Employers Guide To NWT Payroll Tax.doc by shenreng9qgrg132

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									            Employer’s Guide To NWT Payroll Tax
           The NWT Payroll Tax Act, 1993 came into force on July 1, 1993.

This guide has been developed to familiarize employers with the basics of this tax and their
responsibilities under the Act. This information is a guide, not a substitute for the Act or for the
regulations.

WHO SHOULD REGISTER

Every employer who pays an employee for work performed in the Northwest Territories (NWT)
must register with the Government of the Northwest Territories. An employer is a person or entity
that pays remuneration to an employee while that employee is working in the NWT.

WHEN SHOULD I REGISTER

All employers with one or more employees must register within 21 days after the employer first
pays remuneration to an employee.

ESTIMATED GROSS REMUNERATION TO BE PAID TO EMPLOYEE

Employers are to report the estimated total remuneration subject to the payroll tax, for the entire
current calendar year. This amount will be used to determine whether the employer's reporting
period will be annually, semiannually, quarterly or monthly. Employers that operate seasonally
are to report the estimated total remuneration subject to the payroll tax for the season. Seasonal
employers must report once each month during the season.

CERTIFICATION

An authorized company officer must complete this area. Please include the date completed and
the officer's printed name and signature, title and telephone number.

COMPLETING YOUR APPLICATION FOR REGISTRATION

All sections of the form must be completed. Forms that are not properly completed will be
returned. This may mean that the deadline for registration is missed.

ACKOWLEDGEMENT OF THE APPLICATION FOR REGISTRATION

Employers will be notified in writing of their assigned registration number, the effective date of
their registration, and the reporting period requirements. This registration number must be used
on all subsequent correspondence.

PENALTY FOR FAILURE TO APPLY

Failing to submit a completed Application for Registration form within the allotted time is an
offence punishable by a fine of between $1,000 and $5,000.
HOW IS THE TAX CALCULATED

The NWT payroll tax is 2% of gross remuneration for each employee. ``Remuneration`` as
defined in the Payroll Tax Act, 1993 includes all payments and the value of all benefits and
allowances received by an individual from an office or from employment. Payments that are not
related to an office or employment income (such as self employment income, dividends, student
or government grants) are not taxable.

Specifically, the tax is applied to any amount referred to in subsection 5(1) or sections 6 and 7 of
the Income Tax Act (Canada) including but not limited to salary, wages, bonuses, commissions,
employer paid benefits and honoraria. Deductions from income that apply to the Income Tax Act
(Canada) do not apply to the Payroll Tax Act, 1993.

REPORTING REQUIREMENTS

As of January 1, 2005 all employers must meet the following requirements of the Act:

1.   Deduct, at source, the 2% payroll tax from every employee to whom the employer pays
     remuneration. The deduction must be made at the time of payment to the employee. No tax
     is payable by an employee who normally works outside the NWT and does not earn more
     than $5,000 while working in the NWT, but earnings must still be reported to the GNWT.

2.   If the employee earns more than $5,000 in a calendar year in the NWT, tax is payable on
     the full amount of remuneration earned while in the NWT. If an employee earns more than
     half of their remuneration in the NWT, tax is payable on all earnings regardless of the
     province or territory of residence.

      Generally, employees that work in Nunavut and the NWT for the same employer are liable
      to pay a proportional amount to the territory in which the work was performed.

3.   Remit the amounts deducted to the Government of the Northwest Territories as required by
     the regulations. A reporting period (monthly, quarterly, semi-annually or annually) will be
     determined for each employer at the time of registration. The Minister may amend this
     reporting period.

4.   Report annually the name and social insurance number of each employee paid during the
     year, the total amount of remuneration paid to each employee and the amount of payroll tax
     withheld from each employee. This return must be completed and filed on or before
     February 28th of the year following the year in which the remuneration was paid.

PENALTIES AND INTEREST

Employers are deemed to hold payroll tax in trust for the Government of the Northwest
Territories. Failure to collect is illegal and failure to remit is theft. Employers who do not register,
deduct or remit as required may be assessed a penalty and interest or may be prosecuted.
Penalties range from $100 to $5,000 plus 20% of the tax depending on the offence and number
of occurrences.

For Additional Information:                (867) 920-3495 Telephone
                                           (867) 873-0325 Fax
                                           (800) 661-0820 Toll Free phone
                                           payroll_tax@gov.nt.ca E-mail address

								
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