Financial Investment Scenario
FINANCIAL INVESTMENT SCENARIO
According to the laws of Northwest Nunavut the payroll tax may be levied on employers with direct imposition of tax to all employees working in those regions. The payroll tax act has been into effect for a long duration of with comprehensive review of the system in required interval basis. Therefore, any employer who pays the employees for the work performed must be able to register in accordance to the respective legislations that are governing the entire region about tax payment and meeting the remittance cost as designed1. The employers are required to withhold the prescribed section of the salary to pay the tax requirement which ought to be done within the expected period and in accordance with stipulated jurisdiction governing and controlling matters regarding to tax remittance. The tax must be paid directly to government of Nunavut which is annual filing requirement that is determined by the laws of the land.
Usually, under the tax law the payroll tax is calculated as the 2% of gross earning obtained from each employee working in the region2. The remuneration should be noted that it includes wages, bonuses, salary, taxable allowance benefits and retiring allowances which are accorded to all employees working in the region under the control of the respective employer. Tax payment is a mandatory application that applies to all employees who work and provide their service in the Northwest region of Nunavut regardless of the actual residential areas as may be determined with respective authority governing the tax remittance and payment to the government2.
The paper will discuss and expound on the limit of tax payment, significant penalties that may be instigated to individuals who fail to comply and tax policies of Northwest Territories.
Limit of Tax Payment in Northwest
Any of the employees who is earning less than $ 5,000 annually will not be subject to paying of taxes according to jurisdiction of the region and legislation that have been stipulated to control tax payment. However, one will be required to pay tax on determination of all earnings if the employee earns more than half of the employment in accordance with legislations of Northwest Territories1. Failure to pay tax will attract a significant percentage of fines and penalties that are imposed on employer in event he or she fails to comply with stipulated legislation that control tax payments in the country. The penalty can tend to be as high as 20% of the total tax ought to have been collected in the entire period that may designed by the authority of the country1. Therefore, it remains the duty of each employer to comply with requirements of paying taxes at required time with no failure.
Employee working days = 10 days
Daily rate = 400.00
Therefore; 400.00*10 = $ 4000
The above employee will not be required to pay payroll tax of 2% as required. 2% of 4000= $ 80. The reason is that the respective employee is earning total income which is less than $ 5,000 therefore remains within the bracket to be exempted from tax payment in accordance to the law and legislations that govern tax payment in the Northwest Territories2.
Employee working = 15 day
Daily earnings = 400 thus 15*400= $ 6,000 will be subject to pay payroll tax of 2% which is equal to $ 120. The reason is that the total earning ranges above the lower limit of tax being levied from employees of $ 5,000.
It should be noted that payroll tax will be paid regardless of the residential province of the employees with more emphasize that the individual is working in Northwest Territories as provided by the law.
Duties of Employer in Accordance with Northwest Legislation
Each employer working within the jurisdiction of the province will be required to pay taxes after comprehensive registration with the required authority1. The aim is to conduct tax deduction with aim of compensation to respective employee in subject to requirement of the tax authority in the region. The information should be submitted within the period of thirty days from respective employment period2. Therefore, employees will be required to work and remain in liable for total tax required by regulating jurisdiction of the country1. It should be noted that the regulations do not relieve the employees from making tax payment or in any manner of complying with requirement of the tax authority. During the period the following information must be included details of employees, wages earned during the period, reason for withholding tax and period worked.