Income Tax Deduction Regulations, I-2 Reg 2

1 INCOME TAX DEDUCTION I-2 REG 2 The Income Tax Deduction Regulations being Chapter I-2 Reg 2 (effective July 1, 1980) as amended by Saskatchewan Regulations 36/1982. NOTE: This consolidation is not official. Amendments have been incorporated for convenience of reference and the original statutes and regulations should be consulted for all purposes of interpretation and application of the law. In order to preserve the integrity of the original statutes and regulations, errors that may have appeared are reproduced in this consolidation. 2 I-2 REG 2 INCOME TAX DEDUCTION Table of Contents TITLE AND INTERPRETATION 7 Deductions from remuneration paid on or 1 Title after January 1, 1981 2 Interpretation 8 Deductions from periodic payments where commissions included 3 Province in which person deemed employed 9 Deductions from non-periodic payments DEDUCTIONS FROM INCOME 10 Deductions not required in certain 4 Deductions from remuneration paid from circumstances July 1, 1980 to December 31, 1980 APPLICATION OF 5 Applications FEDERAL REGULATIONS 6 Interpretation 11 Application of Federal Regulations 3 INCOME TAX DEDUCTION I-2 REG 2 CHAPTER I-2 REG 2 The Income Tax Act TITLE AND INTERPRETATION Title 1 These regulations may be cited as The Income Tax Deduction Regulations. Interpretation 2(1) In these regulations: (a) “Act” means The Income Tax Act; (b) “deduct” includes withhold; (c) “employee” means a person who: (i) receives remuneration; and (ii) reports for work at an establishment of his employer located in Saskatchewan; (d) “remuneration” means the amount of remuneration paid by an employer to an employee less the sum of: (i) any contribution under the Canada Pension Plan, as amended from time to time, or under a provincial plan as defined in section 3 of the Canada Pension Plan, as amended from time to time; (ii) any contribution to or under a registered pension fund or plan; and (iii) any premium under the Unemployment Insurance Act, 1971 (Canada), as amended from time to time; that the employer may deduct. 19 Feb 82 cI-2 Reg 2 s2. Province in which person deemed employed 3 For the purposes of these regulations, where an employee is not required to report for work at any establishment of his employer, he is deemed to report for work: (a) with respect to remuneration that is salary, wages or commissions, at the establishment of his employer from which the remuneration is paid; or (b) with respect to remuneration other than salary, wages or commissions, at the establishment of his employer in the province where the employee resides at the time the remuneration is paid and, if his employer does not have an establishment in that province, his employer is deemed to have an establishment in that province. 19 Feb 82 cI-2 Reg 2 s3. 4 I-2 REG 2 INCOME TAX DEDUCTION DEDUCTIONS FROM INCOME Deductions from remuneration paid from July 1, 1980 to December 31, 1980 4(1) This section applies to the period commencing on July 1, 1980 and ending on December 31, 1980. (2) For the purposes of section 14 of the Act, an employer shall deduct from remuneration paid to an employee for a pay period an amount equal to the product of 53/144 and: (a) the amount of the employee’s tax to be deducted that is determined in accordance with Table 397 of Schedule I of the Federal Regulations by taking into account: (i) the amount of the remuneration; (ii) the length of the pay period with respect to which the remuneration is paid; and (iii) the employee’s exemptions for the taxation year in which the remuneration is paid; or (b) where the employer pays a remuneration that is not provided for in Table 397 of Schedule I of the Federal Regulations, the amount of tax to be deducted that is determined in accordance with column (1), (2), (3), (4) or (5) of Table 397 A of Schedule I of the Federal Regulations by taking into account: (i) the length of the pay period with respect to which the remuneration is paid; (ii) the employee’s remuneration for the taxation year in which the remuneration is paid; and (iii) the employee’s exemptions for the taxation year in which the remuneration is paid. (3) For the purposes of subclauses (1)(b)(ii) and (iii), an employee’s remuneration for the taxation year in which the remuneration is paid is equal to the product of: (a) the employee’s remuneration for the pay period mentioned in subclause (1) (b)(i); and (b) the number of pay periods that the employee may reasonably expect in the taxation year. 19 Feb 82 cI-2 Reg 2 s4; 26 Mar 82 SR 36/82 s3. Applications 5 Sections 6 to 8 apply to the period on and after January 1, 1981. 19 Feb 82 cI-2 Reg 2 s5; 26 Mar 82 SR 36/82 s4. Interpretation 6 In sections 7 and 8: (a) “notional tax” of an employee for a taxation year means the amount of the employee’s tax calculated in accordance with subsection 3(1) of the Act; (b) “form” means the form mentioned in subsection 107(1) of the Federal Regulations. 19 Feb 82 cI-2 Reg 2 s6; 26 Mar 82 SR 36/82 s5. 5 INCOME TAX DEDUCTION I-2 REG 2 Deductions from remuneration paid on or after January 1, 1981 7(1) In this section: (a) “exemptions” of an employee for a taxation year means: (i) where: (A) an employee’s annual remuneration is between $38,500 and $126,999; and (B) the pay period of the employee is a weekly, a bi-weekly, a semi- monthly, a monthly or a four-week period; an amount equal to the sum of: (C) the employee’s exemptions for the taxation year, calculated pursuant to paragraph (a) of the definition “exemptions” in subsection 100(1) of the Federal Regulations; and (D) the sum of any deductions to which the employee may be entitled for the year under paragraphs 8(1)(a) and 100(1)(d) of the Federal Act; or (ii) in the case of an employee other than the one described in subclause (i), an amount equal to the sum of, where the employee’s exemptions for the taxation year fall within a range of amounts recorded on the form with respect to: (A) one of net claim codes 2 to 13 on the form, the amount that is the whole dollar amount that is next higher than the mid-point of the range; or (B) net claim code 1 on the form, the amount of his exemptions for the taxation year calculated pursuant to paragraph (a) of the definition “exemptions” in subsection 100(1) of the Federal Regulations; and any deductions to which that employee may claim to be entitled under paragraphs 8(1)(a) and 110(1)(d) of the Federal Act; (b) “notional annual remuneration” of an employee for a taxation year means an amount equal to the product of: (i) the amount that is deemed, pursuant to Schedule I of the Federal Regulations, to be the mid-point, for the pay period in which remuneration is paid to the employee, of the applicable range of remuneration paid in the pay period; and (ii) the maximum number of the employee’s pay periods in the taxation year; (c) “notional net remuneration” of an employee for a taxation year means an amount equal to the difference between the employee’s notional annual remuneration and his exemptions. (2) For the purposes of section 14 of the Act, an employer shall deduct from remuneration paid to an employee for a pay period an amount equal to the employee’s notional tax for the taxation year divided by the maximum number of the employee’s pay periods for the taxation year. 6 I-2 REG 2 INCOME TAX DEDUCTION (3) The amount determined under subsection (2) is to be rounded to the nearest multiple of 5¢ or, if the amount is equidistant from two multiples of 5¢, to the higher multiple. (4) Notwithstanding subsection (2), where the remuneration is paid to an employee whose exemptions as defined in clause (1)(a)(i) for the taxation year are claimed on the form as net claim code X, the amount to be deducted is to be determined by applying subparagraph 102(1)(g)(iii) of the Federal Regulations to these regulations, mutatis mutandis. 19 Feb 82 cI-2 Reg 2 s7; 26 Mar 82 SR 36/82 s6. Deductions from periodic payments where commissions included 8(1) In this section: (a) “exemptions” of an employee for a taxation year, as recorded by employee on the form, means the sum of: (i) an amount that is: (A) his estimated deductions for that taxation year pursuant to subsection 100(1) of the Federal Regulations; or (B) his total actual deductions under paragraphs 8(1)(a), (f), (h) or (j) of the Federal Act for the immediately preceeding year; (ii) the employee’s exemptions for the taxation year calculated pursuant to paragraph (a) of the definition “exemptions” in subsection 100(1) of the Federal Regulations; and (iii) any deduction that the employee may claim to be entitled to for the taxation year under paragraph 100(1)(d) of the Federal Act; (b) “notional net remuneration” of an employee for a taxation year means an amount equal to the difference between the employee’s exemptions and the mid-point of the applicable range of total remuneration, provided for in Schedule I of the Federal Regulations, based on the employee’s: (i) actual total remuneration for the immediately preceeding taxation year; or (ii) estimated total remuneration for the taxation year; (c) “notional rate of tax” of an employee for a taxation year means an amount equal to the amount of the employee’s notional tax for the taxation year divided by the employee’s notional net remuneration for the taxation year, and, where the calculation of notional rate of tax results in more than two digits after the decimal point in the decimal fraction: (i) the second digit is to be rounded to the nearest multiple of one hundredth; and (ii) where the third digit is equidistant from two multiples of one hundredth, the second digit shall be rounded to the higher multiple; (d) “total remuneration” of an employee for a taxation year means an amount equal to the amount recorded by him on the form as his remuneration. 7 INCOME TAX DEDUCTION I-2 REG 2 (2) Notwithstanding section 7 where: (a) an employee has made an election pursuant to subsection 107(2) of the Federal Regulations and has not revoked such election; and (b) the remuneration paid to the employee is: (i) a commission or a combination of a commission and a salary or wage; or (ii) a salary or wage where the employee is remunerated by a combination of commissions and salary or wage; the employer, for the purposes of section 14 of the Act, shall deduct from remuneration paid to the employee an amount equal to the product of: (c) the amount of remuneration paid; and (d) the employee’s notional rate of tax. 19 Feb 82 cI-2 Reg 2 s8; 26 Mar 82 SR 36/82 s7. Deductions from non-periodic payments 9(1) In this section, “provincial fraction” means, with the respect to the period: (a) commencing on July 1, 1980 and ending on June 30, 1981, 53/144; (b) commencing on July 1, 1981, 51/142. (2) Notwithstanding sections 4 to 8 of these regulations and for the purposes of section 14 of the Act, where: (a) any remuneration paid by an employer to an employee is a bonus or a retroactive increase in remuneration; and (b) the total remuneration, including the bonus or retroactive increase, paid by the employer to the employee in the taxation year in which the bonus or retroactive increase is paid is not reasonably expected to be greater than $5,000; the employer shall deduct from the bonus or retroactive increase an amount equal to the product of the provincial fraction and 15% of the amount of the bonus or retroactive increase. (3) Notwithstanding sections 4 to 8 of these regulations and for the purposes of section 14 of the Act, where: (a) any remuneration paid by an employer to an employee is a bonus; and (b) the total remuneration, including the bonus, paid by the employer to the employee in the taxation year in which the bonus is paid is reasonably expected to be greater than $5,000; the employer shall deduct from the bonus an amount equal to the difference between: (c) the sum of: (i) the amount of remuneration, not including the bonus, paid by the employer to the employee in the pay period in which the bonus is paid; and 8 I-2 REG 2 INCOME TAX DEDUCTION (ii) an amount equal to the amount of the bonus divided by the number of pay periods of the employee in the taxation year in which the bonus is paid; and (d) the product of: (i) an amount to be deducted, calculated in accordance with sections 4 to 8, with respect to the amount of the employee’s remuneration, not including the bonus; and (ii) the number of pay periods of the employee in the taxation year in which the bonus is paid. (4) Notwithstanding sections 4 to 8 of these regulations and for the purposes of section 14 of the Act, where: (a) any remuneration paid by an employer to an employee is a retroactive increase in remuneration; and (b) the total remuneration, including the retroactive increase, paid by the employer to the employee in the taxation year in which the retroactive increase is paid is reasonably expected to be greater than $5,000; the employer shall deduct from the retroactive increase an amount equal to the product of: (c) the difference between: (i) the amount to be deducted, calculated in accordance with sections 4 to 8, with respect to the new rate of remuneration; and (ii) the amount to be deducted, calculated in accordance with sections 4 to 8, with respect to the previous rate of remuneration; and (d) the number of pay periods with respect to which the increase in remuneration is retroactive. (5) Notwithstanding sections 4 to 8 of these regulations and for the purposes of section 14 of the Act, where remuneration paid by an employer to an employee resident in Canada is a lump sum payment as described in subsection 103(6) of the Federal Regulations the employer shall deduct from the remuneration an amount equal to the product of the provincial fraction and: (a) where the amount of remuneration paid is not greater than $5,000, 10% of the amount of remuneration paid; (b) where the amount of remuneration paid is greater than $5,000 but not greater than $15,000, 20% of the amount of remuneration; or (c) where the amount of remuneration paid is greater than $15,000, 30% of the amount of remuneration paid. 9 INCOME TAX DEDUCTION I-2 REG 2 (6) Where the lump sum payment mentioned in subsection (5) is pension income or qualified pension income of the employee, as defined in section 110.2 of the Federal Act, the payment is deemed to be the amount of the payment minus the lesser of: (a) $1,000; and (b) the amount of the payment. 19 Feb 82 cI-2 Reg 2 s9; 26 Mar 82 SR 36/82 s8. Deductions not required in certain circumstances 10(1) No employer shall deduct from remuneration paid to an employee any amount pursuant to these regulations where the employee: (a) has filed with the employer a return in a form prescribed by the Federal Act or Federal Regulations claiming that the employee’s income from all sources in the taxation year will be less than his exemptions for the taxation year; or (b) is neither employed nor resident in Canada at the time the remuneration is paid. (2) Clause (1)(b) does not apply to remuneration that is: (a) described in subparagraph 115(2)(e)(i) of the Federal Act and that is paid to a non-resident person who has, in the taxation year, or in a previous taxation year, ceased to be a resident in Canada; or (b) reasonably attributable to the duties of any office or employment performed in Canada by a non-resident person. 19 Feb 82 cI-2 Reg 2 s10. APPLICATION OF FEDERAL REGULATIONS Application of Federal Regulations 11 Sections 106 to 108 of the Federal Regulations apply, mutatis mutandis, to these regulations. 19 Feb 82 cI-2 Reg 2 s11. 10 I-2 REG 2 INCOME TAX DEDUCTION REGINA, SASKATCHEWAN Printed by the authority of THE QUEEN’S PRINTER Copyright©1996