Update on Retro Pay
Friday, February 21, 2020
As indicated in our e-mail of February 6th, where we informed members of our awareness of issues many were having in regards to the retro pay received on February 5th, we have obtained responses from Pay Centre officials on the following:
- Performance Review Employee Appraisal (PREA) amounts were not included in the retroactive payments.
- All full-time employees who have been on leave or the subject of a special work arrangement, will likely require further retroactive pay adjustments to the extent their pay requires adjustments.
- Contrary to prior exercises (under the previous collective agreement), not all pay errors and required adjustments have been addressed in calculating and paying out retro pay adjustments. The PSPC makes a distinction between "pay revisions" and "pay adjustments".
- The taxation rate is automated by the systems based on where you reside, work and your tax exemption rate.
- All payments outside of the normal pay, such as signing bonus and retro pay are taxed at a higher rate than regular pay. The Income Tax Act regulations can be viewed here.
- The system does allow for manual entry to customize tax treatment however this must be done manually file by file and only after a request to the CRA allowing the Government of Canada to either not tax or reduce the tax rate occurs.
- Additional payments made to CPP and EI from the retro pay are not included in the "year to date" calculation because more than one out of the ordinary payment was issued at the same time. It is expected that the YTD column will be accurate on the Feb 19 pay stub.
- Gross amounts under "Collective Agreement - Retroactive Pay" should be reflected in the February 19 pay stub
The AJC Pay Calculator
We have made changes to the pay calculator to reflect the actual period for which the retroactive payment is to be calculated. That is, it is calculated from the date of the start of the new collective agreement, May 9, 2018 and the date on which the salaries were adjusted (for most, this was November 13, 2019). Since the employer did not include the performance pays in the payments, you can leave the PREA percentages at 0%.