The only deduction from your retiring allowance is Canadian Income Tax, unless you have an outstanding amount owing to the university (e.g., overpayments of salary) or garnishments. No Canada Pension Plan or Employment Insurance is payable, and the payment is not subject to pension or benefits contributions. If you are unionized, USW and CUPE 254 have agreed to waive union dues deductions.
In Ontario, the income tax that will be withheld will depend on the amount of your gross VEI payment as follows:
- 10% on amounts up to and including $5,000
- 20% on amounts over $5,000 up to and including $15,000
- 30% on amounts over $15,000
For example, if you started work at Queen鈥檚 on March 1, 2019, and your current salary is $62,400, your VEI payment would be:
- Five (5) years completed service, times four (4) weeks per year, equals 20 weeks鈥 pay at your regular salary
- 20 weeks鈥 pay times $1,200 per week
- Equals $24,000, less 30 percent withholding for income taxes,
- Totaling $16,800, less any additional deductions (see above).
Please also note that if your total income (including the VEI incentive payment and any additional income like salary, pension, or vacation pay) received for any one tax year will be significantly different from your usual annual income, there may be a significant difference in the amount of income tax you will be required to pay for that year. You may wish to speak with a financial advisor to discuss and plan for this possibility.
