On 31 March 2021, the Canada Revenue Agency (CRA) updated its COVID-19 and international income tax issues webpage with supplemental guidance for cross-border Canadian workers. A new Section VII offers administrative relief for Canadian resident cross-border workers concerning their 2020 income tax liability.

Section VII also clarifies the CRA's views about the effect of the travel restrictions on the determination of a permanent establishment in Canada. It provides for an extension of the initial administrative relief concerning individual Canadian income tax residence and employment income earned in Canada. The CRA plans to update the new Section VII with examples and answers to frequently asked questions in the near future; in the meantime, questions about the guidance or issues not covered by the guidance can be directed to [email protected].

Edward Kowalski, Esq., is Manager, Payroll Information Resources, for the American Payroll Association.

The Internal Revenue Service (IRS) has issued a notice providing adjustments to the limitation on housing expenses for specific locations for purposes of the foreign housing cost exclusion under Internal Revenue Code (IRC) §911 [Notice 2021-18, 2-26-21]. The U.S. Secretary of the Treasury makes annual adjustments to this limit based on geographic differences in housing costs.

Notice 2021-18 is effective for taxable years beginning on or after January 1, 2021. However, a taxpayer may elect to apply the 2021 adjusted housing limitations contained in the notice to his/her taxable year beginning in 2020.

Exclusions Allowed
IRC §911 generally allows a U.S. citizen or resident living abroad to exclude from U.S. taxable income certain foreign earned income. A qualified individual is also allowed an exclusion from gross income for certain housing costs paid or incurred on his/her behalf that exceed a certain base housing amount.

A qualified individual incurring housing expenses in one or more of the listed high-cost localities in 2021 may use the adjusted limit specified (instead of $32,610) in determining the housing cost amount on Form 2555, Foreign Earned Income. The $32,610 limit continues to apply to a qualified individual not incurring housing expenses in a listed high-cost locality.

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association

On 19 February 2021, the United Kingdom Supreme Court dismissed an appeal by Uber and unanimously upheld a 2016 employment tribunal decision that the ride-booking company's drivers are workers and not independent contractors.

Important Factors
In upholding the tribunal decision, the Court determined five factors weighed against Uber's portrayal of the drivers as independent contractors:

1. The remuneration paid to drivers for work is fixed by Uber. The drivers have no say in it (other than by choosing when and how much to work).
   
   
2. Uber dictates the contractual terms on which drivers perform their services. Drivers are required to accept Uber's standard form of written agreement, and the terms on which they transport passengers are also imposed by Uber.
   
   
3. Although drivers can choose when and where to work, once a driver has logged onto the Uber app, a driver's choice about whether to accept requests for rides is limited by Uber. Uber also monitors the driver's rate of acceptance (and cancellation) of trip requests.
   
   
4. Uber exercises a significant degree of control over the way drivers deliver their services.
   
   
5. Uber restricts communication between passengers and drivers to the minimum necessary to perform a particular trip. Uber also takes steps to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride.

Another key issue in the Court's decision recognized that the terms in the agreement between the parties does not determine employment or worker status. In this case, the contract labeled the drivers as "self-employed" and described Uber's operations, including its app, in ways that would support a finding of self-employment. However, the English courts, including the Supreme Court, consistently found the reality of how the relationship and the driver app operated very different from the terms of the contract and that the drivers were "workers."

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association

 

The United Kingdom's Coronavirus Job Retention Scheme (CJRS) will be further extended until the end of April [HM Treasury, Chancellor extends furlough and loan schemes, 17 December 2020].

Extended Until End of April
The CJRS has been extended again until 30 April 2021 for all of the U.K. As part of the CJRS, eligible employees will receive 80% of their usual salary for hours not worked, up to £2.500 a month. Previously, the CJRS was extended until 31 March 2021. For more details on CJRS, see GPMI News, United Kingdom Extends Coronavirus Job Retention Scheme.

Laura Lough, Esq., is Director of Publications for the American Payroll Association

The United Kingdom's Coronavirus Job Retention Scheme (CJRS) will now run until the end of March with employees receiving 80% of their current salary for hours not worked. This will help U.K. employees over the winter months during the COVID-19 pandemic [HM Treasury, Government Extends Furlough to March and Increases Self-Employed Support, 5 November 2020]. A fact sheet detailing the final support is available.

Extended Until End of March
The CJRS is extended until 31 March 2021 for all of the U.K. The government will review the policy again in January. As part of the CJRS, eligible employees will receive 80% of their usual salary for hours not worked, up to £2.500 a month. Here are other details:

• Employer flexibility. Businesses can use the CJRS for employees for any amount of time and shift pattern, including furloughing them full-time.
  
  
• Employer contribution. There are no employer contribution to wages for hours not worked. Employers will cover National Insurance and Employer pension contributions for hours not worked. For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month.
  
  
• Payment. The extended CJRS will continue to operate the same way with businesses being able to claim either shortly before, during, or after running payroll.
  
  
• Employee eligibility. Neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended CJRS (if other eligibility criteria are met). An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March and 30 October 2020, notifying a payment of earnings for that employee.
  
  
• Employees who are re-employed. Employees who were employed and on the payroll on 23 September 2020 who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March to 23 September 2020, notifying a payment of earnings for those employees.
  
  

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association

 

A sweeping data protection law passed in 2018 by Brazil's National Congress and amended in 2019, but whose effective date had been delayed, has now come into effect. On September 18, 2020, President Jair Bolsonaro signed enacting legislation bringing the General Data Protection Law (LGPD) into full force and effect as of that day. The penalty provisions of the LGPD will not take effect until August 1, 2021.

The LGPD contains broad protections and regulations governing the collection and sharing of personal data and the processing of personal data, which is defined broadly to include any information relating to an identified or identifiable subject. It establishes various rights concerning personal data, including the right to:

• Confirmation of the existence of data processing
• Access to personal data held by a data controller (person or entity making determinations about the processing of personal data)
• Correct incomplete, inaccurate, or obsolete data
• Block or eliminate unnecessary or excessive data
• Eliminate personal data altogether under certain circumstances
• Know about public or private entities with whom a data controller has shared data

The law shares broad similarities with the European Union's General Data Protection Regulation (GDPR) and the California Consumer Privacy Act, but the specifics of each law differ and require particularized compliance. Enforcement of the LGPD will be carried out by a newly created National Data Protection Authority (ANPD).

Edward Kowalski, Esq., is Manager, Payroll Information Resources, for the American Payroll Association

 

Canada is funding more than $19 billion through the Safe Restart Agreement (SRA) to help the country's provinces and territories safely restart their economies and recover from the impacts of COVID-19, and make the country more resilient in the event of possible future waves of the virus.

Paid Sick Leave, Child Care, Other Priorities
The funding addresses key priorities identified by Canada's First Ministers needed for the safe restart of Canada's economy during the next six to eight months. Among the priorities funded by the SRA is a new temporary income support program to provide workers who do not have paid sick leave with access to 10 days of paid sick leave related to COVID-19. The SRA also provides support to ensure that safe and sufficient child care spaces are available to support parents' gradual return to work.

The federal money will also support measures to increase testing and contact tracing of COVID-19 to protect Canadians from a future outbreak, and support the capacity of the country's health care systems. It will also assist with the procurement of personal protective equipment to help essential workers and protect seniors. The SRA is also designed to quickly provide money to municipalities to help them deliver essential services like public transit.

To access the funding, each province and territory will need to outline how they will invest these funds. The SRA funding is in addition to funding previously provided to the provinces and territories.

Edward Kowalski, Esq., is Manager, Payroll Information Resources, for the American Payroll Association

Nonresidents in Canada who cannot return to their own country because of the coronavirus pandemic (COVID-19) will not trigger a presence in the country for tax purposes, the Canada Revenue Agency (CRA) said [CRA, Guidance on International Income Tax Issues Raised by the COVID-19 Crisis].

Effective Dates
The CRA said the guidance applies from 16 March through 29 June 2020, although the timeline may be extended, if necessary. However, it is possible that income tax issues may arise from travel restrictions instituted by another country independent of those instituted by Canada.

Extra Time Will Not Count Toward 183-Day Limit
Nonresidents who normally work outside of Canada but are unable to leave the country due to COVID-19-related travel restrictions will not have the extra time spent in Canada count toward the 183 days that trigger a taxable presence or residency in the country, the CRA said. The eased restrictions apply both for individual tax purposes and for purposes of determining a specific type of permanent establishment of a foreign company.

Email Address for Questions
Taxpayers who have specific questions can email [email protected].

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association.

The Office of the Revenue Commissioners (Revenue) of Ireland announced that as of 8 May 2020, the COVID-19 Temporary Wage Subsidy Scheme (TWSS) has entered an "operational phase" that replaces the initial determination of wage subsidies when the program was put in place on 26 March 2020.

The TWSS provides eligible employers with a subsidy that must be included as part of employees' wages. The program is open to employers that have experienced significant negative economic disruption due to COVID-19. Employers should be able to show that they meet the eligibility criteria set out by Revenue.

The TWSS is operated in real-time by employers through the normal payroll process and is based on an employee's gross pay. The amount of the subsidy paid to an employee must be indicated on the employee's payslip labeled as "GovC19 WageSub."

During the initial phase of the TWSS, eligible employers were reimbursed a maximum subsidy of €410 for each eligible employee, regardless of the employee's income. As of 8 May 2020, Revenue confirmed that the TWSS is now based on each eligible employee's average net weekly pay for January and February 2020, as shown on payroll reporting to Revenue by the employer. Revenue also announced that it has implemented most of the revised TWSS subsidy rates, which are effective for payroll submissions made to Revenue on or after 4 May 2020.

Details about the administration of the TWSS during the operational phase are available on Revenue's website. Updated statistics on the administration of the TWSS are also available.

Edward Kowalski, Esq., is Manager of Payroll Information Resources for the American Payroll Association.

You may be familiar with GPMI's Virtual Congress, however were you aware GPMI, in cooperation with APA, has launched a larger event, Congress Xstream: An Online Conference & Expo, 2-5 June. Congress Xstream brings you online world class payroll education for professionals in payroll, tax, finance, global mobility, human resources, and benefits. Delivered over four days, this exclusive virtual payroll event provides opportunities to explore a wide spectrum of payroll topics and offers virtual networking opportunities with payroll professionals and vendors.

Four general sessions combined with 28 workshop options (18 that provide globally focused content or are of interest to global professionals) divided over eight workshop sessions will provide a variety of content and educational opportunities for all levels of payroll professionals. GPMI participants can choose from workshops such as:

• Expatriate Payroll 101: Everything You Need to Know to Get Started
• Global Payroll Models in Detail: Which Is Right for You?
• The Payroll Global Culture Map
• U.S. Employers and Global Payroll Challenges
• Winning Globally: Discovery, Strategy, Governance

Providing a well-rounded and balanced experience is our goal with Congress Xstream. Participants will also have access to a staffed and interactive Expo and networking lounges. Chat with leading service and resource providers, including being able to participate in demonstrations. Interact with colleagues from around the globe in the networking lounges; share experiences and war stories. Each day allows for something new.

Virtual Congress & Expo, 24-25 June
Included with your registration to Congress Xstream, is Virtual Congress on 24-25 June. These sessions are all NEW, no repeats! There are three general sessions, including "Cultural Currency" presented by the 2019 Global Vision Award Winner, Kira Rubiano. Attendees can choose between 13 concurrent sessions to customize their learning experience, expand their payroll knowledge, and explore new areas available to payroll professionals. Workshops for the two-day event include:

• Global Money Moving Mania
• Storytelling With Payroll Data
• The Future of Global Payroll - Maximize Impact Through the Global Governance Framework
• The Role of Shared Services in Global Payroll

Both events, separate or together, offer participants an immense opportunity to learn and grow as payroll professionals. Participants will have on-demand access to Congress Xstream until 5 September and Virtual Congress until 25 September. For complete information and to register, please visit www.globalxstream.com.

Scott Wilson, CAE, PMP, is Director of Strategic Initiatives for the Global Payroll Management Institute and American Payroll Association

 

The United Kingdom announced it is relaxing its residency rules due to travel restrictions caused by COVID-19. Whether days spent in the U.K. can be disregarded due to exceptional circumstances depends on the individual's facts and circumstances.

New Exceptional Circumstances
There are new exceptional circumstances listed by the U.K. government during the COVID-19 crisis. These circumstances are considered as "exceptional" if a person:

• Is quarantined or advised by a health professional or public health guidance to self-isolate in the U.K. as a result of the virus;
• Is advised by official government advice not to travel from the U.K. as a result of the virus;
• Is unable to leave the U.K. as a result of the closure of international borders; or
• Is asked by his or her employer to return to the U.K. temporarily as a result of the virus.

General Residency Rules
Whether a person is a U.K. resident usually depends on how many days are spent in the U.K. in the tax year (6 April to 5 April the following year). A person is automatically a U.K. resident if he or she spent 183 or more days in the U.K. in the tax year or if his or her only home was in the U.K. (the person must have owned, rented, or lived in it for at least 91 days in total and spent at least 30 days there in the tax year).

A person is automatically a nonresident if he or she spent fewer than 16 days in the U.K. (or 46 days if he or she has not been classified as a U.K. resident for the three previous tax years) or he or she works abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the U.K., of which no more than 30 were spent working.

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association.

 

GPMI, along with its partners have developed a COVID-19 resource page to assist global payroll professionals as we continue to navigate these uncharted waters. This one-stop-shop has compiled articles, webinars, resources, and tools to provide insight, guidance, and support as the globe responds to the pandemic differently. As such employment and payroll requirements have become center stage; as a payroll professional our subscribers need to know where to find country specific information that their employers need.

There is arguably no more crucial function within an organization than getting employees paid accurately and on time. As employers respond to the spread of the novel coronavirus disease 2019 (COVID-19), payroll professionals must be prepared for questions from company executives, managers, and employees. The actions companies are taking in response to COVID-19, whether to reduce working hours, allow more employees to work from home (telecommuting), or shut down indefinitely, are raising difficult compliance questions for payroll. The content will be continuously updated to ensure subscribers have the most up-to-date information to perform their jobs at the highest level possible.

Scott Wilson, CAE, PMP, is Director of Strategic Initiatives for the Global Payroll Management Institute and American Payroll Association

The Inland Revenue Authority of Singapore (IRAS) is providing tax guidance to employers and taxpayers that may be affected by COVID-19. Employees working remotely from Singapore due to COVID-19 will not be considered to be working in Singapore and their employment income will not be taxed in Singapore as long as certain conditions are met.

Two Types of Remote Employees
The tax guidance applies to two types of remote employees:

1. Singaporeans and Singapore permanent residents who work overseas and are now working remotely in Singapore for that job due to COVID-19.
2. Nonresident foreigners who work overseas and are on a short-term business assignment in Singapore and unable to leave due to COVID-19.

Employment Income Not Taxable in Singapore
Singaporeans and Singapore permanent residents will not be considered to be working in Singapore for the period from the date of their return to 30 September 2020 provided:

1. There is no change in the contractual terms governing their employment overseas before and after their return to Singapore.
2. This is a temporary work arrangement due to COVID-19.

If these conditions are met, their employment income for the period of their stay in Singapore up to 30 September 2020 will not be taxable in Singapore.

Nonresident foreigners will not be considered to be working in Singapore for the period of their extended stay provided:

1. The period of their extended stay is for no more than 60 days.
2. The work they have done during their extended stay is not connected to their business assignment in Singapore and would have been performed overseas if not for COVID-19.

If these conditions are met, their employment income for the period of their extended stay in Singapore will not be taxable in Singapore.

Note: If the above conditions are not met for either type of remote worker, then normal tax rules will apply to determine the taxability of their employment income.

Laura Lough, Esq., is Director of Publications for the American Payroll Association

 

The U.S. Internal Revenue Service (IRS) updated several procedures relating to Internal Revenue Code (IRC) §911 for the foreign earned income exclusion requirements and residency and presence tests for 2019 and 2020.

Background
IRC §911 allows a "qualified individual" to exclude foreign earned income from gross income up to a certain amount ($105,900 in 2019; $107,600 in 2020). An employer need not withhold federal income tax from any wages paid to a qualifying employee it reasonably believes will be excluded under IRC §911. A qualifying individual is an individual who is a U.S. citizen and a bona fide resident of or present in a foreign country for a specified portion of the taxable year.

IRC §911(d)(4) provides an exception to the residency and presence eligibility requirements if an otherwise qualified individual leaves a listed foreign country because of war, civil unrest, or similar adverse conditions that preclude the normal conduct of business, on or after a certain date, pursuant to a determination by the U.S. Secretary of the Treasury (in consultation with the Secretary of State). In such a case, the income exclusion will apply even though the individual was not in the foreign country for the statutorily prescribed period, if the individual can show that but for the adverse conditions he or she had a reasonable expectation of meeting the requirements of IRC §911.

Countries With a Waiver for 2019
The IRS released a supplemented list of countries for which some of the foreign earned income exclusion requirements of IRC §911 are waived for 2019 (with departure dates) [Rev. Proc. 2020-14; 2020-16 IRB 661]. The list contains the Democratic Republic of the Congo (with a departure date of January 13, 2019); Haiti (with a departure date of February 14, 2019); Iraq (with a departure date of May 14, 2019); Sudan (with a departure date of April 11, 2019); and Venezuela (with a departure date of January 24, 2019).

Residency and Presence Test Waivers
In response to COVID-19, the IRS also is waiving the residency and presence tests for certain U.S. individuals who were in China, excluding Hong Kong and Macau, as of December 1, 2019, or were otherwise outside of the United States as of February 1, 2020 [Rev. Proc. 2020-27, 4-21-20]. The covered period ends on July 15, 2020, unless the IRS announces an extension.

To qualify for relief under IRC §911(d)(4), an individual must have established residency, or have been physically present, in the foreign country on or before the dates specified above. Individuals who were first physically present or established residency in China after December 1, 2019, or another foreign country after February 1, 2020, would not be eligible for the waiver. Individuals seeking to qualify for the IRC §911 foreign earned income exclusion because "they could reasonably have been expected to have been present in a foreign country for 330 days but for the COVID-19 Emergency" and have met the other four requirements may use any 12-month period to meet the qualified individual requirement.

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association

Sharon Tayfield, Director of Global Payroll Operations in the London branch of BDO LLP (UK), has been named the Global Payroll Management Institute's inaugural Global Payroll Titan award winner. The award program was held in conjunction with Global Payroll Week, 27 April - 1 May, and recognizes a professional who demonstrates measurable positive effects for their organization, a commitment to the global payroll industry, and an innovative approach to global payroll issues.

Tayfield has more than 25 years of experience in the global payroll industry and extensive technical knowledge and experience with global compliance and legislation. She earned the Payroll Technician Certificate in 2014, offered by the Certified Institute of Payroll Professionals, and she is a frequent contributor to GPMI's Global Payroll e-magazine.

Tayfield was selected as the recipient out of a field of more than 60 nominees from all over the world who all work in the global payroll industry. She received complimentary virtual education from GPMI, a citation, and digital badge for her LinkedIn profile.

The Global Payroll Management Institute launched its inaugural Global Payroll Titan award program on 13 February as part of its Global Payroll Week 2020 celebration. The award program celebrates, empowers, and recognizes the outstanding professionals responsible for processing multi-country payrolls.

Cynthia Crise is the Public Relations and Social Media Coordinator for the American Payroll Association (APA) and the Global Payroll Management Institute (GPMI).

In December, the Council of Representatives of the National Minimum Wages Commission (Conasami) announced an increase in the general and professional minimum wages in Mexico [Bulletin No. 022/2019, 12-23-19].

As of 1 January 2020, the general minimum wage (SMG) increases to 123.22 Mexican pesos per day of work throughout the country, with the exception of the North Border Free Zone (ZLFN). The amount was calculated by adding 14.67 pesos, figured through the Independent Recovery Amount (MIR), and includes an inflation factor of 5%. In the ZLFN, the minimum wage increases to 185.56 pesos per day, which is also a 5% increase.

In the case of minimum professional salaries for the rest of the country, the MIR of 14.67 pesos and the 5% inflation factor should be applied.

Andrés Peñaloza Méndez, President of Conasami, said that there has been a significant step in the recovery of the purchasing power of the most unprotected workers. Méndez also said the revision of the table of professional minimum wages will continue to be updated, and he emphasized correcting the cases for domestic workers and agricultural laborers.

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association

As of 1 January 2020, the Dutch Balanced Labor Market Act (Wet arbeidsmarkt in balans, WAB) provides a 5% reduction in the unemployment insurance (UI) contribution premium (WW-premie) rate for employers with employees under permanent contracts (i.e., indefinite term contracts). Employers can pay a UI contribution rate of 2.94% for employees with permanent (indefinite term) contracts rather than the rate of 7.94% that applies for employees with fixed term contracts. There is no longer a premium rate based on sector.

Permanent Versus Temporary Contracts
In the Netherlands, a fixed term contract is a temporary contract because it provides a definite end date. An indefinite term contract is a permanent contract because it applies for an indefinite period of time until the employer or the employee terminates it. Dutch law provides more protection to employees under an indefinite term contract. The reduced UI premium rate is meant to encourage and reward employers that provide more job security to employees.

Employer Qualifications
An employer can qualify to pay the lower UI premium rate of 2.94% if any of the following conditions apply:

• The employee has an employment contract for an indefinite period that was agreed to before 1 January 2020.
• The employee is younger than age 21 and has been paid a maximum of 48 hours (per reporting period of four weeks) or 52 hours (per reporting period of a calendar month).
• The employee is a student who follows the Beroeps Begeleidende Leerweg (BBL), the agreement has a date, and the employer has a copy in its records.
• The employer pays an employee insurance benefit (WW, SW, WIA, WAO, WAZO) as an employer payment or as a deductible.

Written Employment Contract by 1 April 2020
The Ministry of Social Affairs and Employment has announced that – so long as the employee was already employed for an indefinite period before 1 January 2020 – employers have until 1 April 2020 to draw up a written employment contract or addendum, get it signed by both parties, and keep a copy in its payroll records.

Mavanee Anderson, Esq., is Editor of Payroll Information Resources for the American Payroll Association

As part of President Emmanuel Macron’s push to modernize France’s economy, the country is reforming its unemployment insurance (UI) system. The changes are meant to incentivize employers to hire employees for longer fixed-term contracts (Contrats à Durée Déterminée (CDDs)) and to more permanent positions (Contrats à Durée Indéterminée (CDIs)). The first changes – which relate to former employees – went into effect on 1 November 2019 and relate to the qualifications for receiving UI payments.

The new UI system, similar to the UI experience rating system in the United States, will be based on the insurance principle that premiums (contribution rates) should be based on the risk involved (unemployment benefits charged to the employer). It has been referred to as a reward-penalty (i.e., bonus-malus) system.

Affected Employers and Business Sectors
Effective 1 January 2021 – but based partly on current performance – the changes will affect employers with at least 11 employees, in seven business sectors normally associated with high numbers of short-term contracts and temporary workers. Employers in other business sectors will continue to pay the current contribution rate, which is 4.05% for most employers. After a period of evaluation, the government plans to apply the new system to all employers.

The seven business sectors are:

1. Food, beverage, and tobacco product manufacturing
2. Rubber, plastic, and other non-metallic product manufacturing
3. Accommodation and catering
4. Production and distribution of water and sanitation, waste management, and depollution
5. Transport and storage
6. Woodworking, printing, and the paper industry
7. Other specialized, scientific, and technical activities

Employer Contribution Rates
Beginning 1 January 2021, employer contribution rates will vary from 3% to 5.05% of payroll based on the employer’s performance during a reference period (i.e., lookback period). Employer contribution rates will continue to be 4.05% for employers that are not within the affected business sectors.

For employers within the affected sectors, an employer’s separation rate will be the ratio between the annual number of contract terminations and subsequent UI benefit claims compared with the employer’s total number of employees. The employer’s separation rate will be compared with the median separation rate in the employer’s business sector according to the following formula:

Employer’s contribution rate = "Employer's separation rate" /"Median sector separation rate" x 1.46% + 2.59%

This means that if the separation rate of an employer is equal to the median rate of its business sector, then its contribution rate will be equal to 1 × 1.46% + 2.59% = 4.05%. The rate cannot be less than 3% nor greater than 5.05%.

For contributions due in 2021, there will be a two-year lookback period: from 1 January 2019 through 31 December 2020. For contributions due in 2022, there will be a three-year lookback period: from 1 January 2019 through 31 December 2021. For contributions due in subsequent years, there will be a three-year lookback period.

Flat-Rate Tax for CDDs
Beginning 1 January 2020, as an additional discouragement of the excessive use of short-term contracts, a flat-rate tax of 10 euros will be charged for each CDD (excluding intermittent worker contracts in the entertainment industry).

Additional Resources
Check the Unédic website for additional resources and future updates.

Mavanee Anderson, Esq., is Editor of Payroll Information Resources for the American Payroll Association.

Employers in Victoria with a wage bill exceeding the tax-free annual threshold of $650,000, which equals a monthly threshold of $54,166, are required to pay a payroll tax of 4.85% of wages. According to the 2019-20 Victorian budget, the annual threshold will increase to $700,000 by 2022-23.

Even after the increase, Victoria’s annual payroll tax-free threshold is less than the annual thresholds in the other states, which are: Northern Territory ($1.5 million), New South Wales ($900,000), Queensland ($1.3 million), South Australia ($1.5 million), and Western Australia ($850,000).

Regional Victorian employers
A lower payroll tax rate applies to taxable wages paid by regional employers to their regional employees. For 2018-19 and 2019-20, the payroll tax rate for regional Victorian employers is 2.425%.

Over the next three years, the regional payroll tax rate will be reduced to:

• 2.02%, effective 1 July 2020
• 1.62%, effective 1 July 2021
• 1.2125%, effective 1 July 2022

As of 1 July 2019, a business is a regional employer if it pays at least 85% of its Victorian taxable wages to regional employees (those employees who perform more than 50% of their services within the region of Victoria during the month).

To qualify as a regional employer, the business also must pay: at least 85% of monthly Victorian taxable wages to regional employees for the purposes of the employer’s monthly returns, and at least 85% of the employer’s Victorian taxable wages to regional employees during a financial year for the purposes of the employer’s annual return.

Note: It is not necessary for an employer to meet the monthly rate reduction threshold every month during a financial year in order for it to meet the annual rate reduction threshold.

An employer registered to lodge and pay on a monthly basis must submit wage details every month, even if it does not have a payroll tax liability. Employers self-assess liability on a monthly basis and pay by the seventh day of the following month (or the next business day if it falls on a weekend or holiday).

All employers must lodge an annual reconciliation by 21 July each year.

The Victorian State Revenue Office provides additional resources in the payroll tax section of its website.

Mavanee Anderson, Esq., is Editor of Payroll Information Resources for the American Payroll Association.

The New Zealand Commissioner of Inland Revenue has issued a pair of binding rulings (BR) under Section 91D of the Tax Administration Act of 1994 stating that the payment of remuneration to an employee in crypto-assets (e.g., Bitcoin) will be treated as part of the employee's salary or wages and is therefore subject to Pay as You Earn (PAYE) withholding.

BR Pub 19/01 provides that the payment of remuneration to an employee in crypto-assets as part of the employee's regular remuneration will be treated as part of the employee's salary or wages and is subject to PAYE. In BR Pub 19/02, the Commissioner ruled that the payment of incentives or bonuses in crypto-assets to an employee arising from employment is also subject to PAYE.

The rulings apply only where the crypto-assets being paid: are not subject to a “lock-up” period; can be converted directly into a fiat currency (on an exchange); and either a significant purpose of the crypto-asset is to function like a currency or the value of the crypto-asset is pegged to one or more fiat currencies. Commentary to the rulings explains that a Fringe Benefits Tax (FBT) applies where it is determined that the payment is not assessable income subject to PAYE withholding. Payments of crypto-assets not subject to PAYE are fringe benefits subject to FBT.

BR Pubs 19/01 and 19/02 appear in the Inland Revenue Department’s Tax Information Bulletin for August (Issue 7, Vol. 31, August 2019).

Edward Kowalski, Esq., is Manager of Payroll Information Resources for the American Payroll Association.