The federal government has their own payroll tax regulations, for example the rules outlining taxable benefits, and paying employment insurance premiums. However, each province has their own payroll procedures. So to make processing your payroll as easy as possible and ensure your business is complying with Nunavut’s regulations follow this guide. It will help you with keeping track of how to pay your employees per Nunavut standards, what deduction to make, what the tax rates are and more.

Nunavut Minimum Wage

As of April 1 2020 the Nunavut minimum wage went up to $16.00 making it the highest minimum wage in Canada.

Hours of Work

As per the Nunavut Labour Standards Act, the regulations regarding hours of work are as follows. 

• Maximum hours worked: 10 hours per day and 60 hours per week
• Overtime hours: 8 hours per day or 40 hours per week, whichever one is greater
• Overtime rates: 1 1/2 times the employee's standard rate of pay
• Double time hours: If an employee were to work on another day of rest in same week as the Statutory holiday
• Double time rates: 2 times the standard rate of pay
• Break period: 1/2 hour per consecutive 5 hours worked
• Rest period: At least 24 consecutive hours per week

Workers Compensation Nunavut

The Workers’ Safety Compensation Commission (WSCC) dictates that all employers in Nunavut must report payroll figures and Occupational Health and Safety information every year to their organization. 

Employers’ assessable payroll is used by the WCSS to calculate their annual assessments. Employers must file their Annual Payroll Report by February 28th of each year. Employers will receive a package in the mail that must be completed and filed by the due date. Should employers fail to file by the deadline, the WSCC can incur penalties on their accounts.

The WSCC uses collective liability that is common across the insurance industry, causing all employers to share the risk as an industry subclass. Such collective liability protects individual employers from major payment increases should they experience a significant claims increase. 

The WSCC calculates these rates with independent actuaries by reviewing target funding levels, past trends analysis, and forecasted operating expenses. Such reviews help to determine the optimal rates necessary to cover all of the current and future expenses associated with workplace injuries. 

The WSCC considers the following information when setting Assessments Rate:

• The sustainability of claim costs
• The responsiveness to claims experience trends
• Reflections on industry experience
• What is fair to employers 

In 2022, the average provisional assessment rate will be $2.40 every $100 of assessable payroll. The provisional target rate is the one WSCC uses as a benchmark when determining individual subclass rates, and it is the rate employers were to pay if there was only one set rate for all employers. However, each employer must pay a specified amount reflective of their subclass (the industry group rate), as well as their payroll size. 

2022’s maximum insurable remuneration (YMIR) is $102,200. 

Nunavut Payroll Tax Deductions and Remittances

Tax is deducted by employers from each employee to whom the employer pays remuneration. The rate is 2% of taxable remuneration of each employee who normally works in Nunavut. 

It is at the time of payment that this deduction is made. An employee that typically works outside of Nunavut and earns less than $5000 within the province does not have to pay this tax. However, if the employee earns more than $5000 in the province within a calendar year, then tax is payable on the total amount of remuneration earned within Nunavut. 

Should an employee normally work in Nunavut, then tax is payable on the total amount earned by the employee both in and out of the province. Employees are considered to normally work in Nunavut if they work, provide services, or perform duties within the province for over half of the number of total days worked for an employer in a calendar year. 

Employers will need to register with the Nunavut Government within 21 days of their first remuneration paid to employees. They must remit based on their reporting frequency.  

Pay Statements

In Nunavut, the frequency of pay is required at least monthly. All employees must receive wages owed within ten days of each pay period. As dictated by government legislation, all pay statements must include the following information: 

• Rate of pay
• Net pay
• Date of pay periods
• Deductions and reasons for deductions
• Total hours worked
• Bonus / living allowance upon employee's request

Employers are required to have the following payroll records available for Labour Standards officer/Labour Standards Inspector: 

• Employees name and address
• The hours worked each day 
• Gross wages and wage payments made
• The first day of commencement of the present term of employment and the first day the employee started their employment
• The rate of wage and the date/particulars of each change in the rate of wage
• Each annual vacation granted, showing the date of commencement and completion
• Amount of vacation pay given
• Amount of money paid in lieu of vacation 
• Amount of money paid for general holidays 
• Amount of each deductions from employees earring and purpose for each deduction 
• The notice of termination of employment should the employee no longer be employed 
• Total money paid in lieu of the notice of termination period of employment

Leave of Absence in Nunavut

Termination Notice

The notice requirements for individual termination is in the chart below. 

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