other than Quebec, you will notice only one income tax deduction on your pay stub (Quebec income tax, or QIT). If your province of work is Quebec, you will notice both provincial and federal (Canada income tax, or CIT) deductions on your pay stub.
In all provinces except Quebec, federal and provincial income tax appear as a single deduction on your pay stub. To confirm that you are paying the correct amount of income tax, consult the provincial and territorial tax tables established by Canada Revenue Agency.
How to request a reduction of income tax be withheld at source
Under certain circumstances, you may request a reduction in the amount of income tax to be withheld from your pay by your employer. You may apply in writing to the District Taxation Office at Canada Revenue Agency or to Revenue Quebec, providing details of your situation. If approved, you will receive a “letter of authority” to this effect.
If Public Service Pay Centre serves your organization, send it a copy of this letter, along with a pay action request form, to ensure that it makes the appropriate adjustments to the income taxes withheld from your salary.
If you work in Quebec and live in Ontario, New Brunswick or Nova Scotia, you may ask to have the Cross Province indicator activated in Phoenix. Once this is done, you will pay provincial income tax according to the applicable rates for your province of residence rather than the higher Quebec rates. In all other circumstances, you need to obtain a letter of authority from your tax services office.
Conversely, if you live in one province but report to a place of business in another, you may not have enough tax deducted. If this is the case, you may “request more tax deductions” by completing the federal TD1 form and sending it to compensation.
How to request that income tax be withheld at a reduced rate Related information
Withholding less income tax from one year to the next
The letter of authority from Canada Revenue Agency or Revenue Quebec provides particulars as to the exemption amount and the period that the authority covers. If this period expires or the exemption amount changes, you must reapply for a reduction to the income tax withheld at a reduced rate.
How to request that additional income tax be withheld
If you wish to have additional federal income tax withheld from your earnings, and the Public Service Pay Centre serves your organization, complete and submit the following forms to it:
- TD1 Personal tax credits return, indicating the additional amount you want to have deducted
- Pay action request form
If the Pay Centre serves your organization, you are a resident of Quebec, and you wish to have a specific amount of additional Quebec income tax deducted at source, complete and submit the following forms to the Pay Centre:
How to request that income tax be withheld at a higher rate Related information
Withholding additional income tax from one year to the next
Your request to have additional income tax withheld will continue to apply until such time as you decide to change the amount and complete a new TD1 Personal tax credits return to change your federal income tax or TP-1015.3-V source deductions return to change your Quebec income tax deduction.
How taxes apply to income earned in one year but paid in another
Earnings you receive are taxable in the year in which you are paid.
Tax exemptions and income tax
If your estimated total annual income is less than your total claim amount, complete the "Total income less than total claim" amount on the reverse side of the TD1 Personal tax credits return.
If your organization is served by the Pay Centre, forward to it the return, along with a pay action request form.
Tax exemptions and income tax Related information
The following information might help you understand your options and responsibilities when a pay increment changes your basic pay.
Understanding pay increments
A pay increment increases your pay rate to the next highest horizontal pay rate on the pay scale. A pay increment period is set out in your collective agreement. If your collective agreement does not specify a period of time, the pay increment period defaults to 12 months.
Promotions and your pay increment date
A new pay increment date will be set as per your collective agreement or terms and conditions of employment. The new pay increment date will correspond with the date of your promotion.
Deployment (transfer) to a new position and your pay increment date
Generally, upon deployment to a new position that has the same increment period as the former position, the pay increment date will remain the same. The date will, however, change if you are a seasonal employee or are appointed to a position with a different increment period (that is, the increment period is shorter or longer).
Pay increments at the acting level
While acting in a position you will continue to receive pay increments at your substantive (basic) level. You may also be entitled to receive a pay increment at the acting level. This will depend on where your substantive position lies on the rate scale.
Pay increments and salary revisions at your substantive (basic) level while you are acting
If you receive a pay increment or a salary revision at your substantive level, your acting pay rate will be recalculated and adjusted accordingly. If the recalculated rate is less than your existing acting pay, you will continue to receive the higher rate.
How the Pay Centre treats a pay increment and a revision due the same date
When a pay increment and a pay revision are effective on the same date, the pay increment will apply first, followed by the pay revision.
How the Pay Centre treats a pay increment and a revision due the same date Related information
How the Pay Centre knows when your pay increment is due
The system is automated to apply pay increments when they are due in accordance to the collective agreements.
How the Pay Centre knows when your pay increment is due Related information
How you will be notified about a pay increment rejection
Your manager or the individual with delegated authority will notify you at least two weeks, but not more than six weeks, before the due date if your pay increment is going to be denied.
Pay increment dates following a denial
If your pay increment was denied, you will be eligible for a pay increment on the date that the next increment would become due. Your manager or the individual with delegated authority may request payment of the increment on the first day of any month before that date.
How leave without pay changes your pay increment date
Collective agreements and terms and conditions of employment found in the relevant authorities provide for various types of leave without pay. Consult the appropriate terms governing your specific type of leave to determine how your absence may affect your pay increment date.
How your new pay increment date is set if you receive a promotion within one year of lay-off
A new pay increment date will be set as per your collective agreement or terms and conditions of employment. The increment date will align with the date of your promotion.
How your new pay increment date is set if you are deployed (transferred) within one year of lay-off
If you are appointed within one year of a lay-off, the period between the last pay increment date and the lay-off date is used to determine the new pay increment date.
The following information may help you understand your options and responsibilities when a salary revision results in a change to your basic pay. The pay administration section of your collective agreement provides valuable information about salary revisions for your group.
A revision is a vertical change in the pay rate that applies to a specific group. It is an amount equal to what would have been paid had the rate been in effect on the effective date.
Retroactive revision period
A retroactive revision covers the period from the effective date of the revision up to and including the day before the collective agreement is signed or when an arbitral award is rendered.
Revising the pay rates of a public service group whose rates of pay have expired
Your new rate of pay will be in the salary row immediately below the row which shows the rate of pay you were receiving prior to the revision. Refer to the pay administration section of your collective agreement.
Employees who are entitled to a retroactive revision
Employees, former employees, or in the case of death, the estates of former employees who were employed during the retroactive period, are all entitled to a retroactive revision. Refer to the pay administration section of your collective agreement.
Recalculation of your pay if your were promoted, demoted, deployed (transferred) or was in an acting situation during a retroactive period
We will recalculate your rate of pay using the revised rates of pay for promotions, demotions deployments (transfers) or acting situations that were effective during the retroactive period. Refer to the pay administration section of your collective agreement.
What happens to your pay rate if, after a recalculation, your rate of pay is less than before
With the exception of a change in employment involving a lower pay rate, your pay rate will remain higher than the recalculated rate. It will be set at the rate closest to, and not less than, your previous pay rate. Refer to the pay administration section of your collective agreement. If you change jobs and switch categories, you will only be paid up to the maximum offered in the new category.
Notifying the underwriters of disability insurance, long-term disability insurance or workers compensation programs in case of a retroactive adjustment
The Pay Centre will notify the underwriters of these programs.
Notifying the underwriters of disability insurance, long-term disability insurance or workers compensation programs in case of a retroactive adjustment Related information
Adjustments to other entitlements or allowances due to a retroactive pay revision
The following list includes some, but not all, entitlements and allowances that we will adjust in the event of a retroactive revision:
- extra-duty pay
- additional hours worked
- vacation pay
- maternity leave allowance
- parental leave allowance
- educational leave allowance
- leave with income averaging
- vacation leave and extra-duty pay cash-out
- severance pay
- salary for the month of death
Estimated wait time for receiving payment for a retroactive revision
Unless the agreement specifies a longer timeframe, the Public Service Labour Relations Act requires the employer to implement the provisions of the new collective agreement within 90 days after its signing. The Pay Centre’s priorities during this period are to:
- verify and validate that your pay rate is updated accurately
- generate payments for the retroactive period
- request adjusted payments for any allowances or entitlements affected by the revised pay rate
- if applicable, the Pay Centre notifies the insurance underwriters for Disability Insurance, Long-term Disability Insurance and the Workers Compensation Board of any pay-rate changes
- where applicable, we provide the Government of Canada Pension Centre with the information needed to revise your pension entitlement
Estimated wait time for receiving payment for a retroactive revision Related information
Order in which the Pay Centre applies a pay increment and a revision issued on the same date
The pay increment will be applied first, followed by the pay revision. Refer to the pay administration section of your collective agreement.
Order in which the Pay Centre applies a pay increment and a revision issued on the same date Related information
The following information might help you understand your options and responsibilities when there is a change to your basic pay because of a salary protection situation.
Situations in which salary protection applies
Salary protection might apply if you are:
- subject to downward reclassification or conversion to a level with a lower maximum rate of pay
- declared surplus or laid-off and are appointed to a level with a lower maximum rate of pay within a year
Situations in which salary protection applies More information
Effect on your pay if your position is subject to a reclassification or a conversion to a level with a lower maximum pay rate
In such cases, salary protection will apply to your pay rate. Protection will continue until the position becomes vacant or until the maximum of the reclassified level becomes greater than your former maximum pay rate.
Effect on your pay rate after you are declared surplus or are laid-off and you accept a position that has a lower maximum rate of pay than your former position
In such cases, salary protection will apply to your pay rate. Protection will continue until you are promoted or deployed, or transferred, to a position with a higher maximum pay rate.
The Income Tax Act and the Financial Administration Act provide for the set-off, or repayment, of debts owed to the Crown from any money owed to the employee or the employee’s estate.
Understanding statutory set-offs
At times, a delinquent debtor does not opt to make voluntary arrangements to repay a debt to the Crown. In such cases, action to recover, or set off, the debt from any sum of money owing to the employee or to the estate of the employee under a specific statute or regulation may be initiated.
The difference between a statutory set-off and a garnishment
A statutory set-off generally involves a debt that is owed to the Crown. A garnishment applies when you owe a debt to a creditor or to maintain family-support arrangements.
Debts to the Crown that can be set off, or deducted, from monies owing to you or your estate
Some typical types of debts to the Crown include:
- income tax arrears
- Canada Student Loan
- overpayment of Employment Insurance benefits received
Determining precedence between a garnishment and a statutory set-off
The recovery of the debt to the Crown will take precedence over a garnishment.
The Garnishment Attachment and Pension Diversion Act allows for the garnishment of a government employee's salary to repay the individual's debts.
The Financial Administration Act provides the Receiver General for Canada with the authority to recover a salary overpayment from any money owed to an employee or the employee’s estate.
How salary overpayments are recovered
Whenever possible, we will recover salary overpayments in a lump sum from your next payment. If the overpayment is large and its immediate recovery would cause you financial hardship, the delegated authority within your department may instead direct that a minimum of 10% of your gross salary entitlement be recovered every pay.
For the purposes of recovery of overpayments resulting from the transition to the Phoenix pay system in 2016, recovery of overpayments of salary, wages and allowances is to occur over the number of pay periods equivalent to the number of pay periods over which the overpayment occurred.
Note: You must provide the delegated authority with evidence to prove that immediate recovery would cause you financial hardship.
Identifying your departmental delegated authority
Contact your department’s finance branch for assistance.
Repaying an overpayment in an amount that is less than 10% of your gross salary
In exceptional circumstances, the delegated authority may allow for this.
Note: You must provide the delegated authority with evidence to prove that repayment of 10% of your gross salary would cause you financial hardship.
Repaying an overpayment in an amount that is greater than 10% of your gross salary
You may ask that more than 10% of your gross salary go toward recovery of an overpayment. In addition, if the delegated authority believes that you helped cause the overpayment, they may make the same request.
How employees are notified about overpayments and recovery methods
The Pay Centre will send you a notice of overpayment, the method of recovery and repayment options, if applicable.
Repaying an overpayment in an amount that is greater than 10% of your gross salary Related information
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